If you are looking to grow your business in the year ahead, we have put together some of the most used small business growth strategies you can implement.
Growing your small business has a wide range of advantages, from providing security for you and your family through to sharing your innovative product or service with a wide range of people.
It’s not an easy process, but by taking a systematic approach and knowing which type of strategy is the best one to use, you can improve the likelihood of success by a wide margin.
Before you begin…
Before you start to put your strategy of choice into action, you need to know how you would like your business to grow.
Businesses can grow in many ways. For example:
- You may want to bring more clients on board
- You may want to make more sales
- You may want to open up new offices or stores
- You may want to take on more staff
- You may want to launch new products or services
Small Business Growth Strategies
Knowing exactly how you want to grow will help you set achievable goals for the year ahead and choose the right strategy for your needs.
1. Market Penetration
The first strategy you may choose to adopt is market penetration. This is when you look to increase your market share. It’s the most utilised growth strategy for small businesses as it is the easiest to implement.
Market share is the percentage of sales your company generates compared against the industry in general. The higher it is, the better for your business!
To increase your market share, you need to sell more than your competitors. You can do this in a variety of different ways including:
- Reducing your prices
- Providing special offers and discounts
- Increasing your brand awareness
- Selling your products and services through new channels, such as online or other stores
- Making changes to your product or service to make it more appealing to customers
To make the most of this strategy, you need to research your competitors and find out more about them. How much do they charge? What marketing channels do they use? Are there any weaknesses in their marketing strategy you can capitalise on?
2. Market Development
This growth strategy is when you review your product or service and investigate other markets you can promote it to.
According to CB Insights, 42% of businesses fail because of a lack of market demand, so reviewing the market you are currently in to see if it is a viable one can yield promising results.
For example, let’s say you sell vegan snack bars and you’re currently marketing them towards people who eat a plant-based diet. If you want to boost sales, you could consider promoting your product towards people interested in fitness and exercise as a healthy post-workout snack.
You can look into targeting different geographical markets too. If you sell your product locally in shops, you could reach out to stores in other regions to see if they would be interested in selling your product there.
You could even set up an eCommerce store to expand your reach across the UK and beyond!
3. Market Segmentation
Market segmentation is the opposite of market development. Instead of extending your reach into new markets, you are actively looking to focus on a more specific market.
This may sound counterproductive, but it can be a great option if you are up against large competitors, and you want to find a more specific niche.
For example, let’s say you provide web development, but you are up against a lot of other larger businesses that offer the same service. After carrying out research, you find a lot of prospective customers are in the construction industry, so you decide to specialise in providing web services for companies in this particular market segment.
4. Alternative Marketing Channels
If you are only selling your product or service through one or two channels, expanding the ones you use may introduce your business to entirely new audiences. For example:
- You can sell your product or service online. You can either do this on your own website using an eCommerce plugin or on a third-party website like Amazon or eBay
- You can sell your product or service on a mobile app. For example, if you own a takeaway or restaurant, you can create an app that customers can use to order food for collection or delivery
- You can sell your product or service using social media. Social media has come a long way in the last few years and on platforms like Instagram, you can showcase your products directly through your posts!
- If you do sell your product or service exclusively online, why not look at selling offline? You can use farmers markets, sales expos and trade fairs to network with new customers and increase sales
A multi-channel marketing strategy has its benefits. For example, did you know businesses with multiple channels retain 89% of their customers compared with 33% of businesses that don’t?
5. Product Development
Sometimes it is not the way you market your product or service, but the product or service itself.
With this business growth strategy, you develop a new product or service to sell in your current market (product expansion) or an entirely new market altogether (diversification).
This strategy is common in the technology industries, where companies like Apple and Samsung release new versions of their phones every few years.
The product doesn’t have to be something entirely new. You can add an additional feature to an existing product or update features when older ones go out of date.
This growth strategy isn’t frequently used but can be a powerful and profitable one if it is successful.
Acquisition is when one business purchases another. It is a tactic commonly used by larger businesses (a recent example is when facilities management company Mitie bought out competitor Interserve). However, smaller companies can use it to their advantage too.
The benefits of acquisition include growing market share, acquiring brand new customers and securing rights to product lines.
How Awardaroo can Help you Grow Your Business
If you know you want to improve business execution but aren’t sure where to begin, we can help.
We offer a free 90 minute business review where we will work with you to see how you can boost your market share and turnover, as well as improve productivity and efficiency. We'll help you come up with a small business growth strategy for 2021 and beyond.