Creating a growth strategy for small businesses

Companies of all sizes encounter obstacles that hinder their progress. A business may have a fantastic product or service but no business growth strategy to help it define, express, and communicate its direction.

A growth plan begins with finding and capturing market opportunities. The strategy discusses how your business will evolve to meet today’s and future difficulties. A growth strategy offers your firm a sense of purpose and answers questions about your long-term goals.

Unfortunately, many start-ups and small businesses fail because they do not take this critical step. Without it, a new business may stagnate much sooner than intended; this stage may even kill the business, but it is possible to swiftly turn things around by employing the right business growth strategies. We discuss the 6 strategies to help create a growth strategy for your business.

Penetrate the market

The point of market penetration is to increase a product’s market share or to successfully promote a new product. Advertising, combining products into appealing, saleable bundles, offering discounts on larger purchases, and lowering prices to compete are all effective techniques.

While it may be undesirable, cutting prices can be an effective short-term expansion strategy for your business if you offer identical products to those sold by your competitors. Adopting this market penetration strategy can assist businesses with somewhat generic items, for example, cleaning supplies or stationary. 

If you are unable to expand or develop your product range and need to keep promoting existing products, you might need to make those products appealing by combining them with complimentary products in a package or offering bulk buy discounts.

Market development strategy

The point of market penetration is to increase a product’s market share or to successfully promote a new product. Advertising, combining products into appealing, saleable bundles, offering discounts on larger purchases, and lowering prices to compete are all effective techniques.

A market development strategy refers to promoting current products or services to new clients or launching them in a new region. It’s possible that your regular market is overcrowded, or you’re having difficulty attracting new customers or clients in your local area.

Sales and profitability are likely to deteriorate unless a company seeks new markets for its products. Bigger businesses like Nike successfully expand into worldwide markets using creative and unique marketing campaigns.

Budgets for small firms may not be comparable, but it is feasible to discover new uses for existing products or to expand into similar markets. For example, a restaurant owner may try private catering or B2B marketing to get well-packaged products into local grocery stores.

Use different marketing channels

One of the most effective ways to expand a business is to use different marketing channels. Many small businesses already utilise more than one digital marketing platform, but switching platforms can yield better results.

Email marketing, social media marketing, and having a website are the top three marketing channels. According to research from Clutch.co, 54% of small businesses use email marketing, 48% use social media marketing and 64% have their own website. Having a website is quite important because customers expect to find valuable information regarding the business on its website. 

For small businesses that aren’t already online, it is worthwhile to launch a new website to develop national or international reach. Recent trends demonstrate that having an online and offline presence provides the best growth. 

Small businesses with great products tend to benefit from using different marketing channels. Google Ads, email marketing, Facebook and remarketing are the five most often used marketing channels. 

Expanding your product range

To appeal to their existing audiences, small firms might greatly profit from expanding their product ranges or adding new features. You may be suffering a drop in sales or profits as a result of old technology or products. If this is the case, it may be time to broaden your product range. 

When your product sales begin to fall, it’s important to fade out older models and provide newer ones to your loyal clients as a preliminary step. Any company whose products are no longer meeting expectations can profit from product or service expansion, but keep in mind that pre-expansion research is critical to avoid failure.

Divide your market into groups

Market segmentation is another small business growth strategy. This divides your market into several groups (segments) based on customer preferences, interests, locations, and other factors. These segments enable you to design targeted campaigns based on specific criteria, increasing the campaigns’ chances of success significantly. 

Common segments include:

  • Demographic
  • Geographic
  • Firmographic
  • Psychographic
  • Behavioural

Businesses that use segmentation include cosmetics providers, banks, fashion companies, and media outlets. If your product or service offering is diverse, then market segmentation will undoubtedly help you. It is important to note that significant research will be required in order to successfully profile your customers and personalise content properly. Capturing information via email surveys, transaction histories, and site analytics is a smart place to start.

Some marketing managers may find data-driven market segmentation complicated, so having a customer relationship management (CRM) tool can help improve segmentation quickly and easily.

Form partnerships

Sometimes collaborating with another company is the most practical way to expand your small business. You could do this through mergers, acquisitions, or collaborations with other companies. As long as the partnership provides significant benefits to all sides, it can be a great win-win situation that significantly increases resources.

Depending on the nature of your business, additional resources such as labour, skills, expertise, equipment, and technology may be available. Workloads and commercial threats may potentially be reduced. Partnerships are ideal for sole traders who can exchange customers and work together to execute complex projects. Carpenters, builders, plumbers and electricians can form partnerships and help each other within the construction industry. 

You can acquire rapid access to new consumer bases and marketplaces by partnering with a complementary, non-competitive business. If you pursue this path, make sure you have complete legal contracts in place to safeguard your company in the event of unforeseen complications.

Need help with making a growth strategy?

Whether you are self-employed or own a small business, we can advise and help with your growth strategy. To speak to one of our accounting experts in East London, contact us here or call us on 020 3327 6340.

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