As business owners, dedicating time to develop effective growth strategies for our businesses is now more crucial than ever. According to Investopedia, a staggering 20% of SME businesses fail within their first year. If you are already running a business with a steady customer base, congratulations are in order. Achieving this milestone requires substantial effort and unwavering perseverance.
Focus Your Mind on Growth
The initial step is to shift your focus towards expanding your business, adopting this growth mindset is key to success and driving forward when things get tough, and they will. This entails the development of a robust business growth strategy. Only then can you ensure your company attains its objectives, ultimately bolstering your bottom line.
There’s no one-size-fits-all approach to business growth, so it’s essential to carefully assess the available options. To help you determine the best course of action, here are four proven business growth strategies that have boosted sales and revenue for many businesses.
Enhance Market Penetration
This strategy involves marketing your existing products or services to the same markets with the aim of luring customers away from competitors or encouraging existing customers to buy more frequently. You can achieve this by:
- Exploring innovative advertising methods
- Bundling products into attractive packages
- Implementing a customer loyalty program
- Offering bulk discounts or temporary price reductions (be cautious not to keep prices too low for an extended period, as it may impact profitability)
- Extending or modifying your business hours
- Streamlining order processing times
If your current market is saturated or local customer acquisition is challenging, consider expanding to new geographic locations or targeting different customer segments. Before pursuing this strategy, thoroughly research your existing market share and demand. Tools like Google Keyword Planner can help identify service demand in various markets. Leveraging online channels for market expansion can be cost-effective.
New Product Development
Launching new products or services within your existing markets can spur growth, albeit at a potential cost for research and development. Seek funding options or explore acquisition opportunities to introduce new offerings. Many businesses leverage the internet to enhance or extend their existing products or services.
Diversification involves introducing entirely new products or services to unexplored markets. It’s the riskiest growth strategy and is often best suited for established companies. Before pursuing diversification, assess if your current business possesses the necessary skills and knowledge for entering new markets. Diversification can be categorized as:
- Horizontal diversification (targeting existing customer segments with new products)
- Vertical diversification (expanding into supply chain or customer sectors)
- Concentric diversification (developing new products or services with similarities to current offerings)
Business owners who fail to create well-structured growth strategies or neglect regular strategy review and adaptation are unlikely to sustain long-term success. The choice of the right growth strategy hinges on your approach to products, markets, and your risk appetite. Seeking guidance from a business growth consultancy can be beneficial, and you may even decide to implement multiple strategies depending on your business’s stage of development.