We’ve launched in Europe! | Weekly Lending Review

Week 43: 19 – 23 October 2015

We’re excited to announce that Funding Circle has expanded into Germany, Spain and the Netherlands to help millions of businesses across Europe access finance. You can read about the news here or watch this short video.

We’re excited to help more businesses access finance, although due to regulatory differences in each country, lending for UK investors is currently restricted to UK businesses.

New loans available to you

There are currently 30 loan requests on the marketplace, and thousands of loan parts available for you to buy.

The total value of new loans listed on the Funding Circle marketplace was £11,709,360 averaging at £73,656 per loan. The largest loan value was £460,000 and the smallest loan value was £5,000.

Business loans available to bid on:

Loan parts available for you to buy:

Your actual return may be higher or lower as by lending to businesses, your capital is at risk.

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The dates on the graph should be read as ‘week beginning’, for example: 19-Oct represents the week of 19th – 23rd October 2015.

The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn (The calculation is AGY = (1 + (two week rolling weighted average rate/12))^12 – 1). You can view the latest gross interest rates accepted on the marketplace on our statistics page.

Weekly average gross yield (2 weeks rolling)

Yield WLR 43

Number of loans, value of loans and amount lent are reported weekly.

Number of listed loans per week

Loans listed WLR 43
Listed loan value per week

Loan value WLR 43

Total amount lent

Amount lent WLR 43

Loan parts available to buy from other investors

Loan parts WLR 43

News you should know

Updates to how Autobid works

Over the coming weeks we will make a change to how Autobid works, helping to provide more time for those who want to research a business before placing a bid. No action is needed if you are a current Autobid user.

Going forward, Autobid will fund up to 50% of the available loan after a loan is listed, and if the loan does not reach 100% within the first 2 days the Autobid cap will be removed completely.

Things we’re talking about

We’re on-hand to talk about the move to fixed rates on the forum. You can join the conversation here.

Loans defaulted last week

Ground source heating supplier. Loan 5535. Risk band C

This Stafford business has been running since 2007 and is likely to enter a formal insolvency process in the coming weeks.

Aerospace specialists. Loan 10159. Risk band A

This Monmouthshire business was established in 2006 and has ceased trading.

Engineering consultancy. Loan 4478. Risk band A+

This Cumbria business has been running since 2004 and is consulting a debt charity.

Project management company. Loan 11517. Risk band C

This Country Durham business was established in 2003 and has been unable to make repayments since June.

Legal practice. Loan 5940.  Risk band A

This Devon business has been running since 2009 and has been unable to repay the agreed three-month payment plan.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans and they will provide you with updates in the loan comments section on your summary page. Read more about how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

Tips for positioning your company for successful expansion (part two)

There’s no doubt that UK small businesses are driving economic growth. Research from the Centre for Economics and Business Research found that although high-growth small businesses represent just 1% of UK businesses and only 3.4% of the total UK economy, they generated 36% of UK economic growth in 2014 and created two in three new jobs (68%) between 2012 and 2013. The key, however, is in making sure your company’s growth is sustainable.

In this 2-part series we’ve been looking at 6 steps to ensure you have the infrastructure in place to expand effectively and sustainably. The first 3 steps outlined in our previous post were to articulate your brand and proposition, define your universe of new prospects and get a customer database. The final 3 steps are outlined below:

Generate awareness of your company and your offering

The biggest problem small businesses have when expanding is that no one in the new market knows you. LinkedIn conducted research on the sales cycle and found that just 2% of sales are made on the first contact with a company, whereas 80% of sales are made by the 12th contact. This shows that there are a myriad of different touch points within the purchasing process, and you need to be there at as many as possible.

Those touch points could be reading a story about you in a trade magazine, reading a white paper from your website, or seeing a post on an industry LinkedIn group. All this activity helps position your company as an authority, which psychology research has found to be a key influence on human behaviour (and therefore purchasing decisions).

Once there is awareness in the market, lead generation activity becomes easier and more cost effective.

Put cost-effective lead generation activity in place

Once you’ve defined your universe, you’ll be able to determine the most effective lead generation channels for the different people involved in the decision making process. Do purchasing managers search for suppliers on Google? If so, you need to make sure you’re on the first page of search results. The number one position in Google’s search results receives 18.2% of all click-through traffic. The second position receives 10.1%, the third 7.2%, the fourth 4.8% and all others are under 2%.

Do key managers spend lots of time away from their desk? In that case, email marketing may be more effective than direct mail or telesales.

The key is to think about all of the potential touch points and cover as many of them as possible, always measuring your activity so you can refine your approach and dedicate your resource to what is most effective.

Love your customers to death

The classic 80/20 rule says that 80% of a company’s future revenue will come from 20% of its existing customers. It is particularly important to nurture your existing customers when undertaking expansion, because you don’t want to expand at the expense of retention.

You need to make sure you have the infrastructure – be it distribution, customer service, logistics, production – to serve the customers your sales team converts. And then you need to keep them engaged so that they buy from you again.

From streamlining the quotation, ordering and deliver paperwork through to service level agreements on queries and regular customer newsletters, you need to take every opportunity to show customers you value their business and want to be a long-term partner.

Taking the time to make sure you have the right fundamentals in place will ensure you are targeting the right prospects, appealing to your current customers, using the most cost effective lead generation channels and are ultimately on the right route to achieving sustained growth that will stand the test of time.

We hope this 2-part series has been helpful in positioning your business for expansion. Let us know what you want to find out in our next business tips post in the comments section below.

By Tim Witcherley, Cognition Agency

You read more marketing tips by downloading any of Cognition’s free eguides.

Cognition is a full-service marketing agency and a Funding Circle borrower. It’s known for its commercial approach, linking marketing activity to revenue and growth.

If you’re interested in taking out a Funding Circle business loan, you can apply online at anytime.

 

Funding Circle launches across Europe to help more small business access finance

Today we’re excited to announce that we’re joining forces with Zencap, to create the first truly global marketplace lending platform and to help millions of businesses across Europe access finance.

charlie image

Zencap currently operates in Germany, Spain and the Netherlands, and has experienced strong growth over the past 18 months with more than €35 million lent to 520 businesses. They are Continental Europe’s leading marketplace for small business loans and will now operate as Funding Circle across Europe.

Together as one business we combine their established home grown team and local knowledge, with our experience and innovative technology. The European business will operate separately from Funding Circle in the UK, so there will be no change to your lending experience; investors based in the UK will continue to lend to businesses in only the UK. 

Since launching in the UK in 2010, the Funding Circle marketplace has helped 12,000 businesses access more than $1.5 billion of finance in the UK and US. We’re excited to be taking this technology to Europe, so we can help businesses borrow in a faster and more efficient way whilst giving investors the opportunity to make a return on their money.

Commenting on today’s news, Samir Desai CEO and co-founder of Funding Circle said: “Our vision is to help millions of businesses across the world sidestep the outdated and inefficient banking system and borrow from investors. Today’s news is the next exciting stage of this journey. We have been hugely impressed with what the Zencap team have achieved so far. By coming together we combine Funding Circle’s leading position in the UK and US with Zencap’s deep understanding of local markets to create the first truly global marketplace lending platform.”

Today’s news is the next step towards a global revolution in the way small businesses access finance. We’re over on the forum talking about this, so please do join the conversation.

The Funding Circle team

News

No tricks, just treats | Weekly Lending Review

Week 42: 12 – 16 October 2015

Halloween’s approaching, but don’t be afraid. We’ve put together a list of ideas to make sure your friends and family have a frighteningly fun time. Read our guide to a spooky Halloween on the blog.

New loans available to you

There are currently 33 loan requests on the marketplace, and thousands of loan parts available for you to buy.

The total value of new loans listed on the Funding Circle marketplace was £13,839,260 averaging at £83,145 per loan. The largest loan value was £463,000 and the smallest loan value was £6,000.

Business loans available to bid on:

Loan parts available for you to buy:

Your actual return may be higher or lower as by lending to businesses, your capital is at risk.

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The dates on the graph should be read as ‘week beginning’, for example: 12-Oct represents the week of 12th – 16th October 2015.

The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn (The calculation is AGY = (1 + (two week rolling weighted average rate/12))^12 – 1). You can view the latest gross interest rates accepted on the marketplace on our statistics page.

Weekly average gross yield (2 weeks rolling)
Yield WLR 42

 

Number of loans, value of loans and amount lent are reported weekly.

Number of listed loans per week

Loans listed WLR 42

Listed loan value per week

Loan value WLR 42

Total amount lent

Amount lent WLR 42

Loan parts available to buy from other investors

Loan parts WLR 42

News you should know

We’re always keen to hear your feedback

Would you be happy to provide a testimonial about your experience of Funding Circle? Provide feedback in just a couple of minutes by clicking here.

Things we’re talking about

We’re on-hand to talk about the move to fixed rates on the forum. You can join the conversation here.

Loans defaulted last week

Night club. Loan 2970. Risk band C

This Oxfordshire business has been running since 2006 and has proposed a Company Voluntary Arrangement.

Garage. Loan 10070. Risk band A

This Derbyshire business was established in 2005 and is being placed into Creditors Voluntary Liquidation.

Online bookshop. Loan 3133. Risk band C

This Surrey business has been running since 2008 and has been placed into Creditors Voluntary Liquidation.

Marketing agency. Loan 7170. Risk band A

This London business was established in 2005 and is being placed into insolvent liquidation.

Convenience store. Loan 9128. Risk band C

This East Sussex business has been running since 2003 and has proposed a Company Voluntary Arrangement.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans and they will provide you with updates in the loan comments section on your summary page. Read more about how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

Fixed interest rate roundup and an interview with a borrower in The Times | Weekly Lending Review

Week 41: 5 – 9 October 2015

Fixed interest rates have been on the marketplace for just over two weeks since launching on Monday 28th September, so we wanted to share some initial insights into the trends we’re seeing on the marketplace which you can read about on the blog.

Thank you to everyone who has provided feedback. If you have any additional questions you can join us on the forum or send us an email: contactus@fundingcircle.com

New loans available to you

There are currently 30 loan requests on the marketplace, and thousands of loan parts available for you to buy.

The total value of new loans listed on the Funding Circle marketplace was £12,277,540 averaging at £75,704 per loan. The largest loan value was £415,000 and the smallest loan value was £5,160.

Business loans available to bid on:

Loan parts available for you to buy:

Your actual return may be higher or lower as by lending to businesses, your capital is at risk.

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The dates on the graph should be read as ‘week beginning’, for example: 5-Oct represents the week of 5th – 9th October 2015.

The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn (The calculation is AGY = (1 + (two week rolling weighted average rate/12))^12 – 1). You can view the latest gross interest rates accepted on the marketplace on our statistics page.

Weekly average gross yield (2 weeks rolling)

yield WLR 41

Number of loans, value of loans and amount lent are reported weekly.

Number of listed loans per week

loans listed WLR 41

Listed loan value per week

loan value WLR 41

Total amount lent

Amount lent WLR 41

Loan parts available to buy from other investors

loan parts WLR 41

News you should know

September industry news

The Times interviewed borrower Verto Homes, who are building 21 environmentally friendly family homes in Cornwall, and Funding Circle was ranked No. 1 in Business Insider’s 17 hottest fintech companies in Britain. Read our roundup of last month’s industry news on the blog.

Things we’re talking about

Trick or Treat?

Halloween’s approaching, but don’t be afraid. We’ve put together a list of ideas to make sure your friends and family have a frighteningly good time. Pick your poison on the blog.

Loans defaulted last week

Home insulation specialists. Loan 10851. Risk band A+

This Manchester business has been running since 2003 and is looking to be placed into creditors voluntary liquidation.

Food wholesaler. Loan 1368. Risk band A

This London business was established in 2006 and the borrower has become unresponsive.

Bus service operator. Loan 11003. Risk band D

This Glasgow business has been running since 2010 and ceased trading on 26 July 2015.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans and they will provide you with updates in the loan comments section on your summary page. Read more about how our collections and recoveries process works on our blog.
Enjoy lending, The Funding Circle Team

Trick or treat? Funding Circle’s guide to a spooky Halloween

Halloween’s approaching, but don’t be afraid. We’ve put together a list of ideas to make sure your friends and family have a frighteningly fun time.

Pick your poison

Specialists in fair-trade family treats, York based Choc Affair, who borrowed £60,000 in 2013, have a range of Halloween chocolates great for kids and grown-ups alike! We like the look of their Chocolate Skull Lolly, made with delicious creamy milk or white chocolate.

Hopping popping frog chocolateOr there’s the creatively creepy Hopping Popping Frogs from James Chocolates in Somerset, who borrowed £60,000 through the marketplace in 2014. They’re hand-painted and should surprise your guests with delicious popping candy. We recommend just biting their heads off!

Pumpkin perfection

Whether you’re a seasoned professional or a frightened first timer, pumpkins and Halloween go hand in hand. Why not carve a pumpkin that will make your neighbours jealous, and help the community, by purchasing through family-run business Annie’s Fruit Shop (Who borrowed over £30,000 in October 2015). While you’re at it why not order some bobbing apples too…

Ghoulish gowns and other fancy dress

Utopia halloween fangsUtopia Costumes borrowed £30,000 in 2014 and is one of the UK’s leading suppliers of theatrical costumes for professional and amateur stage shows! Based in Scotland, they have a range of Halloween goodies, including masks, scars, teeth and wigs, to help make you look gruesome.

Or try something wicked from Sensible Supplies, an Aladdin’s cave full of goodies, including sweets and decorations. They stock over 700 different Halloween costumes and we visited them back in 2013:

Not a trick or treater?

If you’re looking to keep your eerie efforts more low key, why not fill your home with seasonal flowers? Combined florist and gift shop, The Flower Emporium in Stockport, who borrowed £5,000 in September 2015 to refurbish, have a beautiful range of seasonal bouquets more likely to delight than fright.

Are you interested in lending to businesses?

Support small businesses in the UK and you can earn a great return. It takes minutes to sign up online and you can use our investor information guide to help you get started. We have thousands of loans which you can be a part of, making it quick and easy to build a diversified portfolio. Remember, by lending to businesses your capital is at risk.

Does your business need finance?

We’ve helped more than 12,000 businesses in both the UK and US access finance. You can apply online in less than 10 minutes and check your business’ eligibility in 30 seconds.

Enjoy Lending. The Funding Circle Team

 

A roundup of the first week with fixed interest rates

Fixed interest rates have been on the marketplace for just over a week since launching on Monday 28th September, so we wanted to share some initial insights into the trends we’re seeing. Many of you have asked for some details about how the first week has been, so we hope you find the below useful.

Highlights

1) You helped 175 businesses across the UK access finance last week and £6.3 million of new fixed rate loans were listed on the partial loans marketplace.

2) 8 businesses had their loans listed and accepted in one day, meaning committed funds are being used efficiently and businesses are accessing loans faster than before.

3) Secondary market liquidity has increased with more loan parts selling, as a proportion of those listed, than previous weeks.

Speed of funding loans on the primary market

Before launching fixed rates we expected the average time taken for loans to fund to decrease. Last week, many of you will have seen loan requests filling particularly quickly, which was mainly caused by an increase in available funds and fewer loans available to lend to:

1) In the week before fixed interest rates launched, £5.4 million of loans were listed on the partial marketplace, compared to £6 million and £6.3 million listed in the previous 2 weeks. This created more available funds for the week commencing 28th September, contributing to loans filling quickly.

2) A small number of investor accounts were filling a high proportion of loans in the opening minutes of a loan request. This activity breaches our terms and conditions, as there is a  20% funding limit in place for each loan.

The median time to fund loans increased as the week progressed, from 1 hour on Monday, when an electronics company in Nottingham had their vehicle loan fund in just one minute, to 26 hours on Friday.

Whilst we want the marketplace to help businesses with fast access to finance, we recognise that some investors want time to carry out their own research. We’re working to strike a balance between fast access to finance and time for due diligence as we move forward.

How have fixed rates affected the secondary market?

The secondary market enables you to buy and sell loan parts with other investors, meaning you can build a diversified portfolio quickly.   

Over the past week and since fixed rates have launched, liquidity on the secondary market has increased with 94% of business loan parts sold when listed at par, 80% of loan parts sold with a discount and 45% sold with a premium, excluding property loan parts. This is based on the number of loan parts listed and sold in each week.

We’ve also seen a sustained rise in the proportion of loan parts sold at a discount since the beginning of September, further improving liquidity for you. Autobid has been updated so it can buy loan parts listed at a discount, and the maximum discount available when selling loan parts has also been increased from 3% to 20%.

LPs sold

What about property?

A lower proportion of property loan parts have sold during this period in comparison to business loan parts and this difference can be attributed to the cashback promotion we have been running on property loans. Comparing the lines on both graphs, discounted loan parts are selling for both business and property loans at a similar rate of 80%.

property LPs

Buyer rates on the secondary market

The weighted average buyer rates for loan parts which are currently on the secondary market are listed below, shown beside the current fixed interest rates on the primary market. These are gross interest rates, before fees and estimated bad debts and data is correct as of 5th October. Your actual return may be higher or lower as your capital is at risk.

primvssec

Conclusion

We hope the information provided has been a useful snapshot of the marketplace today, a week and half since launching fixed interest rates for new loans. We are working to strike a balance between the experience of both investors and borrowers, so we will continue to monitor the speed of loans funding and take steps to ensure time is given to review lending opportunities.

The current funding process has proved to be more efficient than before, and we hope you see the benefits of your money working harder for you soon.

We’re over on the forum to help answer any further questions you have.

The Funding Circle team

Did you lend to Verto Homes? September industry news

Newspapers - Copy

EIB turns to peer-to-peer lending for UK companies

Top notch coverage in the Financial Times last week as the European Investment Bank discussed their plans to work with us. They are preparing to lend £100 million through our platform, and believe our model is a dynamic way to channel government-backed funds for small businesses. The EIB were quoted saying: “This is an interesting direct model for supporting small businesses, which has the potential to be quite efficient”.

Smart housebuilders stand out from the crowd

In this article, Kathryn Hopkins discusses the battle with the banks as a house building business, Verto, struggled to access finance quickly in order to build homes in Newquay. After turning to Funding Circle, it took only three weeks to secure their first loan, and they are now building 21 homes in the area. To date, your lending in the property sector has mainly gone towards funding residential developers, such as Verto Homes, who specialise in building eco-homes in Cornwall. Read more about these types of loans on our blog.

Funding Circle, H&R Block partner to offer loans to small businesses

Across the pond, we announced an exciting new partnership with Block Small Business, giving thousands more small American businesses greater access to finance. Our agreement will mean that Block Small Business will refer small business clients looking for finance to Funding Circle. We believe that by working in partnership, we can help more small businesses grow, and bring investors more lending opportunities on the marketplace. More coverage found here.

Four funds advisers tip for a retirement income portfolio

Following the new pension freedoms introduced earlier this year, pensioners now have many different ways to maximise their retirement income, depending on what they want to achieve. This interesting article from the Telegraph looks at the ‘drawdown’ route and examines different types of funds available. Alongside these funds, marketplace lending is listed as another option to earn an attractive return.

The 17 hottest fintech companies in Britain ranked

And finally, Funding Circle was ranked as one of the hottest fintech companies in Britain. We are very pleased to have this recognition, as it means we are truly making a difference to investors and small businesses across the UK, and it’s all thanks to your lending. We were also spotted on the Tech Track rank list, which you can read here.

News

Did you help 175 businesses access finance last week? | Weekly Lending Review

Week 40: 28 September – 2 October 2015

Last week, you and other investors helped 175 businesses across the UK access £12.3 million through the Funding Circle marketplace. Of the new loans listed, the South-East was the most popular business location, and property & construction was the most popular sector.

New loans available to you

There are currently 32 loan requests on the marketplace, and thousands of loan parts available for you to buy.

The total value of new loans listed on the Funding Circle marketplace was £11,807,640 averaging at £70,485 per loan. The largest loan value was £490,000 and the smallest loan value was £5,000.

Business loans available to bid on:

Loan parts available for you to buy:

Your actual return may be higher or lower as your capital is at risk.

Weekly marketplace trends

These graphs show the most recent activity on the marketplace. The dates on the graph should be read as ‘week beginning’, for example: 28-Sept represents the week of 28th September – 2nd October 2015.

The average gross yield graph is reported weekly and shows a rolling two week average of gross yields. This calculation assumes you reinvest your interest each month and therefore includes the compound interest you earn (The calculation is AGY = (1 + (two week rolling weighted average rate/12))^12 – 1). You can view the latest gross interest rates accepted on the marketplace on our statistics page.

Weekly average gross yield (2 weeks rolling)

Yield WLR 40

Number of loans, value of loans and amount lent are reported weekly.

Number of listed loans per week

Loans listed WLR 40

Listed loan value per week

Loan value WLR 40

Total amount lent

Amount lent WLR 40

Loan parts available to buy from other investors

Loan parts WLR 40

Loans defaulted last week

Swimming pool installations. Loan 10763. Risk band B

This Glasgow business has been running since 1995 and was placed into compulsory liquidation on 24 August 2015.

Energy efficient combi-boiler installers. Loan 9218. Risk band B

This Dundee business was established in 2011 and has breached terms within their loan contract.

Plant hire. Loan 7687. Risk band B

This Essex business has been running since 2001 and was placed into administration on 24 August 2015.

Synthetic ceramic specialists. Loan 480. Risk band B

This Kent business was established in 1990 and was placed into administration on 9 April 2015.

Online retailer. Loan 1706. Risk band C

This Lancashire business has been running since 2009 and the guarantors have instructed a debt charity.

Our collections and recoveries team are working to recover the outstanding amounts for all of these loans and they will provide you with updates in the loan comments section on your summary page. Read how our collections and recoveries process works on our blog.

Enjoy lending, The Funding Circle Team

Summary from our September investor evening

On Thursday 17th September we welcomed 60 investors to our office in London, to talk about the decision to move to fixed interest rates for new loans. We filmed the whole event, so those unable to attend could hear what was discussed.

Since announcing our intention to make this change we’ve received a great deal of feedback, so thank you to all of you for taking the time to give us your thoughts. We have answered some of your key questions on the blog, and used these questions as the focus for the evening.

We’ve put together a 5 minute highlight videos below of the key points discussed. You’ll hear from co-founders Samir Desai, James Meekings and Andrew Mullinger, and from Tom Eilon who works on special projects.

You can watch the whole event in the video below. The team answered questions throughout the evening rather than having a Q&A section at the end and the key points have been noted below. Unfortunately the sound was not good during the first 5 minutes, but levels out after. The whole filmed event lasted for appox. 2 hours.

Key moments can be found at the following times:

0 – 0.05 hours Introduction

0:05 – 0.12 hours Why we’re moving from an auction model

0:12 – 0.22 hours Answers to some of the most popular questions we’ve received.

These include, “How is Funding Circle different to a bank?”, “How will the rates be set?”, “How can you manage loans filling quickly?” and “ What about secondary market liquidity?”

0:22 – 0:25 How are rates set and what returns can investors expect?

0:37 – 0:40 Diversification

0:40 Lending to small businesses in the US

0:46 and 0:58 – 1:00 Autobid

0:49 – 0:57 What will happen to the Q&A with borrowers?

1:00 – 1:04 How are we attracting more businesses to Funding Circle?

1:04 – 1.15 Risk management and loan performance

1.26 – 1.29 Looking ahead

We will post a roundup of our first week with fixed interest rates in the coming days, and hope you enjoy the video. 

If you have any questions about fixed interest rates, please get in touch and we’ll be happy to help or you can join us on the forum.

The Funding Circle team

Tips for positioning your company for successful expansion (part one)

There’s no doubt that UK small businesses are driving economic growth. Research from the Centre for Economics and Business Research found that although high-growth small businesses represent just 1% of UK businesses and only 3.4% of the total UK economy, they generated 36% of UK economic growth in 2014 and created two in three new jobs (68%) between 2012 and 2013.

The key, however, is in making sure your company’s growth is sustainable. It requires a proactive and strategic approach to expansion, so you outperform market trends and smash the competition, but without overextending your resources or reducing the service levels you provide.

There’s no point in your sales team winning lots of new business if you don’t have the infrastructure to service and retain it. Research by Mintel revealed businesses that approach marketing by building the proper foundation see a 42% increase in effectiveness and return on investment.

In this blog (part one) and the next (part two) we’ll be looking at 6 steps to ensure you have the infrastructure in place to expand effectively and sustainably. The first 3 steps are:

Articulate your brand and proposition

Does what you say about yourself reflect your future business? If your company has relied on organic growth, chances are your branding hasn’t evolved to keep pace with the change. It’s very common for high-growth small businesses to have a logo, visual identity and key messages that are out of date.

The problem with this scenario is that your first impression (such as your website, brochure, etc) doesn’t reflect who you actually are. You therefore find yourself in situations where prospects will say to your sales people, ‘I had no idea you did all that from looking at your website.’ And there will be prospects who you never meet, or never know anything about, because your brand and proposition doesn’t reflect how you help customers achieve their goals or overcome their challenges.

In many cases, there will be new players that look and sound better than you, even though you know they offer an inferior product or service.

Thus, when you’re preparing for expansion you need to make sure your brand communicates the story you want to tell, so that you resonate with a target audience that knows nothing about you and is going to be comparing you to an incumbent or other potential suppliers. (For tips on how to make an impact on customers and stand out from the competition, download Cognition’s guide, ‘Creating a Brand.’ )

Define your universe of new prospects

To expand successfully you need to fill in the detail between knowing there’s a big untapped market out there and knowing who the specific companies and decision makers are that will help make that expansion a reality.

Let’s take an example of a Midlands-based manufacturer. You have a solid book of repeat orders for your widget and you’re selling them into the key Midlands original equipment manufacturers, to the point where you’ve saturated the region. The next logical step is to expand beyond the Midlands, because you know there’s business to be had nationally. But who do you approach first?

This is where good market intelligence is worth its weight in gold. Rather than going for a scattergun approach, the right data enables you to target your sales and marketing resource to where the likeliest prospects are, so you can focus on those who will offer your business the greatest lifetime value. (For more information on defining your customers, read Cognition’s blog, ‘4 steps to ensure you have the right customers.’)

Taking our manufacturer example, an analysis of registered companies and their finances might show there is a high concentration of original equipment manufacturers taking on new projects in the North West, but that those projects are driven by public grants and have long procurement processes. As a result, you might be better off targeting smaller companies in Yorkshire that will be purchasing lower volumes, but will give you a lower cost of sale and more repeat business.

Get a customer database

Once you know your universe, you need to have the IT infrastructure in place to track your sales and marketing activity. That comes in the form of a Customer Relationship Management (CRM) system. There are lots of systems out there with a range of functionality. The important thing is that you have a way of tracking the people you have contact with, and how they interact with your sales and marketing.

Think of your CRM system as a barrel. Once you’ve identified your universe, you get the contact details for the decision makers at all the prospect companies and put them in that barrel. You can target them with the right message at the right time, so that the greatest possible proportion of those contacts convert into customers.

What’s next?

We hope this has been helpful in understanding the first steps to positioning your company for successful expansion. Stay tuned for the next installment where we’ll run through generating awareness of your business, putting cost-effective lead generation activity in place and loving your customers to death.

By Tim Witcherley, Cognition Agency

You read more marketing tips by downloading any of Cognition’s free eguides.

Cognition is a full-service marketing agency and a Funding Circle borrower. It’s known for its commercial approach, linking marketing activity to revenue and growth.

If you’re interested in taking out a Funding Circle business loan, you can apply online at anytime.