Small business owners face challenges on a daily basis. In this ever-changing market, simply surviving is an achievement. Statistics show that 20% of UK businesses don’t survive their first year and 60% go bust within three years. So if you’re still standing and wanting to grow your small business, then I praise you for getting this far.
Small business growth means different things to different small business owners. Whilst you may be focused on increasing your market share or bottom line, someone else may prioritise customer retention or introducing new product lines.
Whatever your end goal, there are proven strategies and techniques to help you. Here, I’ll run through 8 of the most effective small business growth strategies along with some tips and ideas.
What are Small Business Growth Strategies?
A business growth strategy is a process of techniques or actions to progress your company. It’s about scaling your business, efficiently and effectively.
This isn’t a recipe for overnight success. It takes time and effort. It also means that you, the small business owner, needs to step away from the day-to-day tasks so that you can work on strategic plans, nurturing business and customer relationships, and realising opportunities.
Your business growth plan will be very specific to your situation. That includes your target market, your existing products or services, your company structure (be it just you, the entrepreneur, or a team) and your current position (think cashflow, resources and so on).
Each business growth strategy comes with an element of risk and will be more effective at certain phases of growth. But a good strategy can set you up for future success!
Want some help with business plans and strategies? Let me help you to get started.
8 Business Growth Strategies to Boost Small Businesses
There’s no ‘one size fits all’ solution for small business growth. There are multiple routes to success. Think about your business ideas, goals and dreams. See which of these paths appeals to you the most.
Market Penetration
A market penetration strategy is about expanding your market share. You can offer more of your existing products or launch new products in your current market to attract new customers. It’s about reaching more people in your existing market.
You could listen to customer feedback and improve or enhance your product offering based on their needs. Try introducing customer loyalty schemes to encourage repeat business. You could start up online sales to reach more potential customers. All of these techniques can increase your market penetration rate.
Market Expansion
Market expansion or market development means looking beyond your current customer base and venturing into new markets to find new customers. That new market could be a different demographic group or a new geographic location (elsewhere in the UK or overseas).
It’s not about changing your offering. This growth strategy focuses on reaching different potential customers and adjusting your marketing strategies. To identify these new markets, it’s really important to do in-depth market research to identify gaps in the market and new customers that fit with your brand.
Market Segmentation
As a small business, or even a new business, it can be really hard to compete with established, big players in the market. But if you divide the market into smaller groups, you may identify niches or segments that you can target easier. It’s all about finding and focussing on a market segment that your competitors haven’t totally covered.
Look at customer behaviour metrics on your website and social media channels. Delve into market trends. This data will help you to identify potential new market segments to target.
Product Development
Sometimes, expanding your product offering to your existing customer base is the way to grow your business. If there’s a shift in customer needs and expectations, updating your existing product or developing new products can meet this new market demand. It’s not a quick fix though. Product development takes time and money.
Diversification
A riskier strategy is to develop new products for new markets. You’ll need a significant financial input to create new products and launch them into new markets. But the potential returns on investment are high too.
Again, you’ll need to do robust market research and create an effective business plan before you start product development or marketing efforts in a different territory.
Alternative Channels
Why not try a different platform or channel for sales or marketing? Expand your digital marketing by serving Google ads or publishing content on another social media channel, like TikTok or Instagram. Start selling your products on Etsy or Amazon. Maybe an app would provide a better customer experience for bookings and increase your sales?
Do your research to work out where your target audience spend time, then develop your action plan to interact with them there. It’s a relatively simple way to increase brand awareness and reach potential customers.
Strategic Partnership
They say that ‘together we are stronger’. Partnering with another small business can be beneficial for both of you. But you need to make sure you make a good strategic fit, with complimentary skillsets and a shared vision. For example, you could be a hairdresser who partners with a beauty therapist or a marketing specialist with a website developer. Both parties share a target audience and offer complimentary but distinct services.
This strategy can extend the customer base and reach for both small businesses. It can be cost effective as you combine resources.
Acquisition
A bolder, step up from a business partnership is an acquisition. Here, you buy another business with the aim of fast-tracking your small business growth. It’s a big move, but can have a huge impact on your bottom line and overall business success.
An acquisition means that you purchase more than 50% of the other company so that you’re in control. Another route is a merger, where two businesses become one. Acquisitions and mergers need high amounts of resources, so it’s usually a growth strategy for well-established businesses.
How to Decide on Your Best Business Growth Strategy
I’m a big fan of strategic planning for small businesses. When you spend time deciding on your business goals and intentions for the short-term future, you’ll focus on making them happen. Once you’ve decided what you want to achieve, you can work on the ‘how’.
But you don’t have to do it alone. Working with an experienced business coach like me can make it so much easier and more likely to happen. I offer one-to-one and group business planning and I’ll help you to work out which strategies to use and how to go about it.
Let’s chat to find out more about each other’s business
“You need a coach to maybe take [your business] to the next level. Personally for you to lead the organisation. But also in terms of actual strategies that you can implement into the company…I’m working on strategies and growing the company. I would never have been able to work on those things now if it wasn’t for Phil.” Managing Director, Impact Foods International Ltd
