Small business growth strategies are aimed at making smaller businesses grow bigger and better. Strategies are drawn out after a lot of deliberations given the fact that business strategies can make or break a business or they can revive a business when it’s going down the graph.
A growth strategy is defined as a well thought out plan for future growth. It is different from a business plan. The differences between the two is defined as: A business plan defines the business by structuring the ideas for the business like what products and services to offer, promotional offers, sales target, etc.
On the other hand, a business growth strategy, in general, prioritizes resources like time, money and people to grow revenue and increase the return on investment (ROI). The same holds true for a small business too.
A few questions that make a small business growth strategy easy to understand are expansion plans into new markets, targeting new customers, new product and service ideation for service and product expansion to cater to a larger audience.
Small business growth strategies are not really that different from the growth strategies of medium or large businesses. The only difference lies in the magnitude of the strategies employed and the scale at which these strategies are executed.
Keeping in mind what small business growth strategies intent on achieving, here are the tips for developing the same.
Existing market expansion through penetration:
Here a lot of brainstorming goes into deciding what new needs to be done to reach out to newer audience and a larger market. Market penetration is the strategy that aims at gaining a competitive edge, with competitors.
Market penetration requires ideating ways to increase market share. There are various tried and tested ways to execute this intent. Some of the most practiced tips to do so would be lowering selling price, promotional offers, discounts, etc.
New product or service development
This strategy will come to play once a business is established and has been in operation for a while. Even a small business in its growth strategy has to make room for new product and service development. These developments are however not meant for a new market.
These small business growth strategies are developed to cater to the existing market. What needs to be understood here is that a new product or service does not necessarily mean an innovation. It could be an addition of a feature or as simple as making the same product available in more color range.
Product and service diversification
This is a common word that businesses are always buzzing with. Diversification implies diverting from the current product and service portfolio. So why would small business growth strategies want to inculcate such a risky move?
It is all about market capturing and opening up new avenues to generate more revenues. There are two ways of diversification. One is to initiate a whole new product or service range, which would be a completely new business.
Or it could be a new service yet which caters to the same market. For instance, as a small B2B service provider, you could be into corporate maintenance. Either you enter a completely new service like catering to the customers or you may choose to cater to the B2B domain exclusively as a caterer.
Looking to develop other markets for the product
Small business growth strategies must look at developing markets for their products and services. This would be diverting into another domain which will open up another market to bring in revenue.
Many small businesses launch their line of products and services in the market only to get lost in the chaos. The mistake that is made here is the lack of understanding of the target audience. All products cannot be for everyone in general.
Some of the products and services might be used by people in general. However, the target audience should always be defined. In the above example of launched product losing its focus, the redemption of the product position comes with segmenting of the market into smaller units.
This will help in appealing to a specific market, and a specific target audience.
Looking for alternative channels
This strategy is again about new markets and prospects. For instance, say your small business is now has a brick and mortar office. You have a business website and get good leads off the website. It’s now time for you, as a small business owner to look at going online with your business, given the fact that you already have traffic on your website and people are already enquiring about your products and services.
Leveraging on various channels to reach out to your target audience is a way of ensuring that you’re the small business growth strategies are well planned and geared to make the business reach new heights.
Do not shy away from business acquisition
As a small business entity when you churn out your small business growth strategies, you have an exclusive focus here. The central idea is to expand your business by market expansion. One of the most practiced yet risky and ambitious ways is an acquisition.
However, as a small business, you might not think along these lines. Consider this: the small business that you currently have has flourished to an extent where you can expand your business. That would mean more servicing capacity or production capacity.
This, in turn, will require manpower, more facilities, and infrastructure. If you have the funds and you can acquire another company which will be a valuable addition to your existing set, up go ahead. Expansion is always a key point in small business growth strategies.
Small business growth strategies are designed to suit the SME sector. SME refers to small and medium enterprises, as categorized by international standards. This classification is based on the bracketing of business enterprises as small, medium or large, based on the personnel employed by entities in each of the categories.