The Small Business Service (SBS), an executive agency of the Department of Trade and Industry, recently published Small and Medium-sized Enterprise (SME) Statistics for the UK in 2005, which revealed some interesting numbers. There were an estimated 4.3 million business enterprises in the UK at the start of 2005, an increase of 59,000 (1.4 per cent) on the start of 2004. However, Small businesses (0 to 49 employees), but typically with no employees represented 3.2 million, equivalent to 72.8 per cent of all enterprises.

Unfortunately, it is also a well-publicised fact that the key reasons new businesses fail, particularly in the first year, are poor management of cash flow and inability to find a consistent flow of new business. Research by the Small Business Research Trust has established that small businesses represent the overwhelming majority of insolvencies - 85% in the latest survey - and you can see the link. Bad debts kill small firms.

Over the years I have established several businesses, both on my own and with others, and the following is an attempt to highlight 5 key things that I believe should help you to find new business. Clearly, there are many other things that you need to consider before you launch a business that are too numerous to mention in this short article, but if one of these 5 suggestions helps you then this article has served its purpose.

Be clear

I cannot over emphasise the need to focus! It is critical for your business that you and more importantly prospects fully understand the products or services you provide and the customers, either individuals or organisations you provide them to.

For example, I provide business to business copywriting and communication products and services to companies in the IT and business services sector. This focus has enabled me over the past two years to create a client base of over two dozen companies, who regularly use my services, and that range from small £1M turnover IT companies to the largest IT software company in the world. This does not mean that I can take it easy and I am constantly looking at ways of generating more business.

By focusing on the type of customer you want, everything you say, do, and send out should then reflect your focus. Read what your customers read, go to the same events, essentially step into their shoes, and see the world from their eyes. It is likely to look different, but will help you to be able to better position the products and services you provide.

Having a clear focus is imperative to success and I have seen a range of large and small companies who struggle because they lose their way.

Focus, and the results will come!

Manage your time

We are all familiar with 'cause and effect' yet so often when people ask me how they can increase new business and then reveal how much time they spend on new business generation activities - the numbers simply don't stack up.

I know there are many people reading this running small businesses thinking but, 'how do you find the time?' Generating new business is important - make the time! There are numerous things in running a small business that we all find hard, boring, or just plain scary. I hate dealing with finance, but for others it is picking up the phone to make a cold call. However, allocating just a small portion of time every week to chasing up enquiries, carry out some online networking or catching up with old contacts can prove rewarding. It is also far less scary when you just do it.

I have a spreadsheet I use that is constantly open and enables me to very quickly track every hour I work and what the activity is that includes sales, admin, driving to appointments to working on client projects. At the end of the week, I can see exactly what I have spent my time on and the revenue generated from these activities.

Remember, cause and effect, keep a task list and spend time doing activities that will move you in the direction of producing the results you need.

Networking

Cold calling may not be to your taste, and the thought of anything to do with sales and marketing may bring you out in a cold sweat, but these are necessary activities for your business to grow. There are many ways to generate leads but networking is one that continues to grow in popularity and success.

Networking is not new. Business people have been doing 'social networking' for many years, but now it is becoming more formalised and should be seen as an important mechanism for generating new business. Good referrals and personal recommendations often wipe out the competition, considerably reduce sales cycles, and also in the longer term create opportunities with a lot more people.

Bristol Business School says: "70% of business for entrepreneurs comes from direct personal contact - referrals and networking."

Sandler Sales Institute Study
• Cold calls are successful 1% of the time
• Word of mouth is successful 15%
• Referral goes up to 50%
• Referral plus the person who made the referral either participate on the sales call or attends the meeting - the success rate goes up to 80%

Networking is becoming an increasingly effective and important new business development tool - word of mouth makes selling easier. Why not take a look at ecademy (www.ecademy.com), OpenBC (www.openbc.com), Linkedin (www.linkedin.com) and Plaxo (www.plaxo.com) as they are all low cost ways of building a network, which used effectively, will help you to generate more new business.

Online Advertising

Increasingly people are 'letting their fingers do the walking' - over to the computer keyboard to search for goods and services online. At least 20% of my revenue so far this year, thousands of pounds, has come from advertising on sites such as Freelancers In The UK (www.freelancersintheuk.co.uk) and as I provide copywriting services, I also have profiles on www.holdthefrontpage.co.uk and www.journalism.com - all have generated good new business revenue for me this year.

Freelancers in the UK, in particular, is an excellent way of gaining an online presence that is much more cost effective than paying out for your own website - particularly if you are just starting out.

Pay for click advertising on Google helps me to drive traffic to my own website, using keywords for freelance copywriting, business copywriter and other keywords in the copy, which also generates new business and adds more contacts to my database.

Online advertising is a low cost way of promoting your business even when you are hard at work delivering your latest products of services.

Outsource

You are never too small to outsource!

We have already identified that as a small business owner you are busy, run off your feet, and have little time to do everything. Very few in this situation would normally think to outsource any part of their business, but it is critical that you focus on what you are good to drive your business forward and achieve your needs, goals, and aspirations. Getting others involved who can add complementary skills to your business, often at a reasonable cost, should definitely get the job completed a lot better and faster than you.

I can say this with confidence as I have an accountant and somebody to do all of my bookkeeping, which means that I can focus on sales, delivering projects, and customer care.

Where can you find these people? Take a closer look at Freelancers in the UK, or any of the other networking groups out there and you will find that there are thousands of people just like you and me, willing and able to help.

If you are just starting out I wish you well and I hope that this advice has helped you.