Business initiatives and consequent growth are critical for the success and survival of any enterprise, especially SMEs.
Therefore, understanding the stage of growth your small company is in and devising effective business growth strategies are of utmost importance to assist your small enterprise in surviving and thriving in the highly competitive business environment.
The following are a few of the most effective growth strategies that can set the pace for the success of your small business.
1. Strategic Partnerships Formation
Creating strategic partnerships is one of the most effective growth strategies. The strategy can help two companies join forces for mutual benefits and gains. Depending on the industry and nature of your company, partnering with another firm can bring plenty of growth benefits to your small business.
For instance, strategic partnerships will aid you in the transfer of knowledge, expertise, and technology. Partnerships can also allow you to undertake a huge project with ease. Often, this happens at a fraction of the cost you otherwise incur alone.
When forming strategic partnerships to stimulate business development, opt for a non-competitor partner that has a culture and values similar to yours. Moreover, consider the reach and reputation of prospective partner companies to gauge the growth benefits you’re likely to gain.
2. Existing Customer Base Focus
A common and serious mistake that most small enterprises make is focusing on strategies to acquire new clients at the expense of the existing ones. Whereas attracting new customers is vital for your company’s growth, increasing customer retention and loyalty is a more successful way of attaining this objective.
In addition, persuading an existing client to return and purchase from your company is easier and cost-effective than persuading a new prospect to give you a chance. Also, retaining clients can remarkably raise your company’s profit margins. Moreover, existing loyal customers can be a good source of word-of-mouth referral and advertising to inspire your small company’s growth. Therefore, this is one of the must-have strategies for your small company’s growth strategy.
3. Market Development
This growth strategy often encompasses increasing sales for your offerings in new markets, which usually take various forms. For instance, your small enterprise can expand its sales to a new town, a new geographical region, or venture into a foreign country. You can achieve this by forming a strategic partnership with well-established distributors.
If you’re considering a new market in a foreign country, you need to consider differences in local culture and business regulations. For instance, you can venture into a new market in a foreign country by offering local entrepreneurs franchising alternatives. That way, you’ll easily penetrate the market while mitigating the risks involved.
The key strategy for your small company’s growth is diversification, which involves your company selling new products and services to new markets. However, you need to note that this strategy often carries a high level of risk, but can you achieve growth without taking risks? And although this strategy requires considerable financial resources to succeed, it can also boost your earnings in the long run.
The various types and forms of diversification include these:
- Vertical diversification: Often, this occurs when your small enterprise reaches a point where it can compete with several of its clients and suppliers.
- Horizontal diversification: Usually, this encompasses the development of a new product line for your company’s existing clientele base.
- Conglomerate diversification: In this type, your company develops new products or services for an entirely new and different target audience.
- Concentric diversification: The diversification method takes effect when your small enterprise decides to develop a new product or service similar or related to one of your existing products or services.
5. Sales Funnel Development
Another strategy to help you grow your small enterprise involves developing a sales funnel. That way, you can clearly outline the steps each client needs to take before purchasing your product or service to determine success and drop-off points. Ultimately, gaining such insights will assist you in enhancing the stages where most clients decide not to convert, spurring your small company’s growth.
Business growth is vital for the success and survival of your small enterprise in a highly competitive business environment. Using these five strategies, you can help revamp your efforts to stay afloat and even develop a thriving business.