Every business owner wants growth and profit. No one wants to sit back passively and miss out on opportunities. However, as noted in Rhonda Abram’s analysis in USA Today, it’s easier said than done: there’s a certain key combination of factors that must be achieved. The key is coming up with the right combination of resources and steps to take to achieve “growth.” There are big problems with growing a small business opportunistically. Most importantly, you can’t control it or count on it. Stated another way, growth needs to be planned for following a systematic and rational approach, otherwise any so-called growth that comes out of the process will arguably be nothing more than “accidental success.” On the other hand, opportunity, especially big opportunities, often mean demanding clients that can distract you from building your core business.
The following seven keys, as noted by Abrams, are as follows:
- Know what business you’re in. Know thyself, and know how the business environment sees you. You may think you know what your business does, but in today’s rapidly changing world, with more competitors, it may be hard to figure out exactly what your strategic position is and how your customers perceive you. What are your core competencies?
- Take care of your bread-and-butter business first. Take care of the things that work the best. What business activities actually bring in the money to pay the bills? Never jeopardize these activities, even if they’re not exciting or “sexy.” Your employees need a paycheck, and your dog has to eat. Taking care of them is your first, though not your only, priority.
- Don’t bet all your money on one horse. Spread your strengths around. While it’s not always easy to diversify, it shouls be an important goal. Many businesses have only one or two customers or distribution channels that bring in the bulk of revenue. Being dependent on one or two revenue streams is perilous.
- Be clear about your target market. “Know thyself” was mentioned, but perhaps even more important: know your customers like the back of your hand. If you don’t know exactly who your customers are, you won’t know what they want and how best to serve them. The biggest problem of most small businesses is they try to serve too large a market.
- Identify exit scenarios. Someday, you’ll want to leave your business — sell it, close it, pass it to your family members. Outline a few realistic exit possibilities and the steps necessary to make those happen.
- Build one business at a time. Most entrepreneurs have many great ideas and see opportunities to grow in many different directions. But if you try to act on all those ideas — seize those opportunities — at once, you’re less likely to be successful at any one of them.
- Choose a strategy you can afford. Growing a business takes money: for marketing activities, new staff, inventory. How will you fund that growth? Figure out what kind of financing you can live with, and choose your growth strategy accordingly.
In addition, the following growth strategies are just a few presented by Susan Ward within the publication “The Balance” on January 4, 2018. These points emphasize the aggressive community-minded outreach strategies that businesses can take—the “extrovert” side of your business, if you will:
1. Draw as Much as You Can From Your Existing Market
When you think about how to grow your business, the first thing that probably comes to mind is getting new customers. But the customers you already have are your best bet for increasing your sales; it’s easier and more cost-effective to get people who are already buying from you to buy more than to find new customers and persuade them to buy from you.
2. Ask For Referrals.
That's not to say that getting new customers is a bad approach. One of the easiest ways to do this is to ask your current customers for referrals. Having good products and great customer service and just assuming that your customers are passing the word about your business isn’t going to do much to increase your customer base; you have to actively seek referrals. During or after every job or sale, ask your satisfied customer if he knows anyone else who would be interested in your products or services.
3. Innovate Your Product or Service.
Discovering and promoting new uses for your products or services is a great way to both get existing customers to buy more and attract new customers. Think petroleum jelly and duct tape—and how few of these would actually be sold if they only had one use!
4. Participate In Trade Shows.
Trade shows can be a great way to grow too. Because trade shows draw people who are already interested in the type of product or service you offer, they can powerfully improve your bottom line. The trick is to select the trade shows you participate in carefully, seeking the right match for your product or service. Trade Show Tips will help you get the best return on your investment.
In conclusion, growing your business is quite a bit more than just sitting back and watching what’s happening. Growth is a matter of life or death figuratively speaking. “If you don’t grow then you will eventually go.”