A business growth strategy is simply the technique an entrepreneur adopts to take their business from one level to a higher one. Every small business owner operates on different levels.
This means that there will be different aspirations and aims at a particular time. Thus, the term “business growth” means different things to different businesses based on what stage they are currently on and the practicable strategy they adopt.
For instance, a particular business may aspire to see an increase in sales and revenue as a major goal, while another is determined on launching out in a new territory.
Therefore, a business must know the current stage they are operating on (if it’s still a startup, already established and generating revenue, etc), and then put in place certain structures to measure progress.
What growth strategies are suitable for a small business?
It is not new knowledge that many small businesses fail in their first five years of establishment. Specifically, data analysis by Lending Tree says 18.4 per cent of private sector businesses fail in their year in the United States.
If they survive the first year, they are most likely to close shops within five years because they might be among the 49.7% that fail while 65.5 per cent failed after 10 years.
To avoid business collapse within the aforementioned timeframe and become stronger, an entrepreneur needs to create a plan of action to grow a small business to a bigger one.
If you are dogged about building your business from the ground up and overcoming the challenges young businesses face, here are business growth strategies you can adopt as you have a huge goal in the years ahead.
Market Penetration
You can be very strategic with your engagements in your industry and employ strategic actions to increase your market share. This is possible as you pull new customers and retain the existing customers to patronize your products and services.
This strategy includes:
- Intentionally charging lower prices compared to your competitors
- Getting new customers via discounts
- Granting your existing customers bulk discounts
Marketing New Products
In a move for market expansion and building on the existing trust of your existing products, you can launch a new product to make another inroad into the market through another product.
The aim of this, just like the first, is to get a larger share of customers than your competitors. So, you can get busy working on making varieties of your existing product or even updating an existing product. Customers love great things!
Market Expansion
Unlike the first two, market development or expansion has to do with selling existing products and services in a brand-new market. This is particularly relevant for a small business that is still struggling in its current market.
Market Segmentation
This entails being strategic enough to divide a market into different segments. The aim is to identify and focus on a sector within your current market that your competitors haven’t successfully reached.
Alternative Channels
You can utilize newer platforms to sell more products and reach more people with your services. This is very easy in this digital age. For instance, you can sell your product using alternative channels like:
- Social media marketing like Facebook Ads, Twitter Ads, LinkedIn Ads
- Setting up a shop on Amazon and Etsy
- Utilizing Ad networks like Adsense
Closely related to this strategy is exploring online marketing. This is because advertisement is key to business growth, and employing effective and efficient methods can be a game changer, hence, online marketing.
You can experience unprecedented growth by utilizing the internet to advertise your products and services. Considering the fact that there are millions of people online right now, you can introduce your business to them with great ease, without breaking the bank.
Therefore, ensure you have a good and functional business website as well as an active presence on relevant social media platforms. By doing these, you will be amazed at the level of growth your business would record.
Mutual Benefit Partnerships
You can utilize partnerships as an effective business growth strategy to get to another level entirely. You can enter into a partnership with another business for mutual benefits and gains.
Interestingly, two good heads are usually better than one. It is, therefore, necessary to be meticulous about the business you will be a partner with – ensure the other business isn’t a competitor.
Diversification
This is a technique where you sell new products and services in new markets. It should however be noted that you should be very careful before taking a step along this line. This is because you must first assemble a reasonable number of resources to get this implemented with good results.
Business Acquisition
One of the business growth strategies is acquisition and the world has witnessed one business bring another into its fold as a strategic growth goal.
One of the most recent acquisition post pandemics is the acquisition of Slack by Salesforce for a tune of $27.7 billion in July 2021.
Some of the biggest acquisitions in history include:
1) Acquisition of Australian national mining BHP Group plc by BHP Group Limited to the tune of $86.2 billion USD in 2021
2) Acquisition of American cloud computing company VMware by Broadcom Inc. worth $61.0 Billion US Dollar in 2022
3) Acquisition of London-based information service provider IHS Markit by an American company S&P Global in 2022 for $44.0 billion USD
4) And of recent, the controversial acquisition of Twitter, Inc. by the world’s wealthiest man Elon Musk for $44.0 USD in 2022 etc
Most times, a company acquires another or merges with another promising company in a strategic move to penetrate a new geographical location, says DealRoom
It’s either a business buys another one (acquisition) or two different ones decide to merge as one (merger). Obviously, for this growth strategy to be employed, you must have gone past a certain level and must be strategic.
A smaller business can merge with a bigger one (known as upstream acquisition), or two companies of the same size form a bigger force (known as lateral acquisition). Know the stage you are in and know your worth.
Price Review
This is a very important business growth strategy that entails being intentional with your business costs – keeping them as low as possible. The beauty of this is that you will have more funds at your disposal which can be utilized to engage other things that will bring about growth.
You can get started by reducing traditional marketing methods as much as possible and focusing on the cheaper internet.
It is however important to note that you shouldn’t cut down costs at the expense of quality.
Building Loyal Customers Base
In a fierce market, it is usually tough to get customers and clients. Therefore, when you eventually get them, you should do all it takes not to lose them to your competitor. Rather, you have to make them keep coming back again and again.
If you can gain the trust and loyalty of your customers, things become easy to a reasonable level. Loyal customers will not only come back, but they will also make referrals.
If as small business owners, you are able to have five lines of customers who make referrals, that’s an incredible way to build a formidable customer base.
A lot of smart businesses today are now trying to develop a community bond with their customers, to make the customers part of the process (making them feel involved, which promotes relevance).
There are important steps you can take to make this a possibility. You can reach out to them via personalized emails, show customer appreciation with loyalty discounts, track their birthdays and send them special birthday messages.
Conclusion
While there are data to show the number of small businesses that have failed in the past years, exploring the business growth strategies outlined in this post should be implemented tactically to penetrate and avoid debt as much as possible.
In August 2022, one of the biggest financial institutions in Nigeria, Fidelity Bank Plc made public its readiness to acquire Union Bank UK, as part of its expansion plans. This is geographical expansion.
Finally, remember that every business is unique. You should be very aware of your own uniqueness and strength when implementing business growth plans.