Every small business needs a growth strategy to take them from being a small business to becoming a big business. It is important to review your business and then see in what ways you can grow. It is also important to move quickly on a growth strategy as the variables which you choose for a certain growth strategy can change.
Before we look at the various growth strategy options, we need to define what a growth strategy is. A growth strategy is, simply, a plan of how you get from where you are today to where you want to be in the future. It may seem similar to a business plan but this plan is only for you and only focuses on how you will grow. Some of the questions you will consider when coming up with your growth strategy are:
- Where will you get new customers from?
- How will you expand into new markets?
- What new products could you offer?
The answers to these questions will affect the growth strategy which you choose. Here are seven growth strategies to consider:
This is the first growth strategy that most small business look to first. In this strategy we look at the current product and the current market and how we can increase our market share. It is a very competitive strategy as you going head to head with your competition. One way you can increase your market share is by lowering your selling price. The second option is to offer promotions. You can offer trade and sales discounts. This will not only attract current customers but it may encourage new customers to try your product.
By looking at the different uses for your product or service you could find that there are other markets which you should target. If you sell a health soap and are mainly focused on the healthy lifestyle industry you could also look to breaking into the beauty market. You could also think about selling your product overseas.
What other channels could you use to sell your product? Maybe you are selling your product only online but you could open up a pop-up shop to sell your products. You could think of a subscription or membership programme to expose and find new clients. With everything going mobile, you could create a mobile app to sell your products on.
In this strategy, a new product is developed to sell to an existing marketing. It is usual used in markets where the technological development is quick like in electronics and cell phones. For a small business you could use product expansion by adding a new product to your product line, or you could add a new feature to an existing product or you could change a feature of a product which has become obsolete.
Diversification is used by small business to enter a new market with a new product. This strategy is seen as a high risk, high returns strategy. The reason for this is that you will need to develop the product and marketing strategy for the new product from scratch. You can do diversification in two ways. You could start a whole new product which is completely unrelated to what you are currently doing or you could look at a product which is different to what you do but still services the same market which you are involved in.
Many big businesses have used this method to buy up the competition or to buy up companies which have the technology they need for their business. A small business may shy away from this but if you have the capital and can purchase a company which can add benefits to your company then you should consider it.
You may be part of a market and struggling to find your place. This is when you need to divide the market in to smaller segments and focus on a specific market. You need to appeal to that specific market and stake your claim in that part of the market. Red Bull did it when it focused on extreme sports and people who enjoy danger to advertise its brand to extraordinary sportsmen.
If you look at these strategies and choose the one which is beneficial for growth in your small business. You could be the next Rockefeller in the making.
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