How do you take that next big step to increase turnover, boost profits and perhaps even become more than a one-man or one-woman band? Resident Natwest expert Marcelino Castrillo explores five different but proven growth strategies for sole traders.
For many people, working for yourself or running your own business is the dream. It’s no surprise that there were 3.3 million registered British sole traders in 2015, representing 62 per cent of all privately-owned businesses. However, when you want to take that next step towards growth without necessarily losing your sole trader status, what strategies can you explore?
(1) Take on an apprentice
It might come as a surprise, but you can legally still be a sole trader and take on an apprentice. To do this you would instruct an apprentice through an Apprenticeship Training Agency (ATA), which acts as their direct employer. Working with an apprentice gives you the opportunity to expand horizons, take on more work or clients and slowly begin to grow your business, as well as allowing you to pass on your skills and knowledge to someone else, boosting their future growth potential.
National Apprenticeship Week 2016 takes place between 14 and 18 March and organisers say that businesses report an average increase in productivity, earning them £214 extra a week, when they hire an apprentice. “Our apprenticeship reforms are helping to build the modern highly skilled workforce British businesses need,” commented skills minister Nick Boles in October 2015. “We are committed to delivering three million apprenticeships by 2020 because that means more opportunities for our young people, more growth for our businesses.”
(2) Leverage social media
Navigating your way through the social media maze can be difficult for the biggest companies, let alone sole traders, but that doesn’t mean you should ignore it. Having a free presence on Facebook and Twitter can connect you with new customers and allow existing ones to leave recommendations and comments on your work to boost reputation.
Twitter claims that 60 per cent of people have made a purchase based on something they saw on the platform, while Facebook advert campaigns can be targeted specifically at your local area. “My number one piece of growth advice is make the mental change from ‘doer’ of your thing to ‘marketer’ of your thing,” said Nigel Botterill, founder of entrepreneurscircle.org. “Spend time working on, instead of just working in, your business.
“A very small amount of people put time aside to do this. Take an hour or so in the morning, to write ads, sales emails, referral schemes, offers and website updates to name a few, as well as scheduling social media posts,” he added.
(3) Collaborate with other sole traders and freelancers
Just because you’re a sole trader, it doesn’t mean you need to fly solo. With so many other businesses out there just like yours, the quickest way to growth can be through a simple and informal tie-up or collaboration. For example, if you’re a plumber fitting out a new bathroom, working alongside a carpenter who you can recommend to do other jobs around a client’s house can gain you more lucrative and profitable contracts.
CitySprint CEO Patrick Gallagher is a big believer in collaboration. “The benefits of collaboration are clear,” he said.
“CitySprint research found that 86 per cent of small firms that partnered with others during the economic downturn claimed to be in better financial shape now, and owners are less concerned about the future of their business With so many challenges ahead, pooling resources and talent is the best bet to achieve ambitious growth plans,” he added.
(4) Be bold, take chances and know your customer
Albion founder and CEO Jason Goodman has worked with some of Europe’s most exciting fast-growth companies including Skype, Betfair, Innocent and Zoopla. He said that whatever business you are in, at whatever level, the basic rules should apply as a foundation to growth. “It may sound stupidly obvious but you have to keep listening to your customers,” he explained. “Constantly interact with them and adapt your business where necessary.
“Key sales and marketing data can give you another way of staying on top of what customers want and how they will react to changes your business plans to implement. Customers should always be the determining factor when planning growth.
“And be bold,” he went on to say. “The finest entrepreneurs I’ve had the pleasure of working with are unquestionably bold from the very first day. They set themselves reference points for what is the ‘best of breed’ brand they want to beat. The lesson is to never settle for second best.”
(5) Don’t overlook the power of your existing clients
When your business is gunning for growth, it can be easy to forget about the people who helped generate its current success in favour of chasing down new business. CEO and founder of fast-growing Crunch Accounting Darren Fell explained why this is not always a great idea.
“About a year after Crunch Accounting launched we were looking at how new clients first heard of the company and we realised a disproportionately large number of were coming through referrals from existing clients,” he said. “It showed clients really valued and liked our service – and it was also a marketing channel we didn’t have to pay for!
“We introduced a referral scheme which rewarded clients with Amazon vouchers to say thank you. This consequently increased our referrals and we’ve been tweaking it ever since. In any given month up to half of our new clients come from referrals, so it’s still a huge source of growth,” added Fell.
Quick growth doesn’t mean that a sole trader needs to shed individuality, but by turning to the extra help that’s out there and being bold about the sort of business you want to run, you can keep your identity and boost your business.
And now for something different. Find out how London mayoral candidate Zac Goldsmith is planning to deliver for the capital’s small businesses.
Sign up to our newsletter to get the latest from Business Advice.