To be successful, a business needs many things, but there is one essential which can be tricky for you to get hold of: customers.

Almost every other element needed to run a business is under your control. You choose the products, the prices and the infrastructure needed to deliver. You raise the working capital, either from private sources or corporate lenders.

But getting customers is harder. You need to persuade people to walk into your premises and make a purchase, or visit your website and press that button which says ‘buy now’. Here are some suggestions to help get people through the real, or virtual, door.

1. Know who your customers are.

Many start-ups make the mistake of aiming their marketing at everyone. They’re so worried that they’ll miss an opportunity that they try to target every possible purchaser at the same time. The truth is that some people, or businesses, will be much more likely to buy your product than others. It will pay to invest time in working out exactly who they are.

2. Use the right marketing channels

You have never had so many ways in which to reach potential customers. Traditional advertising, online advertising and social media all offer lots of options. Once you’ve identified your target market, you can work out which methods of advertising are most likely to reach them.

3. Learn all you can from every customer

Every person who buys from you can be a rich source of information. Don’t be afraid to find out all you can about how they heard of your business, why they chose to buy from you, how they found the experience and whether they’re willing to recommend you to others. All that information can help you better understand what’s working and what isn’t, and how to focus your marketing more effectively.

4. Turn a one-time customer into repeat business

You make more profit selling to existing customers, because the overall cost of sale is much less. So you need to find ways of bringing customers back for more. This could be a loyalty card, sending them regular emails, offering a purchasing experience that they enjoy, or a combination of all of these.

5. Never take your customers for granted

Their business is being sought by your competitors, so never assume that they’ll keep coming back to you. You’ll need to work hard to retain their loyalty.

If you want to grow your business contacts, be stimulated by fresh ideas and discover opportunities you had not previously considered, business networking could be what you need.

Networking events are often viewed with suspicion by those unfamiliar with them. It’s easy to assume these gatherings are packed with people trying to sell to one another over a meal or drinks.

While it’s true that some of those attending networking meetings are solely looking for business, the majority take a much broader approach. They want to meet people for a variety of reasons, including:

• To find potential business partners
• To meet experts on subjects that will be useful to them
• To make informal contact with others in the same or similar businesses
• To discover new ideas or opportunities

Here are our tips on how you can get more benefit from business networking.

1. Have a clear purpose

As with everything you do in business, it’s important to know why you are doing it. When it comes to networking, the purpose of going to your first meetings could be as simple as ‘to see what it’s like’.

Some networkers set themselves clear targets such as to talk to three new people or to give away a certain number of business cards.

Others are looking to make contact with people who have specific knowledge, such as a tax specialist or someone who understands a particular commercial process. While it’s possible to track experts down through the internet, some prefer a more personal approach.

2. Focus on two or three networks

When you look into the networks operating in your area you could quickly be overwhelmed by the number available. The most effective way to use them is to focus on a small number, learning how they work and what they offer. Over time, you could then choose to move on to others.

Decide what type of networks interest you. Some are very local; others are specifically for women in business. There are networks which meet weekly, monthly or more occasionally. Some have very structured meetings while others are very informal.

3. Develop a succinct description of what you offer

While those you meet at networking events will not want to be sold to, they will ask what you do. This is an opportunity to present your business, and the most effective way to do this is in terms of what it offers to customers.

It pays to plan ahead for answering questions about your business, particularly if it can be complicated to explain, or if it’s particularly common.

A good description will prompt the listener to ask more questions. If you describe yourself as an accountant or the owner of a printing firm, the listener will assume that they know what you do. But say something like ‘I help firms to pay less tax’ or ‘my firm helps others to get noticed’ and you’ll probably be asked for an explanation.

4. Be prepared to speak at events

Many networking meetings involve a short presentation from one of their members. It could be anything from two or three minutes to half an hour or so.

While these are not usually the right place to make a sales pitch, they give the speaker an opportunity to demonstrate their expertise in a specific area. A graphic designer might give tips on how to make a flyer more visually attractive, while a recruiter could give advice on interview technique.

Taking the opportunity to speak at events will raise the profile of both you and your business.

5. Measure the return on your investment

It’s important to understand the value that you get from networking. This could be as simple as having contact with other business owners, or as specific as measuring the level of income that your networking brings in.

How you choose to measure the return in investment is a personal choice. But it’s important to do it, because you are putting in time and probably some money. You want to be sure that your business networking is as effective as possible.

Yet another household name has run into serious cash flow problems. But going into administration does not mean that Scotland’s most successful football team are out of the game.

Rangers FC, who have won more league championships than any other team in the world, were forced into insolvency action this month by HMRC. The tax man claims to be owed around £9 million in PAYE and VAT, and wants to get at least some of that money in as soon as possible.

Being in administration means the club has no choice but to restructure its financial affairs. The administrators, from financial firm Duff and Phelps, are legally obliged to seek the best outcome for creditors, while at the same time doing what they can to save the business.

Going into administration does not have to be the end

The immediate effect of administration is that management of the business is taken away from the directors and put into the hands of insolvency specialists.

They perform a swift assessment of the situation and within days, changes start happening. Unfortunately, these often include job losses in a bid to recover the cash flow situation. Salaries are a major cost to almost every firm, making them the obvious place to make quick savings.

The administrators will also be talking to potential buyers and funders. A household name, such as Rangers, carries huge value. In the case of a football club, it also has a loyal following of fans. The administrators will want to realise this value in cash, probably by selling the business.

While the worst case outcome of an administration is liquidation of the company and complete cessation of trading, this rarely happens to the largest brands.

Businesses of all sizes can survive administration

When considering the outcome of administration, or any other insolvency process, it’s important to remember that a business can be separated from the legal entity which runs it.

Many businesses are run either as a private or public limited company. The resolution of an administration is often the sale of some or all of the business operations, raising funds which the company can use to pay debts before being wound up.

The outcome of the process is that the business continues to trade under new ownership. That’s what the many fans and employees of Rangers FC will be hoping for in their situation. If and when new financial management is in place, they’ll be looking forward to maintaining their place as one of the world’s top football teams.

Image By Matthew Wilkinson

One in three new firms is funded from the owner’s own pocket. That’s a finding from a recent survey by the Federation of Small Businesses (FSB).

These figures were announced on the same day the Bank of England revealed that bank lending to firms fell during 2011. The UK’s five leading banks have failed to meet their lending target to SMEs, set as part of Project Merlin, a deal with the government to ensure that credit was extended to businesses.

Instead of borrowing money from banks to get going, one third of start-ups has obtained their initial working capital from the owner’s savings, which could include an inheritance or a redundancy payment.

Firms not asking for credit

It’s becoming clear that many businesses, both established and start-ups, are simply not asking banks for money. The big lenders in Project Merlin – Barclays, HSBC, Lloyds, Santander and RBS – all say they are making it easier for firms to apply for cash. But borrowers are not coming forward.

The FSB figures seem to confirm that many business owners are using their own funds rather than bank lending. This suggests an unwillingness by owners to expose themselves to the risks of taking credit from banks. This reluctance could be fuelled by the high level of business failures over the last few years.

By using their own savings as working capital, business owners are not putting themselves in the hands of lenders who could become nervous and withdraw their facilities. Or they could simply be saving themselves the time spent on what they think are likely to be fruitless applications.

Commercial finance alternatives for those without capital

Despite this high level of reliance on personal savings, not every business owner has large reserves of cash in the bank. If they do have savings, they may well be earmarked for other, personal, uses.

The good news for existing and potential business owners is that there are alternatives to borrowing from the major banks, and these alternatives also avoid taking on extra debt.

Asset-based borrowing, such as invoice factoring or discounting, gives both start-ups and long-established firms a cash flow boost by eliminating the long wait for customers to pay their bills.

With debtors often taking between two and three months to settle, a sales ledger can hold up to one quarter of a year’s turnover. Released early through invoice finance, this money can provide a huge injection of working capital.

To find out how much cash your business could unlock from its sales ledger, give the Touch Financial experts a call right now on 0845 388 9725.