Small businesses don’t show massive growth in their early stages. It takes time and effort to make strategies, gain new customers, retain existing customers, mergers and acquisitions, find alternative channels, marketing and advertising, and lots more.
If you are starting a business and worrying about its growth, or struggling with sluggish business performance, here are six growth strategies for small businesses.
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Work with a London-based accountant for tax, accounting, payroll, & EIS/ SEIS needs.
In this guide, we’ll cover the following:
- Market penetration
- Market development
- Market segmentation
- Partnership
- Product expansion
- Recruit and Train Staff
- How can alternative channels help businesses grow?
- Wrapping up
1. Market penetration
Market penetration is an excellent strategy for small business growth. It asks owners to build more market share by selling their existing products or launching new products to attract customers.
You can do the following:
· Improve your products and services
You need to improve your products and services for business growth constantly. Start with taking customer feedback and make changes according to them. You may ask them what products they are buying from you and what they love about it, or what changes they prefer in the product.
· Take your business online
To improve the efficiency and productivity of your business, you can sell products or services on the internet. It helps you reduce costs and allows you to communicate with customers and supplies. Any analytics software can help you understand how a customer uses your website and instruct you on ways to improve the site.
You can consider the costs of taking the business online and the requirements. Additionally, the security system should be efficient to protect customers and your business.
2. Market development
An enterpreter must have a good Market development strategy to reach out to new customers while retaining existing ones. It is vital if the sale of your products has stagnated, or you are expecting to increase your market reach to a new target domain.
· Increasing sales to existing or new customers
You need to increase sales for business growth, but sales depend on business conditions and its performance. You can either choose to attract new clients or retain existing customers.
- You can persuade customers to become repeat clients,
- Find customers who stopped purchasing products from you, and look for ways to bring them back.
You maintain a record of products of your sale and customers to understand who had stopped purchasing products and who are the promising ones to increase business sales.
To attract new customers, you need to have good marketing and advertising strategy. Additionally, ask your consumers to recommend their closed ones about the product.
· Expanding outside locality
If you want to expand your business outside the locality, you must work with wholesalers, retailers, and distributors. Additionally, you can expand your business with franchising, where you permit another company to operate under your brand.
· Expanding outside the UK
You can export your products to new customers outside the UK. The Department of International Trade can help you successfully sell your products in other countries.
· Review your prices
Compare prices against competitors to identify pricing and margin mismatches.
You can offer customers discounts to increase sales but not by reducing the business profitability.
You can also make a more significant profit with rising prices, even when it may reduce sales.
Look for small business accountants or a CFO to help you understand the numbers and how efficiently you can maximise profit and reduce expenses.
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3. Market segmentation
It becomes challenging for small businesses to compete with more prominent brands in the market. That’s why you need market segmentation. It involves dividing a broad market into small groups depending on demography or customers’ buying habits.
You can find ways to identify potential customers for your products and services using service, website analytics, following purchase histories, and social media marketing campaigns system.
It may sound not very easy and time-consuming, but using powerful customer relationship management tools can help you automate the process. It enables you to develop a solid data strategy allowing market segmentation by using visual and easy-to-understand matrics.
4. Partnership
You can partner with another small business to collectively increase the custoemr base or reach. Avoid direct competitors as your partner, or you may lose customers. Your partner must compliment you and ensure their customer base finds interest in your products or services.
Partnering with another business should ensure that it benefits both of them significantly. It helps owners to tackle big projects by combining both their resources. Additionally, their human resources can come up with a range of skills to develop a new product or promote brands.
An example of a partnership will be a cosmetic surgery business partnering with dentists or florists partnering with wedding planners.
5. Product expansion
At times, it is the product development strategy that helps your business to grow. It means developing new products or modifying your existing product and services to appear fresh and meet the current market demands.
· Create a new product
To create a new product, you need to go through-
- Research and development,
- Assessing customer demands,
- Create a design analysis of the product,
- Create design documentation,
- Prototyping
- Get feedback from customers
- Production.
· Brand extension
You can launch a new product, a new product category, under the established brand name. That may include:
- Branding the original product in a recreated form
- Combining two best products into one
- Using the existing brand into a different product category
- Creating some complementary products
You put time and effort into studying the market before launching a new product.
6. Recruit and Train staff
When your business starts expanding, you need to increase the employment capacity to meet the growing consumer demands and use a broader range of skills. The easiest way to achieve this is by recruiting new staff and training your existing employees.
By employing new people in your business, you can spread the workload that expands the production level. Also, owners can use different skill sets and expertise of old and new employees.
Additionally, owners can take an apprentice to grow their capacity to invest in people ready to learn and work simultaneously.
Training your staff is essential for business growth and development. Timely training broadens employees’ knowledge and skills, which helps increase business productivity and profits.
Accountant for small business
Work with a London-based accountant for tax, accounting, payroll, & EIS/ SEIS needs.
How can alternative channels help businesses grow?
If you sell your product or service through a single channel like a showroom, you must introduce alternative marketing channels to meet a broader audience.
· Take your business online.
Sell your product through a third-party website or create a new business website.
· Use mobile application
Create a mobile app to take customer orders, sell your products and services, and receive payments.
· Social media
Social media is a great hype among youngsters, and therefore you can reach out to young customers by selling products via social media handles.
You can take out loans or investments to get extra funding for business growth. Tease me include investing your previous profits or your company to investors. There are specific government-backed schemes for small business owners to help you grow your business efficiently.
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Wrapping up
A standard business plan is vital for small businesses to grow their sales and profit over a short period. That may include growth strategies, marketing plans, operational works, and employees. It can be challenging to come up with a great business strategy. Therefore, ask business mentors to share their experience, skills, expertise, and contacts to help you develop great business ideas and implement them effectively.
