So, you started a business, you’ve landed yourself a few customers, and things are going well. It’s such a great feeling. Eventually, you will want to grow your business and get more customers and more revenue.
Growing your small business is an exciting, crucial part of your journey as an entrepreneur. In this article, you will learn the answer to the question “how to grow my small business” with proven, effective strategies.
What Is a Business Growth Strategy?
Statistics show that around half of businesses fail within the first five years of opening. The next statistic is just as sobering, as only a third survive past the ten-year mark. This doesn’t mean you are helpless, however. While owning a business is always risky, it is riskier if you do not apply small business growth strategies.
A growth strategy is a plan you create and execute for the growth of your small business. It is the set of actions that will carry you through the different stages of your business. How you create this plan depends on the goals you have for your business.
Because growth means something different to each business owner, you will need to consider what it means to you before creating the plan. Consider types of business growth, such as whether you want more sales, more revenue, a larger customer base, or another location.
5 Stages of Small Business Growth
Growth depends on the stage your business is in and where you want to take it. Growing a business that just opened requires different strategies than growing a business that already has an established customer base.
1. Seed and Development
This is the initial stage of starting a new business. In this stage, you are exploring and fine-tuning marketing and sales strategies. Entrepreneurs do a lot of market research in this stage of business and ask lots of questions to determine what their target market needs. “Growing a small business” tips will tell you to determine what your business idea looks like. Is it solid enough to get customers to come in? This stage generally occurs even before the business opens.
2. Startup
Once you’re open for business, you are in the startup stage. You are getting new customers and encountering new issues. This is when you get the hang of day-to-day operations. This part of small business growth is all about adapting and surviving. You need to get your business processes down and adjust them as you go. Once your business becomes more stable, it enters the next phase.
3. Establishment
In this stage of development, you are steadily growing a customer base and generating stable income. Some businesses may be fighting to break even. The focus in this stage is often to make improvements to your bottom line fast. This may be through cost reduction, increased productivity, more equipment, or more employees. Create your plan around whichever you think is going to work to get your business improved.
4. Expansion
When a business reaches this stage, it is profitable, stable, and becoming established in its field. This isn’t the time to relax, however. It is the stage when owners may explore new adventures and small business growth strategies. This may mean staking a larger share of the market, pursuing partnerships, franchising, or even product development. Your goal during this stage of growth should be expansion without the overuse of your resources.
5. Maturity
At the maturity stage, your business is bringing in yearly profits. This is when some business owners sell their business or sign it over to a new CEO. Others go back to the previous stage and expand their business another time.
4 Tips for Growing a Small Business
Before implementing marketing strategies for small businesses, you will need to plan them carefully. As you plan your growth strategy, keep the following considerations in mind.
1. Set Your Goals
You need to have defined objectives or goals before you can follow any other “growing a small business” tips. Create just a few key goals so you don’t get overwhelmed. Set defined timeframes and review your efforts at the end of the period. Make these goals quantifiable.
If you want to grow, define what percentage you want your sales to increase by. Perhaps you make $30,000 a year and want it to increase by 10%.
2. Define What “Growth” Means to You
Using the previous example, growth would mean earning a yearly profit of $33,000. Aside from financial goals, you can also consider metrics such as customers served or customer engagement. You can even set goals for more employees or better employee packages. The goal you choose will depend on your business stage and current needs.
3. Do Your Research
Take the time to research critical information. You want to define your business’s unique value. Which assets or qualities set you apart? You won’t know if you don’t research your competition and existing market.
4. Define Your Ideal Customer
One important thing you should do before pursuing small business growth strategies is define your ideal customer. Who is your product or service tailored to? You can look at current customers or customers of businesses that are similar to yours. Consider niches you may have missed and perform thorough research into who your client will be.
What interests do they have? What problems need to be solved? What budget are they working with? This information will give you the details you need to define your ideal customer.
Remember that your ideal customer or target audience may change over time, especially between the initial planning stages and when you start actually running the business.
7 Small Business Growth Strategies
With a better idea of what business growth is and general tips for growing your business, it is time to look at specific strategies that you can use in your business growth plan.
1. Market Penetration
With this strategy, you aim to sell more of your products to your current market. This is one of the lower-risk small business strategy examples. One way to accomplish this is to have competitive prices. You can also attract new customers with discounts and special offers. Bulk discounts can also encourage more sales. You can also increase the number of dealers and distributors your business uses.
2. Product Expansion
One of the most common small business growth strategies, product expansion involves the creation of new services or goods to market to your current audience. This is an attempt to capture more of the market. Some examples of product expansion include:
- Bundling services into new tiers and packages
- Introducing new products
- Updating clients about products changing features
- Adding new varieties to existing products.
3. Remove Unprofitable Services and Products
On the opposite side of expanding your products, you should also strategically remove products and services that aren’t generating a profit. Analyze the revenues and costs of each of your products to figure out what isn’t profitable.
You don’t need to automatically discontinue products that don’t turn a profit. You can reevaluate them to see if you can reduce costs. It may also be worth it if it is a minor loss and leads to people buying products with high profit margins, but that should always be carefully considered.
4. Market Segmentation
This method of exploring “how to grow my small business” refers to the practice of identifying smaller groups within your target market. These groups share similar qualities, such as demographics, buying behavior, geography, or needs.
When you’re a smaller business in competition with larger ones, market segmentation can help you identify which vectors your competition hasn’t explored. That way, you don’t have to compete with the resources of large businesses.
5. Partnerships
A strategic partnership can be any partnership your business needs. This can be another company tagging you in a social media post or sharing your blog. Or it can be something larger like collaborating on a product. These strategic partnerships help get your business in front of other potential customers.
Look to other brands for ideas and then think of companies you have interacted with. You can team up with similar companies to promote services and goods to the benefit of both businesses. Or consider partnering with your distributors or suppliers.
The ideal business partner isn’t a direct competitor. They will be somehow relevant to your business and have similar brand values and culture. As you choose a partner, don’t forget to consider their reputation and market reach.
6. Diversification
When you use diversification as part of your growth strategy, you are introducing new services or goods to new markets. This brings higher levels of risk compared to other types of business growth but it has the potential for high returns.
There are different types of diversification, including the following:
- With horizontal diversification, you make a new product for your current clients.
- Concentric diversification is when you offer a new service or product that is a spin-off of an existing, successful product.
- Conglomerate diversification is when new services or goods are offered to new audiences.
- With vertical diversification, you start marketing to your competitors and competing with your suppliers.
7. Create a Sales Funnel
A sales funnel will help you increase sales, making it one of the crucial marketing strategies for small businesses. You should use a codified sales funnel when doing so. With the steps delineated, you can see more clearly where a customer dropped off before they bought a service or product. Once you remove potential obstacles between customers and sales, you can achieve business growth more easily.
Growth Solutions for Small Businesses
The most effective way to grow your small business is to focus on a few marketing strategies that meet your goals. As you look at small business strategy examples, you will notice that business growth often includes driving customers to increase revenue. Here are a few growth tactics that every small business should consider.
Text Marketing
Reaching out to leads and customers through text marketing is an important way to grow your business. It doesn’t need to be done on your own, however. There are companies that can help you design and send one text that drives thousands in revenue. You can also use these professional companies to find texting templates to help you take the guesswork out of the texts you send.
Customer Reviews
Reviews are a driving force of growth for small businesses. The vast majority of shoppers read reviews before buying a new product or trying a service. On top of that, most people view reviews the same as a personal recommendation, making them a strong influence on your ability to attract customers. Simply put, more reviews mean more business for you.
Solutions like Podium can help you generate more reviews with ease, letting you see the positive effects they bring. A Google Review link generator, for example, makes it easy for customers to leave a review.
Webchat
With Podium’s Webchat, you can easily turn your website visitors into leads and convert them into satisfied customers. Webchat lets you make your website a conversation starter. Use Podium to see Webchat in action on your site and see how it helps you generate leads and grow your business.
Ready to grow? Give Podium a try for free today.
