9 Ways to Grow Your Small Business
Small business growth is not only an ongoing process but a benchmark that shows the company has reached a level of stability that allows them to venture into additional income sources.
Owners and management must carefully evaluate their target market, inventory, and finances to determine the most impactful expansion strategy for their specific objectives.
9 Ways to Grow a Small Business
While companies spend the first couple of years focusing on making ends meet, small businesses eventually gain stability and begin shifting their focus on expansion. Small business growth is different from ordinary expansion, as they still have to finetune their strategies.
Excite Existing Customers
Most companies emphasize acquiring new customers to expand clientele, sales, and profits. While this is undoubtedly important for expansion, customer acquisition is expensive and time-consuming.
Small businesses should first focus on customer retention and exciting previous buyers who are still on the fence about committing their loyalty. Customers that have purchased an item from a company are likely to make repeat purchases, as they have already taken the first step.
Therefore, small businesses should collect customer information from each transaction to generate engaging, personalized content to turn shoppers into loyal patrons.
Ask for Referrals
Shoppers are more likely to trust consumer-generated content than marketing promotions because they are honest and unbiased. In fact, many consumers will research product and brand reviews before making a purchase decision.
Many small businesses use this thought process to acquire new customers through referrals. A referral is when customers tell their friends and family to visit a business because of their positive experience. This word-of-mouth marketing often proves more effective than generic promotions, as newcomers already have a personal connection to the company.
Customer referrals also take the work out of reaching the target market, as the friends of loyal shoppers are usually also within the same segment.
Minimize Operational Costs
Expanding the customer base does nothing for the bottom line if operational expenses are increasing as well. Managers need to monitor the costs of acquiring new customers and the average return on investment (ROI). By minimizing costs, small businesses can free up cash flow and extend their gross profit.
In order to cut costs, many companies
- Liquidate low-profit items.
- Cut low-performing services.
- Boost inventory turnover.
However, businesses should not cut expenses to the point that their service quality suffers, or else the cost reduction will have the opposite effect as customers will leave.
Expand the Market Reach
There is more than one way for businesses to expand their market reach. It is up to the owner to determine which option aligns with their model, finances, and other expansion ventures.
- Small businesses can open stores in new locations, both physical and virtual. By establishing a foothold in a new marketplace or region, companies can discover potential market segments.
- Companies can invest in discovering new demographics that are within or similar to their target market. Once the audience is defined, marketers can create customized content on their preferred sales channels.
- Organizations with a highly functional product range can encourage new uses for their items.
Get Involved in Trade Shows
Getting involved in trade shows is an excellent way to draw attention from local consumers and establish the business as a market leader.
Trade shows attract like-minded consumers interested in similar products and services, making it easy to develop an impactful promotion. These events also give company representatives a chance to have face-to-face interactions with shoppers from their target market, giving them first-person insight into their buying behaviors.
Businesses can also gauge their competitors and create new contacts that could potentially join their network.
Discover Niche Markets
Small businesses that don't have the funds necessary to penetrate new markets or develop new products can direct their focus on niche audiences. By discovering niche markets, companies can dominate small segments and expand their loyal customer base.
To target a niche group of customers, businesses need to locate a subset of their current market whose needs are not met. This gap creates an opportunity for companies to become the forerunner of a potential new market.
Diversify the Product Range
Eventually, small businesses will need to expand their product range to include variances, multiple options of the same item, and even goods that appeal to an entirely new market. While this may seem overwhelming, companies should begin by
- Extending the functionality of products that already have a stable customer base.
- Focusing on unique markets that have similar needs of current customers.
Generate Franchise Opportunities
Small businesses that offer unique, repeatable services may be able to franchise to streamline expansion.
In order to create a franchise, companies need to patent and pitch their model, processes, and branding to franchisees.
If interested, the franchisees sell the goods and services at their own locations under the original business's name. This allows the organization to expand its customer reach and brand awareness while using another company's resources.
Consider All Growth Strategies
There are many growth strategies that small businesses should consider before choosing the one that is right for their model. However, it is important to stay open-minded as the strategy that works best for the company may not be the one that the owner had in mind.
Businesses need to look at their customer base, model, finances, and inventory type to determine which method is right for them. After picking a couple of strategies, managers can set benchmarks, timelines, and budgets to test the effectiveness.