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6 Business Growth Strategies For Small Businesses

10 May 2023 by Shweta Jhajharia

Times have been tough for small business owners in the past few years, and with all the doom and gloom in the news the experts at Growth Idea have just the positive boost that you may very well need!

There are many strategies for small business that business owners can follow, whether you’re looking to boost sales or attract customers we may have just the business growth strategy you’re looking for.

According to statistics, only one in three small businesses survive for more than ten years and about half of them collapse within the first five years. These figures are gloomy but they also provide some optimism. Owning a business involves risk, but there are growth strategies to increase your chances of success.

Here are some small business growth strategies picked out by our business growth experts here at Growth Idea:

What is a business growth strategy?

Simply said, a business growth strategy is a set of techniques or actions you do to advance your company from one stage to another.

Different people will interpret business growth in different ways. Others see it as the opening of a new location or a market expansion, while some see it as an increase in revenue as well as sales.

Your business growth plan should be based on market research regardless of how you define growth. You must take into account your company’s organisational structure, the goods or services you provide, and your target market.

Along with a timeline to track your progress, you should also list your short- and long-term objectives for various stages of business growth, as well as the growth strategies you plan to employ at each stage.

6 business growth strategies for small businesses

Every business growth plan has its own amount of risk and is effective at different phases of growth, so it can be a good idea to hire a business coach who can point you in the right direction. These growth strategies will help you position yourself for future success!

Market Penetration

By offering more of your present goods or services to customers in your current market, this growth approach primarily seeks to expand market share. A lot of small and medium-sized enterprises utilise this low-risk tactic.

As you might expect, the majority of brands and companies aim for market penetration rates that are above average or good. A high penetration rate generates immediate financial gains.

More than its top three rivals combined, Amazon had a 49% market share of US e-commerce in 2018! Or, to put it another way, 5% of all retail sales in the United States are attributable to Amazon.

Market Expansion

Market expansion or market development is a growth strategy that might be useful for a developing business that is having trouble establishing itself in the existing market (perhaps as a result of fierce competition).

Selling current goods and services in a new market, such as in a new country or to new audiences, to gain market share is referred to as market expansion. To achieve the best outcomes, you must conduct in-depth market research to develop a complete understanding of the new industry and your potential new customers.

Market Segmentation

This marketing expansion technique separates a market into various divisions, for example:

  • Geography
  • Demographics
  • Market behaviour
  • Customer behaviour

This expansion approach might be beneficial for small businesses competing in markets with larger rivals. You can find and concentrate on a market segment that your competitors haven’t yet successfully penetrated by segmenting the market.

Diversification

Selling new goods and services to new markets is a growth strategy known as diversification. There is a significant risk associated with this growth strategy. Although it requires substantial financial resources to execute, it has the potential to yield very high returns.

According to research, a diversification strategy can lead to 20% business growth versus companies that choose not to diversify.

Cost reduction

Cost reduction is a business growth approach to boost your earnings and free up more money for expansion. When operating expenses are kept to a minimum without compromising quality, your company is more likely to thrive.

Here are a few easy ways to put cost reduction into practice:

  • To keep track of spending, use accounting software.
  • Avoid using paper as much as you can.
  • Analyse all of your company processes, and when automation is an option, do so.
  • Reduce your use of traditional marketing techniques and focus the majority of your marketing efforts online.
  • When necessary, think about outsourcing.

Customer retention

How you cultivate and turn both existing customers and potential customers into recurring and devoted customers is what customer retention is all about. You must earn your customer’s confidence for this to be effective.

Because it is less expensive to retain customers than to acquire new ones, doing so can reduce your business expenses. Repeat customers are also more likely to make larger purchases, and devoted clients who spread the word about your brand can be a crucial component of the expansion of your company.

Alternative channels

Especially in the digital age, using alternate channels is a well-liked small business growth method. It involves leveraging another platform or channel to advertise your company, interact with customers, and hopefully seal the deal with a sale.

Examples of using alternative channels are:

  • Selling products through a third party, e.g Amazon
  • Using Google Ads to promote your business

Looking for your ideal business growth strategy?

We offer award winning business growth advisory services and can assist you in creating the best corporate and business strategies for your organisation.

Together, we’ll assess the advantages and disadvantages of your business to create a growth strategy that will help you reach your objectives.

Book a free strategy review today to learn more about how we can help you grow your business.

Business Growth Strategies for Small Businesses FAQs

What are growth strategies in small businesses?

A growth strategy is a plan that businesses develop to increase a particular aspect of their business, such as annual revenue, the number of clients, or the number of goods. Addition of new sites, a new target audience, spending on customer acquisition, or growing a product line are examples of specific growth tactics.

Why is growth important for a small business?

The long-term survival of a corporation depends on growth. It facilitates asset acquisition, talent attraction, and investment financing. Profit and corporate performance are also fueled by it.

What should a growth plan include?

A growth plan is a detailed, organised list of goals for the future of your company. It outlines your company’s objectives, as well as specific plans and methods for achieving them. A growth strategy takes into account your company’s current situation, including its strengths, shortcomings, and prospects.

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Shweta Jhajharia

Shweta Jhajharia is one of the leading authorities on Business Value Building and the creator of the unique 6M Model. Shweta is widely respected as an impactful, intelligent and results orientated professional who helps business leaders unleash their potential to reach meaningful, higher objectives. This realisation of potential and maximisation... Read more
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