9 Strategies for Small Business Growth
The first few years that a new business is in operation are widely considered the most crucial. Unfortunately, only about 50% of small businesses survive past their first five years.
Once a company has survived its first few years in business, long term growth often becomes the primary objective. However, business growth can be encouraged from the very start of a new business and continued throughout its lifecycle.
A business owner may feel overwhelmed when deciding which growth strategy is best for their small business to undertake and implement. Thankfully there are many growth strategies that business owners and employees can utilize, either alone or collaboratively.
9 outstanding strategies for small business growth include-
1. Develop Market Reach
There are many great techniques to extend market reach available for small business owners to utilize. From opening new business locations to customer base expansion initiatives, business owners should identify which techniques are the best fit.
One main benefit of market reach development is of course bottom line profitability increases. Another benefit of expanding market research is an increase in business model stability.
Instead of depending on targeting specific new customer types, a more developed market reach increases business success probabilities significantly.
2. Market Share Increase
Aiming to increase control over the market is a great way to help grow small businesses. Targeting a niche market can result in a committed customer base formulation.
In this business growth strategy, instead of dedicating resources to attract new customers, the existing customer base is focal. Business tips for acquiring a niche market include identifying new customers that have a problem area to address and utilizing great customer service capabilities in order to retain them long term.
Additional business tips include the selection of a niche that encourages consistent sales. For example, offering a new product that requires replacement semi-regularly.
3. Diversifying Products
Diversification is a great way to grow small business revenue over time. There are 2 popular methods of diversification that business professionals commonly utilize.
The first method focuses on the introduction of a new product or new service that relates to the needs of a customer base that is preestablished. The second method focuses on a new market segment for a customer base that is preestablished.
4. Franchise Expansion
The most commonly recognized success stories frequently involve franchise companies. However, franchise business success is heavily dependent on brand recognition and a business model that is duplicable.
Creating a franchise requires licensure of a business model, brand, and processes. Franchising is a great opportunity to extend business success to other small business owners while generating a profit and expanding customer base reach.
5. International Growth
International markets are a great option to grow business operations for domestically based companies. Similar to franchising, international market expansion extends customer base reach and has huge business growth potential.
Before expanding internationally companies should closely evaluate their-
- Business plan
- Business model
- Company objectives
- Business trends
- Business planning initiatives
6. Trade Show Inclusion
Especially for a small business that is not yet ready to expand into a franchise or internationally, trade shows are an excellent growth option. Instead of building a new customer base from scratch, trade shows bring in new customers organically who are already interested in products or services similar to the type that a company offers.
Not only do trade shows present an opportunity to acquire new customers, but also to network with other small business owners in the same industry. Over time these connections can be incredibly valuable and lead to many opportunities.
7. Cost Efficiency Initiatives
Success stories and business tips often go into extensive detail about various ways that a company can increase bottom line profitability. However, no matter how extensive bottom line gains are, without proper budgeting they may be useless.
2 popular budgeting techniques for a growing business are liquidation and marketing. In the first technique, the liquidation or disposal of products or services that are not generating enough revenue occurs. In the second technique, inventory turnover is optimized through the introduction of novel sales and marketing initiatives.
Corporations must make sure that customer service and the overall employee experience are not negatively impacted by budgeting initiatives. Budgeting initiatives that decrease the employee experience or customer service capabilities may create short term cash flow but will decrease long term bottom line profitability.
Note-: Properly implemented budgeting techniques will increase cash flow and bottom line profits over the long term.
8. Existing Customer Retention
Long term business success and overall business growth are highly dependent on retaining existing customers. A significant mistake that businesses make is losing their existing customer base while trying to attract new customers.
New customers are crucial for small business growth but should not come at the expense of existing customers. Ultimately, an effective growth strategy will make sure to acquire new customers while retaining existing customers.
Remember-: Studies have concluded that customer retention rate increases have positive effects on company value.
9. Customer Referrals
With an outstanding existing customer base comes the potential to attract new customers through referrals. Unsurprisingly, it is much easier for a small business to attract new customers if they learn about a company through a source they trust.
Business owners should make sure to actively encourage referrals, perhaps through incentives like discounts. Social media is a fantastic platform for new customers to learn about a company, so social media reviews should be considered a top priority.
- When starting business operations owners should always consider long term growth goals.
- Business growth strategies range from new product diversification to social media customer referrals.