Growth Strategies for Small Businesses: How to Keep Moving Forward
Among the many potential growth strategies for small businesses, which ones make the most sense for yours? Experts and seasoned entrepreneurs agree that "remaining in place" is not a viable strategy for businesses. Some planned growth or expansion goals should always be in the works because in today's marketplace, "holding your own" (in terms of customers, market share, etc.) isn't enough to sustain a business. Growth should be at or near the top of every small business owner's list of priorities.
So what growth strategy is best to focus on? Here are several key strategies you can adapt to your specific circumstances:
Be crystal-clear on your value proposition. You may have had a compelling purpose when you first took on a business or engineered a successful startup, but when it comes to growth, you should reassess your company's value proposition. Do you know with absolute certainty why customers choose your products or services over your competitors? What unique benefits do you provide? What makes your offerings more credible than the competition? As long as you know the answers, your growth strategy may not need to deviate from what's been successful in the past.
Stick with established revenue streams. While there's no across-the-board consensus, many business experts contend that maintaining a laser focus on your core customers is the key to growth. Ask your loyal customers to refer others (and find a way to reward them for it) or fine-tune your marketing message to boost repeat business and increase sales.
Look into diversification. On the flip side, what about branching out into new areas of business? According to the National Federation of Independent Businesses, this strategy includes launching new products or services to an existing customer base or unveiling new products to a new target audience: "When there's a demand within your industry, fulfilling your clients' needs before they look elsewhere is key." Just be sure to conduct in-depth market research before making the plunge.
Hire the right people. Successful growth generally means you'll need more employees to handle customer demand. Where previously you might have been hiring as the need arose, attracting and recruiting the right kind of job candidate becomes an essential ingredient in your strategy. Cut costs in other areas if you have to, but be prepared to handsomely compensate a talented, qualified employee. These individuals "have direct contact with your customers, so you need to hire people who are motivated and inspired by your company's value proposition," notes business consultant Rob Biederman.
Explore partnership opportunities. We're not talking mergers and acquisitions here, but instead forming a mutually beneficial alliance with a complementary business that - if successful - can expand your customer base at a rapid pace. Look for a proven industry leader who's not yet addressed the niche audience you have, and explore opportunities to pool resources, build greater visibility and offer more to an established customer base. The key is being able to position your partnership idea (and the reputation of your business) in the most glowing terms possible. But don't promise more than you can deliver!
Be prepared to "fail on purpose." Admittedly, this is a riskier growth strategy than others mentioned above, but it does come with some compelling advantages. "What happens when you meet with failure?" asks eCommerce specialist William Johnson. It's a chance to pinpoint errors in your strategy, isolate shortcomings in development and execution, and learn to proactively manage risk. "As the business owner internalizes the lessons, the odds of success escalate when he embarks on his next venture," Johnson notes.
There are many avenues to growth, but most require a disciplined approach to strategy and follow-through. After looking closely at your competitive landscape, take action to move your business forward as the New Year rolls around.