Essex entrepreneur James Downes built Cable Power to become a leading provider of electronics accessories and solutions for the single board computer market. Here James explains his recipe for success
"My company Cable Power grew by a whopping 400% over two years. Earlier this year the company was acquired by Stadium Group plc, a multinational supplier of connectivity solutions with more than 100 years of trading history. I am now using the same approach with my latest business venture, Maker Life, which is projected to generate over £700,000 in its first year.
"The holy grail of rapid growth comes with many potential pitfalls. A considered approach based on your specific business and your market is crucial. Here's what I've learned about how to achieve quick business expansion without losing your way."
Understand what your customer needs
"All successful companies are built around their customers - meeting their needs and offering great service. It can help to put yourself in the customer?s shoes, and build your business around their needs.
"In 2013, when Cable Power was set up, single-board computers had rapidly grown in popularity due to their simplicity, affordability, and flexibility. With the right components, it is possible to program them to do almost anything, and they are extremely popular with the smart home market.
"The challenge for builders is finding the right parts for the project at hand. Stepping into their shoes, I realised that they would need a clear idea about how to use each component and its compatibility with other parts. They would also want fast delivery and a clear returns policy, in order to feel happy and safe ordering from us.
"This created a clear brief centred on customer needs and desires. The brief informed everything we did, from our website design to the products we sold. Following our launch, we paid close attention to any customer feedback in order to hone and improve our service, developing a business that customers loved."
The tools for success
"Harnessing new technology can offer a competitive edge. It can be used to reduce costs, minimise staff requirements, improve user experience and delivery speed, as well as making compliance and other back-office tasks quicker and more robust.
"For Cable Power, adopting a virtual team approach allowed us to offer flexible yet fast deliveries, without the need for unnecessary staff costs.
"The technology you choose will depend on your business, but there are always gains to be made by implementing the right choice. A word of warning: don?t go overboard. Making your technological ecosystem too complex can be burdensome and expensive, negating any gains you make.
"Ideally, you want to find the minimum amount of the right technology."
Getting the pricing right
"Finding the right margins is essential for rapid growth. It can involve some user testing and trial and error, but eventually you will discover margins that work for your customers while helping you unlock rapid growth.
"The important thing to remember is that the maximum margin doesn?t always equal maximum growth. Just because some people will pay more for a product, that doesn?t mean everyone will, and you?ll find your sales volumes decreasing.
"With Cable Power, for example, we knew that customers were looking for relatively cheap yet high-quality components. Pricing too high would send customers to the cheaper competition; pricing too low would limit our growth and make customers question the quality.
"We experimented with a few different margins - starting at the upper-middle end and reducing prices over time, keeping a keen eye on our sales. Eventually we found the perfect balance which helped us grow rapidly through customer acquisition and strong sales.
James' three key lessons
- "Love the customer and build the offer around their needs. The customer needs to sit at the heart of everything you do."
- "Use innovative technology to stay agile and keep costs low - but resist the urge to overdo it."
"Trade at the best margin to help you build a strong customer base while giving the right impression of your brand."