If you own a small business and are looking to expand your operations, you must have a business plan that you can work on to achieve your goal. Although the majority of small firms have programs that can increase their sales and revenues, there are certain things a business must do if it wants to implement its growth strategy.
According to a survey, approximately half of the start-ups close their premises within five years of their operation, and only one third make it to ten years. You need to expand your business if you want to remain competitive in the market.
Having an established growth strategy is not just for marketing purposes, but it is crucial for your company’s position. It involves the long-term success of your business and ensures loyal customers that you have a growth strategy to implement.
The method that a business utilizes for implementing growth strategy relies on the financial situation of the firm, the local competition it faces, and the government regulations imposed on the company. Here are some of the growth strategies that you can use to expand your business operations.
1. Add New Products
Although it may sound quite simple in reality, it is challenging to pull off successfully. You need to conduct a survey to analyze what products are in demand and how much are the customers willing to pay for these products and services.
Research saves you from financial losses, which you may incur later if your product fails to capturer fair market share to be profitable for the business. You can then determine whether you have the resources available to produce these products at a price that customers are willing to pay and can generate profits for your business.
You can conduct surveys to consult your existing customers and ask about their experience and what they believe about your new products and service ideas. This will help you to get familiar with the current market scenario and how you can use it to your advantage.
2. Sell More Products
This strategy is similar to the one mentioned above since you need to attract a loyal customer base to sell more products. You need to complete a market segmentation analysis to identify the customers that are mostly the most significant percentage of your customer base.
After doing the above step, you can direct your marketing and sales effort to capture the attention of that customer segment which helps you sell more products to the same customers.
Doing so not only increases your revenue but develops your brand’s value. By directing your efforts to a particular segment, not only does it increase the profitability of your business, but also ensures customer loyalty and spreads good reviews about your business through positive word of mouth.
3. Expand To Other Territories
The main summary of this strategy is to sell your existing products to new customers. These customers can not only belong to different segments but can have different niches and operate from various locations — local or abroad.
Conduct adequate market research before you decide to implement your strategy since it requires a considerable amount of time and money for operating the new premises. For example, if you own a retail business, you will likely open new premises in different locations across the city.
Expansion requires investment so you’ll need funds. There are many types of business loans and articles on how they compare, including the difference between a term loan and a business line of credit.
A layperson’s explanation of the two types of loans is, a term loan incurs a lower interest rate, than a line of credit, however, it applies to the entire loan amount as soon as the funds are yours to use. Whereas with a line of credit, the business only pays interest on the amount drawdown and when the funds have been returned to the line of credit account again, interest is no longer incurred.
For example, if you have a line of credit of $100,000 and you take out $60,000 to open a new office. You’ll incur interest on the $60,000 until you pay it back to your line of credit.
4. Target New Markets
Some businesses direct their marketing efforts to one particular market segment to generate revenues. Majority of companies fail to realize their full potential and overlook some of the market segments that can become a part of their market share. You can develop products that are useful for the majority of segments and have the potential to boost your revenue. You need to advertise your existing products to such markets who are not aware of the features of your products.
5. Attract New Sales And Delivery Channels
External factors also play a role in the success of the business, which is comparable to the part of internal factors. Your delivery partners maintain the image of your company by delivering your products on time, to avoid issues.
For example, if you are an employee of Pepsi and you decide to run a marketing campaign to boost your sales, and people complain that the distributors do not deliver the product on time, this may lead to discontent among your customers. This scenario proves that no matter how much you advertise your products, they need to be available in the market for people to buy them.
6. Acquire New Businesses
Perhaps the quickest way to expand your business is by acquiring existing businesses since you can double the size of your business and increase your profits significantly. Before purchasing a business, you need to ensure that both companies can work together rather than performing as separate identities.
Although you may need to pay attention to the financial position of the acquired company, and the management style, if you feel that the business will flourish due to the merging of the two firms you will be able to expand your business significantly.
Expanding your business without a plan is risky and can become very difficult. Always plan ahead to make sure that you succeed in whatever you do. Do as much research as possible so you know what your customers expect from your business. The increase in sales will also drive expansion.