Small Business: Grow your business

Growth in a company is essential. How much growth depends on your vision for your business….

Many entrepreneurs often confuse growth with expansion. The expansion moves into new product lines, new services and new areas. Growth increases your ability to continue with the products and services you have. Growth may require expansion, but expansion is not necessarily required for growth.

At the very least, growth is necessary to ensure your business maintains a healthy profit margin. Expenditure usually increases every year and therefore your business needs to grow or it will “fade away”.

This is why it is so important to have a business plan and regularly review your company’s performance! Understanding the company’s financial record and the development of the target markets is of the utmost importance for continued business success and growth.

Be honest to yourself…

Sometimes, they themselves are the biggest obstacle a small business owner can face. Far too often, as entrepreneurs, we succumb to our own success and ignore the indicators of change in our market. A smart business owner ensures they can independently evaluate their business – a business mentor is great for this type of oversight.

Be brutal in your assessment – really extrapolate the possible changes in your market and determine how to refine your business strategies to take advantage of the changes.

In one of my “past business lives” I ran a franchised retail store. We were a very niche company and when we opened the first stores we did really well. However, as the market evolved it became more of a consumer market (rather than a niche) and our franchise did not change strategies to reflect this. This franchise no longer exists – it has been placed under receivership.

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growth strategies

There are several growth strategies that can be employed by a business owner.

Sell ​​more of the same

This is possibly one of the most popular strategies for business growth – do more of what you’re already doing.

This could be a valid approach, especially if the company or market is relatively young.

One of the most important things to consider here is whether there is “room” to do more of the same. If your business is providing services, can your existing staff handle more work, and if not, can more staff be hired quickly enough to get the job done?

Is your market growing enough to sell more of these? Sometimes the market is almost saturated and selling more of the same thing won’t grow a business enough.

Consider entering other target markets with the same product or service. Often this requires a rethink of the unique selling proposition, but it can bear great fruit.

If the business doesn’t have enough manpower to sell more, consider options like licensing and franchising to increase reach. A very simple method to instantly add more salespeople to the company is to offer an affiliate or referral program where the company pays a commission or referral fee to people who bring in new business.

increase prices

Increasing the prices of your products and services can lead to growth. This approach must be carefully implemented and the results monitored regularly.

Price increases generally result in higher profit per sale – and therefore higher overall profit.

In some cases, a price increase also leads to an increase in sales. This usually occurs when the price of a product or service is so low that it gives the impression of poor value/quality or appeals to a target market that is unwilling to spend money. If the price is increased, the target audience will feel that the quality is much better and will invest more willingly. By raising the price and increasing sales, growth occurs naturally.

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That’s exactly what I experienced in my retail store – we had a product priced under $10, which we thought was an “irresistible price.” Unfortunately our customers did not and the product did not move. After overhearing several customers that they felt there was something wrong with the product for being so cheap, we raised the price to $14.95 and sold out in a week! perceived value.

diversify

Diversification is a valid and very smart business growth strategy. Add more products or services to your business portfolio.

Depending on your business plan, the products or services may be related to your existing range of products or it may be appropriate to create a new “arm” for your business.

Diversification as a business growth strategy offers a major advantage as it spreads the risk of market downturns on a broader basis.

By adding more related products and services to its portfolio, a company can also capitalize on return business from existing customers.

Finally

These are three very broad ways to grow your business – and which one you should use depends on your business plan.

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