Spotting market opportunities

You do not need a large corporate-sized advertising and marketing budget to be able to compete for and win business. Keeping an eye on the market and looking out for relevant opportunities can help you grow and increase profit.

You must be clear about what you want to achieve with your business. You also need to be able to differentiate your business from your competitors.

Research your marketplace, understand your product or service and know why people would want to buy from you.

This guide outlines what you can do to find and create new business opportunities – and how you can compete successfully for them.

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How to identify new business opportunities

Spotting market opportunities is essential for growth and survival. You need to know where to find these opportunities and understand how to take advantage of them.

There are a number of ways of working out what are the best opportunities for your business, including:

• carrying out an analysis of the strengths and weaknesses of your business, and the opportunities and threats it faces (a SWOT analysis)
• establishing your unique selling point (USP)

SWOT analysis

A SWOT analysis is an analysis of the strengths and weaknesses of your business, the opportunities and threats it faces and how these factors influence your business.You can find out how to conduct a SWOT analysis on the businessballs website- Opens in a new window.

Using the results of your SWOT analysis, list how you can exploit the opportunities you have identified.

Threats do not necessarily have to be a negative for your business. Consider what opportunities you would have if the threat didn’t exist or didn’t happen and use this information to help you plan for growth.

When considering threats to your business, identify those trends that currently affect your business and those that could affect it over the next 12 months or so. You need to expect and plan for change.

As these trends will create both opportunities and threats, you will need to think about how you will prepare your business to adapt to these changes. Ways you might do this include introducing new products, altering prices, changing your marketing methods or adding value to the customer experience.

Establish your USP

Set yourself apart from your competitors by establishing your USP. Position yourself as being different to your competitors. Identify why customers should buy from you and promote this.

You can read more about USPs in our guide: know your customers’ needs.

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Growing your business

Growth has its risks, but provided you plan carefully and have the right strategy, it can deliver stability, security and long-term profits.

Once you have assessed the current strengths, weaknesses, opportunities and threats to your business and how well it’s equipped to handle them, you can move on to building a strategy for growth – see our guide on how to assess your options for growth.

Whichever growth option you choose:

• stay focused to be effective – don’t spread yourself too thinly
• be selective and objective so that you can make the most of opportunities
• carefully consider the full impact of exploiting market opportunities and be realistic when assessing your past performance
• take your time with the new opportunities you decide to pursue – allow enough time for them to develop

Grow your business organically

The first step towards growing your business organically is to look for ways of generating new business with your existing customers.

Before you start working on any ideas, identify your unique selling point – the element or elements of your product or service that make it stand out from the competition. Use it to underpin your sales strategy making it clear to customers why they should buy from you.

Retain existing customers

Use what you know about existing customers to retain their business. Understanding the people you sell to and what motivates them to buy is key to exploiting new opportunities and generating repeat business.

Encourage customer feedback to help you identify what made them choose you over your competitor. This information could help you to keep existing customers for longer and to win back lapsed customers.

Ask customers if there is anything they need that you don’t currently offer. Use this information to develop your services or product range.

Consider up-selling and cross-selling to customers, by:

• selling additional products or services to existing customers
• pitching relevant goods or services to your customers
• telling customers about upgraded versions or complementary products, if they are initially only interested in one product

Get a deeper understanding of your customers and their needs by conducting formal market research with a selection of consumers. See our guide on market research and market reports.

Expand your customer base

Think about how you acquired your existing customers and use this knowledge to generate new business.

You can also use your existing customer data to identify who you are currently supplying to and what customer type or category they fall into. Use this list to then identify who you aren’t currently selling to but who are likely to benefit from your services. You now have a list of potential opportunities.

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How to exploit new business opportunities

Once you have identified new business opportunities, narrow the list down to those customers that you think are potentially the most lucrative. Using a more targeted approach will prevent you spreading your marketing budget and time too thinly.

Any opportunities you identify need to be managed. Carefully examine the action you plan to take – you need to make sure the opportunities fit in with your business objectives.

Be careful that you don’t develop the business beyond your means – make sure that your capabilities match the opportunity. There is no point securing too much new business if you can’t then successfully deliver your promises.

Take advantage of new opportunities

Monitor your competitors. Identify areas they don’t operate in and find out who they sell to – these are potential customers for your business as well.

Examine their product range or the services they offer, check out their marketing and investigate their pricing. A competitor’s poor performance could create an opportunity for your product or service.

Look for events or changes that could trigger a need for a new type of product or service, for example:

• new legislation can create opportunities for business consultants or advisers
• two organisations may be merging – providing a great deal of opportunity for all types of services and trades

Look beyond your current market. Looking further than your sector or established market can open up business opportunities. By looking to other sectors, businesses and countries for inspiration and ideas you can combine existing ideas to produce a more effective product or service and take a fresh approach to meeting an identified need.

Consider working in partnership with other businesses that offer complementary services to yours and which are aimed at similar customer groups. The number of potential opportunities could be increased in this way by:

• the partner business selling your products or services to customers who don’t currently buy from you
• you selling your partners’ products or services
• jointly developing new products or services based on a combination of your business and theirs

You will have to agree fixed fees or commission rates with the other business if you are selling each other’s products or services.

A further benefit of working in partnership is that marketing and promotional costs are shared (equally or proportionately). Pooling your resources can also increase your bargaining power, enabling you to negotiate better deals with suppliers.

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How to compete to win business

To get new business you need to identify the best way to present yourself to potential customers.

Take action

• Learn about your target customers.
• Look for market gaps and develop a solution to fill any need you identify.
• Make sure you can clearly explain why people should buy from you. Be the expert.
• Be confident in asking for business. For example, if you have a refreshments business, when a new venue opens nearby, you could approach the business and ask about becoming their supplier.
• Make sure your website appeals to all markets. Use plain English and avoid using jargon where possible. Include case studies that are relevant to different industries and different areas of the country.
• Invest in a non-geographical telephone number to give potential customers the confidence to deal with a supplier outside their local area.

Public sector contract opportunities

Selling products or services to government bodies can be a good opportunity for some businesses. Small to medium-sized enterprises can compete successfully for public sector contracts, from central government departments and local authorities to the armed forces.

Before preparing a tender, carefully consider whether it is worth bidding for. Preparing and submitting tenders can be time-consuming, costly and use valuable resources. If you don’t get the contract, the money and time spent is usually lost. You also need to consider how important the customer is to your business.

Submitting proposals and tenders can also help raise your profile and help you learn about customers’ needs.

If you aren’t successful use the experience to strengthen your future tender applications. Writing a tender can clarify your aims, strengths and weaknesses as a business. Ask for feedback on your bid so you can learn from the experience.

Start-up businesses in particular may want to consider contacting local authorities directly to ask to be put on their supplier list so they can contact you when a need arises in your area of expertise. This will help establish relationships with customers and to raise your profile.

Procurement opportunities with local authorities can be found on individual local authority websites.

Private sector contract opportunities

Private sector contracts are filled through word of mouth, recommendation, preferred supplier lists and advertising. You can win business in this way if you:

• contact target companies directly and ask to be put on their supplier list
• build contacts with potential customers
• network with people in your own market and other industries
• look for advertisements in local and national newspapers and also trade and professional magazines covering your area of business
• research contracts outside your business sector which may produce secondary contracts
• follow up press and other reports – a company may be expanding or sub-contracting part of a big order

Provide evidence that you can deliver on quality

Whenever you compete for business you need to be sure that you deliver on quality.

Evidence of quality management systems, financial status and accreditation will need to be produced, usually upon initial contact with the customer or in the tender document.

If you are quoting, or requesting to be put on the supplier list, you may want to photocopy certificates proving compliance with certain standards – eg ISO9001 or industry-specific standards – and evidencing your capabilities. Send these to the customer with your covering letter or quote.

Formal accreditation of your business can increase your visibility, giving you a competitive advantage as it generates customer awareness and customer confidence. Find out how to get your business accredited by the United Kingdom Accreditation Service on the UKAS website.

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How to improve your business exposure

Keeping cash flowing into your business is paramount and marketing should be a critical part of your business strategy. If you don’t have a huge budget it may seem difficult to get your business name more widely known. However, there are many cost-effective ways to raise your profile.

Using the internet for marketing and business promotion

A website for your business is an invaluable marketing tool to promote who you are and what you do. It can house your success stories and case studies, showcase your products and services, engage customers with forums, webinars or podcasts and provide prices, contact details, location, etc. Ensure that the website is easy to find by getting a memorable web address (URL), making the most of search engine optimisation, and by making sure it’s clear and straightforward to use.

See our guides on best practice in web design and search engine optimisation.

Networking

Attending industry events – tradeshows, exhibitions, seminars and conferences – can be a good way to learn about what customers want and to learn from other businesses.

Networking with people in your industry sector and from other sectors can give you a different perspective on the market and potential opportunities. Take part in seminars and conferences, listen to what others have to say and use this information to your advantage. You can also volunteer to speak at events to raise the profile of your business.

Always remember to take your business cards to these events and prepare in advance what you are going to tell people about your business.

Find out more about networking in our guide on learning through networking with others.

Join trade associations or business groups

Joining a trade association or business group such as the Federation of Small Businesses (FSB) or the British Chambers of Commerce (BCC) not only brings credibility to your business but also provides other benefits such as cost-effective advertising in member publications and access to low-cost networking events.

You can find information about joining a trade association on the FSB website- Opens in a new window.

Stay in touch with customers

Don’t focus all your attention on attracting new customers. Look after customers who come to you to make sure they return for more.

You can stay in touch through newsletters or e-bulletins outlining your latest business news and special offers. Add value by including articles which would interest your customer, for example a guide which addresses common problems in your area of expertise and suggests solutions.

Working in partnership

Partnering with complementary businesses – overseas as well as the UK – gives you opportunities to sell and promote each other’s products and businesses, and to sell to new customers.

Get in touch with other businesses and see how you could work together. Find out more about partnerships in our guide on joint ventures and partnering.

Accreditation and standards

Standards can help you ensure your products, services or business systems meet fixed specifications or quality benchmarks and can boost credibility with customers and suppliers. They can also help you manage your business more effectively and make the most of your innovations.

See our guide on how to make best use of standards.

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Useful links and resources for business opportunities

Joining a business organisation brings credibility to your business and can help you generate new business.

The British Chambers of Commerce (BCC) provides international trade support including market research, translation services, trade missions, export planning and networking. Find out about help and support for businesses on the BCC website- Opens in a new window.

The Confederation of British Industry (CBI) works to help UK businesses compete effectively and lobbies the government. Read about the work of the CBI on the CBI website- Opens in a new window.

The Federation of Small Businesses (FSB) offers support for small and medium-sized businesses and entrepreneurs in the UK. Read about joining the FSB on the FSB website- Opens in a new window.

The Institute of Directors (IoD) provides support for directors of businesses. Find out about what the IoD offers on the IoD website- Opens in a new window.

There are other associations which represent individual trades and sectors. Find a trade association on the Trade Association Forum website- Opens in a new window.

The Social Enterprise Coalition (SEC) works to raise the profile of social enterprises and highlight their achievements. Read more about social enterprises on the SEC website- Opens in a new window.

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