Creative England teamed up with Barclays to offer creative companies top tips on how to drive their business.
The Creative sector has been growing fast for some time and the latest government figures* which were published in January looked at the creative industry’s performance up until 2013. It revealed growth increased by 10% that year– higher than any industry in the UK.
The outlook for this to continue in 2015 is promising, presenting real growth opportunities for businesses in this sector. Knowing how to take advantage of the economic environment is key and we’ve pulled together some top tips to help businesses on their growth journey.
Knowledge is Power
Making sure your business idea is viable is a good first step for any aspiring business owner, and research helps to determine if your idea is likely to be profitable. Find out as much as possible about who your target customer is. For example, understanding their age demographics, what their lifestyles are like and what they are looking for from your products or services, as well as the market you are competing in and why they would buy from you.
Ask yourself - has anyone else already developed your business idea? Creating a business strategy establishes ‘where you are now, where you want to get to and how you will get there’ and this should help you to identify any gaps in your model and assumptions.
Turning ideas into a business plan
A business plan will help collate and clarify business ideas, plan for the future and help to show whether key ideas are realistic and workable. It will also play a central role in attracting that initial funding, which is crucial in getting your business started. Business plans are dynamic documents - meaning they should be revisited and adjusted as the business develops.
Importantly, when a business is in trouble, having a solid plan can help to steer it back to good health. Be aware of start-up costs and make sure you don't underestimate initial overheads. A financial plan should contain your budgets and sales forecasts, as well as your personal financial plan.
Making savings a priority and having a cash reserve before you start can help to prepare for when the unexpected happens. Finally, be realistic – setting achievable deadlines and targets will keep your business on track for growth.
Finding the right finance for your business
Once your business strategy is in place, access to funding is the next big step for start-ups. When looking for finance from banks or investors you will need to show that all bases have been covered and that a sound business sense prevails. By ensuring this, your business strategy will need to be viable, with the lender being able to see a clear line to profit.
Lending, be it a business loan, overdraft or commercial mortgage, could help those wanting to take advantage of the improving economy, or could be needed when the unforeseen happens to keep your business going. There is a range of bank support available in addition to a rise in alternative providers that may be suitable for you.
Grants are usually one-off payments made by the government, European Union, local authority, business support organisation and charities such as the Prince's Trust. Businesses with short-term or seasonal borrowing requirements may choose a business overdraft, while a business loan can be repaid over a certain period of time.
This can be an option for businesses needing a cash injection, for example, for new equipment or a company vehicle. A commercial mortgage could be for the purchase of new business premises or release equity from an existing one, and the repayment period can be anything from one to 25 years.
Finance for future growth
Many existing businesses may not have thought about how borrowing can help their business to grow further on in their journey. The key for any business at each stage of growth is to have the right funding mix, or range of lending tools to enable that growth to continue.
Referring back to your business plan and demonstrating you can afford repayment will help your future funding applications. Keeping a close eye on your outgoings and monitoring your cash flow at regular intervals will help in the long term to cover any unexpected costs. Staying on top of your bookkeeping will also help you to stick to your budget.
Boosting your market overseas
While exporting isn't for everyone, businesses identify overseas markets as a factor that can significantly boost growth. We know from a recent study the premium ‘Brand Britain’ has in attracting overseas customers. SMEs are now exporting earlier than ever before, with those that do export attributing a quarter of their growth to overseas trade opportunities.
With the UK being a saturated market, it could be that the biggest growth opportunity for many businesses may be outside the UK. There are a wide range of financial products and services to support businesses with international payments for importing and exporting.
Get researching, find our more information from UK Trade & Investment (UKTI), or speak to your bank or business manager to find out how you can take your business to a new audience overseas. Businesses can register for free Barclays Fired Up for Growth Clinics which aim to help businesses unleash their growth potential.
*Department for Culture, Media & Sport: Creative Industries now worth £8.8million an hour to UK economy, January 2015
By Adam Rowse. Head of Business Banking at Barclays