When it comes to looking for small business growth strategies, statistics show that almost 20% have failed to thrive in their first years, and one third have survived past the 10-year mark.
Although this statistic is stark and provides a sober warning to small business owners, it is not hopeless. It’s true that for any small business owner, there will be considerable risks that come with running a profitable business, and understanding why growth is important is the first step towards success.
A growing business is a thriving business that builds a positive reputation. This allows a business to attract a diverse customer base, establish credibility, and enhance competitiveness with other businesses.
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Identifying the Need for a Growth Strategy
Recognising the signs that your business is ready for growth, such as consistent profits and steady customer demand, is vital. However, achieving the growth you desire requires a clear strategic plan that you can use to attract customers, build brand awareness, and develop greater levels of income, all while keeping an eye on your existing customers and existing products so that you don’t lose customers as you work hard to grow.
This is where a growth strategy plays a critical role in your business, setting the path for expansion and sustainability. Not sure if you are ready for business growth? Take a look at some of the signs that small business growth strategies would be beneficial to you right now:
Consistent and Increasing Revenue
If you are enjoying an increase in potential sales and your revenue is growing at a good rate, then this is a great sign that growth strategies are needed. Be careful not to jump in too far without clear evidence that your revenue is growing consistently month on month.
Capacity to Expand
Even when you want to grow, small businesses need to consider whether they have the capacity needed to take the next step in their growth journey. This means time, space, commitment, and a realistic understanding of what your small business can achieve.
You also need to consider whether your brand is established enough to move forward on growth. This means things such as your marketing efforts being noticed by new customers and being converted into revenue.
Whether it’s your existing customers or new customers that are telling you they are happy, it’s important to canvas your supporters and see if your target market is ready for your new growth strategies. Remember, if your customers aren’t on board, your small business growth may stall.
Data Supported Plans
No matter how many new customers you may think are using your business, never start implementing business growth plans until you have the data to support your ideas. This means looking at market trends and being aware of what’s happened to date so that you can carefully predict what may happen in the future.
If you are excited about things such as marketing initiatives, customer loyalty program options, and other tools that can help you implement your growth strategies, you should first consider if you have the cash flow to spend. Investing in growth strategies can be expensive, so work out your finances before you get started.
One of the hardest questions to ask yourself is whether your small business is scalable or not. There are many small businesses that work well but are best kept small, so take the time to think about your business and really question yourself on whether it has real potential for growth or not.
Support From Existing Employees
It’s easy to get lost in marketing initiatives and market development, but you also need to consider whether your existing employees have the skills and knowledge to support your growth strategies for small business. If not, you may need to start thinking about the skills you need to find in order to take the next growth steps.
Exploring Different Small Business Growth Strategies
Business growth doesn’t follow a one-size-fits-all approach that you can follow for success. The good news is that there are a range of different paths that your business can take to achieve growth. Here are a few examples:
The aim here is to increase your sales within your existing markets and your current customers. This could be achieved by enhancing your online marketing efforts to reach more of your current audience or by introducing customer loyalty schemes to encourage repeat business. It could also involve taking customer demands into account and developing new ways to create a positive customer experience each time someone decides to spend their money at your business.
This strategy involves venturing into new markets and finding new customers. It could mean targeting a different demographic group that your product or service might appeal to or opening new stores in different locations. The main aim of this growth strategy is that you can access potential customers by changing your marketing strategies rather than changing what you offer as a brand.
This strategy is about creating new products for your existing market and creating business growth by selling these new products to your existing customers. You might decide to expand your current product range or introduce a newer version of your existing product, offering more features or better quality. When it comes to product development, many small business owners look to their customer base for the customer demands that need to be filled as well as using market research to help think about new products.
This is a more adventurous strategy as it involves developing new products for new markets. It’s potentially risky but can be highly rewarding if executed correctly. To diversify, you will need to identify sales opportunities, listen to business news, and think about the best way to move forward with market development so that you interest potential customers and boost sales. At this point, it is also good to go back to your business plan and consider the ideas you had in the early stages of your business to see if there are any potential ideas that you can use to diversify.
This strategy involves buying other businesses, allowing you to fast-track your growth. However, an acquisition shouldn’t be entered into lightly as it can have a huge impact on your business. It is recommended that you use key strategies to complete comprehensive market research to understand the current market and the target audience. It is important to be realistic about whether you have the infrastructure, knowledge, and financial resources to successfully manage two or more businesses. Acquiring a new business to create new business growth can be initially financially draining before you see any profit. Making sure this doesn’t impact customer retention across your businesses will be essential as without retaining customers, it’s very difficult to grow.
Choosing the Right Growth Strategy for Your Business
The next step in your growth journey is to choose the right strategy for your business. This involves a few critical steps:
Firstly, assess your current business situation. You need to establish a comprehensive understanding of where your small business is currently in terms of growth. This step can also start to reveal areas where potential growth is a possibility and how this could start to develop a growth strategy.
Secondly, you must have a good understanding of your business environment. Market research, attending networking events, and gathering information on competitor businesses will help you to plan effective business growth strategies.
Thirdly, evaluate your business strengths and weaknesses. Tools like a SWOT analysis can help you understand your business’s strengths, weaknesses, opportunities, and threats. Other free tools for services online, such as website analytics, search engine optimisation, Google AdWords, can be used to understand whether your business online is effective.
Lastly, ensure that your business has the resources and capabilities to seize the growth opportunities you have identified. Marketing strategies will only be effective and increase sales if they are implemented with the correct resourcing. If you conduct business online, then your digital marketing plan may be cheaper, but you will still need to reach your target audience to convert potential sales into new customers.
Once you’ve developed the best small business growth strategy, how you implement your business marketing strategies is key to building brand awareness and increasing growth. If you aren’t sure where to start, take a look at these simple steps to get you started:
Having a clear plan that outlines the steps you need to take to achieve your growth objectives is the best way to start. Vague marketing tips are unlikely to result in an increase in your market share, retain customers, or attract customers. A growth strategy that sets out a transparent foundation to work from will provide you with a step by step guide as well as a way to determine if the plan is achieved successful results.
With your plan in place, you will then need to start thinking about the resources you need to use and where you find them. Ensure you have the necessary financial, human, and technological resources in place prior to implementing your business plan.
Every business needs to have key performance indicators to work towards. These help you to understand how well you are achieving success. Several free tools are available to assist with monitoring performance that will allow you to collect appropriate data and analytics.
Implementing the strategy involves regularly reviewing your strategy to ensure it’s working and making adjustments as needed. Every successful growing company must be willing to make changes in response to market needs. The current market can change quickly, and businesses that don’t have the ability to adapt will struggle to boost sales and may even lose customers.
Now that you are clear on the different small business growth strategies, take a moment to read some of our top tips for business growth strategies:
Happy customers are more likely to become repeat customers. It’s important to listen to your customers, understand their needs, and ensure they are satisfied with your existing products or services. Remember, it is easier and more cost-effective to retain customers than to attract new ones. You should always be clear on your target audience, especially if you want to expand into new markets or are planning to acquire local businesses.
These relationships can provide valuable support for your growth efforts. Good relationships with suppliers can lead to better deals, reliable supply chains, and the potential for exclusive products or discounts. With rising prices in many areas, it’s beneficial to have purchase histories and loyalty to suppliers to give your business the edge. Similarly, establishing partnerships with complementary businesses can help you reach a larger audience, achieve better market penetration, and establish credibility.
Your employees are one of your most valuable assets. Skilled, knowledgeable, and motivated employees can drive your business growth, so it’s worth investing in their training and development. Investing in your workforce not only helps to improve their performance and increase their job satisfaction, it also demonstrates that you practice corporate social responsibility and will likely increase your brand awareness as happy staff share their experience.
In the digital age, technology can be a game-changer for small businesses. Embrace digital tools and platforms that can help streamline your operations, improve your customer service, and enhance your market presence. This could include everything from accounting software to digital marketing tools and e-commerce platforms. Social media apps, finding alternative channels to the usual social media sites, and optimising search results are all ways of using technology to your advantage. Any online presence needs to be optimized for mobile devices and search engine results pages as this will allow your business to attract more customers.
The business world is constantly changing, and if you want to increase your market share, it is important to keep up to date with innovation and developments in your field. This could mean updating your products or services, trying new marketing techniques, or adopting new technologies. Market segmentation is beneficial when it comes to being innovative as existing customers may require something different than new or potential customers. Finding alternative channels or utilising social media more frequently can help you to reach a wider audience. Continual innovation can help you stay competitive and keep your business growing.
It is often helpful to focus on your existing customers at the start of your strategy, instead of seeking to attract more customers. Customer retention will provide you with stable sales and a solid foundation on which you can start to expand your marketing to attract new customers. Market segmentation is particularly important in your marketing strategy to ensure that existing customers are not forgotten about or overlooked. This doesn’t mean simply doing the same thing again, as existing customers might need a different approach to keep them interested.
Case Studies: Examples of Successfully Growing a Small Business
Let’s look at some small business strategy examples of successful growth:
|BrewDog||Starting as a small brewery in Scotland in 2007, BrewDog implemented a market expansion strategy that targeted new geographical markets beyond the UK. They also utilised social media and a unique form of crowdfunding, “Equity for Punks,” that allowed consumers to buy shares in the company. This innovative approach has turned BrewDog into a global brand.|
|Etsy||Etsy began as a small online marketplace for handmade and vintage goods. Through effective product development and market penetration strategies, it grew its user base and brand awareness. Now, it’s a global e-commerce platform with millions of buyers and sellers.|
|The Cambridge Satchel Company||This UK-based bag manufacturer leveraged the power of social media for market penetration, growing its brand recognition significantly. Collaborations with high-profile fashion entities further boosted their market presence, demonstrating a successful application of partnership as a growth strategy.|