How to grow

This seasoned entrepreneur and investor knows a thing or two about the trials and tribulations of starting a business. But once you've got your baby out of nappies, there follow the tricky teenage years. Want to know how to expand successfully? Read on ...

by Luke Johnson
Last Updated: 23 Feb 2015

Go international

For companies that sell only in Britain, an obvious route to expansion is foreign markets. You can do this via exporting, joint-ventures, franchising or starting overseas subsidiaries. Tapping into high-growth economies like Brazil, Russia, India and China is a great way to offset flat prospects at home. Note how Paul Smith has fed the desire in emerging markets for luxury clothing.

Hire superstars

Recruit the best talent - especially a team - and you are more likely to win new business. They may be in sales, engineering or service. The closer to the front line such troops are, the more likely they are to bring victory. Hiring strong administrators is a sound idea, but they are more likely to have an impact on costs than the top line.


No one will buy your products unless they know about them. So become a master of marketing: understand the power of advertising, PR and social media. That means digital techniques such as search engine optimisation. The power of a brilliant campaign to get a brand noticed is undoubted. TV ads turned Moonpig into a leading player in greetings cards.


It can be quicker and cheaper to buy a company than to grow organically. The mergers most likely to succeed have sound corporate logic and a strategic rationale - more products delivered down the same distribution channels, for example, or better use of production facilities. But culture matters: avoid acquisitions where the partners have conflicting views on how business should be done. WPP, the world's biggest advertising network, created an empire through dozens of acquisitions over many years.


Research shows that firms which invent new ranges and make novel products are the most likely to do well. Consumers want something different and if your firm is able to constantly launch distinctive goods that provide original features, the public will buy them. James Dyson built a British winner by making vacuum cleaners, hand dryers and fans unlike any others. The designer focused on research to develop new technology that gives his home appliances an edge.


Motivated staff can make the difference between losing and winning an order. Devising the right performance-related packages for your staff is an important skill. It's partly a question of financial rewards, including share options in some cases; but it's also about making a workplace enjoyable, providing direction, leadership and giving credit when it's due. Virgin has been clever at attracting and keeping excellent people and maintaining strong morale.

Give great service

Most companies rely on repeat business to survive, but often management concentrates on price and not on making sure the customer has a seamless experience. Whether restaurant chain, airline or manufacturer, treating customers well can make them into loyal fans, and such advocates are a common feature of world-beating organisations. Remarkable service standards at Four Seasons hotels enable them to maintain higher occupancy and prices than most lodging chains.

- Luke Johnson is the author of Start It Up: Why running your business is easier than you think (Penguin Portfolio, £12.99).

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