Whether running your business for the last ten years or just celebrating the first anniversary of launching your company, it’s vital to have effective business growth strategies. It applies no matter the company’s size, from the biggest multinational to a small business.
Strategies for growth are an essential part of having a successful business. As a business owner, the last thing you want to be is stagnant. Companies that don’t incorporate strategies for growth in their business plans are likely to flounder and, in the long run, fail. These companies will be threatened by new players in the market, new products, and those with clear growth strategies.
To avoid these scenarios, it’s critical that your business also has a strategy for business expansion. There are several strategies a company can do to help it grow. The kind of strategy you use depends on your business goals.
Let’s take a closer look at how you can apply business growth strategies to your company.
Growth Strategy Definition
First, let’s define a growth strategy: an action plan you create and execute to grow your business’s revenue and market share. Growing revenue and market share mean increasing your customers and increasing revenue.
Although it sounds simple, successfully expanding a business involves careful planning and executing a growth strategy. A company cannot expand so fast that its operational costs also skyrocket. Growth should be seen as a strategic move and not just growth for the sake of growing. You should execute a growth strategy with a clear plan in mind.
Strategies for growth are vital to any company’s expansion plans, overall direction, profits, and, ultimately, success.
Strategies for Business Growth
There are several strategies for business growth. Let’s explain some of them below.
Organic growth means the business expands on its own, using internal resources, without the need to rely on external resources. The company doesn’t need new partnerships, mergers, or debt to create growth. This type of growth is the most ideal among strategies for expanding a business.
One way to achieve this is through organic search, which results in more sales. For example, let’s say your online store is launching a new product. Many people heard about the product through your usual marketing efforts, creating lots of buzz and interest among your target market. This interest led existing and new customers to visit your website and increased sales. This growth in customers and sales happened without any external factors.
2. Strategic partnerships
Another strategy for business expansion is through strategic partnerships. Examples of these are mergers, acquisitions, and partnerships. We’re sure you’re familiar with some of the most famous mergers and acquisitions, such as Disney/Pixar with Marvel, and AT&T with Time Warner. These mergers put two giant companies together that formed an ever larger and more formidable entity.
For smaller businesses, a more common strategy is to form a partnership. Working with companies or firms with the same target market can help grow your business. If you have a clothing business selling maternity wear for pregnant women, you can partner with many businesses with the same target market as you. For example, you can partner with a toy business, a diaper company, a baby bedding business, and more. Here, both partners can grow their market share. Through the new partnership, both brands are exposed to new customers who may not have heard about them yet.
3. Product development and expansion
Developing new products and expanding your current product line is another strategy for growth. There are a couple of ways to do this. You can add new features to existing products, or you can also offer new products. Let’s say you own a sportswear brand. The first scenario can be as simple as adding a pocket and a zipper to your best-selling running shorts. The improved design made the shorts more appealing to customers looking for a place to put their mobile phones while running.
You can add new products to your sportswear brand in the second scenario. For example, you add fitness equipment to your brand. Instead of just selling clothes, you can also sell yoga mats, resistance bands, weights, and more. Adding new products to your store expands your product line while still catering to your target market.
4. Market penetration
Another typical strategy for growth is market penetration. You sell your products in a market you haven’t tapped before. Before you do this, you must identify new markets that would be interested in your products. A new market could be a nearby city or a new region you haven’t tried selling to before.
If you have a successful home accessories business in your city and surrounding areas, you can start expanding into nearby major cities, for example. A growth strategy marketing, in this case, is to begin offering your products to new stores in new areas that don’t carry your items yet. While this is not always easy to execute, this strategy is one of the most logical “next steps” when growing your business.
5. New channels
Opening new distribution channels is part of the most well-known strategies for growth. New channels can increase revenues without changing or adding anything to your products. While this strategy increases operational costs, the increase in revenue from the new channels should cover the costs and result in more profits.
Typical examples of this strategy for business expansion are a brick-and-mortar store launching its online store, an e-commerce site offering its products offline, and consigning your products with other stores. All these open up new avenues and channels to reach more customers.
Executing strategies for growth
Now that you’ve learned examples of strategies for business growth, the next question you’ll probably ask yourself is, “How do I execute these strategies?”
1. Market Research
First, do your market research. Knowing your market is the first step all companies should take, no matter what strategy for business expansion you are considering. Get to know your customers and your target market. Market research helps you gain vital insights into your existing customers and also helps you learn about the potential of new markets.
Doing ample market research gives you an understanding of growth opportunities, trends, and potential barriers to entry that you may not be aware of yet. For example, you might assume that your customers will automatically flock to a new website you’re planning. However, after conducting your market research, you find that most of them still want to shop at brick-and-mortar stores. You might decide to hold off spending on a new website and use those funds for expanding into more physical stores in another city instead.
2. Establish your goals
Next, write down your growth goals. Again, don’t just expand for the sake of expanding. Your expansion goals should be measurable. For example, how much do you want to grow your customer base? How many cities do you want your products to be available in by the end of the year? Your goals should be SMART – Specific, Measurable, Attainable, Realistic, and Time-Bound. These make keeping track of your goals more straightforward and systematic.
3. Determine your strategies for growth
After you’ve established your growth goals, determine which of the strategies for growth can help you achieve these goals. Is it opening up new sales channels? Is it partnering with other complementary brands? Consider your budget, timelines, opportunities, and competition when deciding which strategy to execute.
4. Create your plan
Now, it’s time to create a step-by-step plan to execute your growth strategy. Include details in your plan. Remember that these are concrete actions you will take that will bring you closer to achieving your growth goals.
Get as detailed as possible and make sure you cover all bases. For example, if you are planning to improve the design of your best-selling running shorts, what’s the first step you need to take? It will probably be surveying your current customers to determine what they need. Next, have a meeting with your designer, then schedule a meeting with your designer and fabric supplier. After, you need to lay out a production schedule, a marketing plan, and so on until you finally execute your strategy.
5. Execute and monitor your plan
The last step is to execute your strategies for growth. Start running your plan and, more importantly, regularly measure your progress. Remember that you have SMART goals, which make it easier to track where you are and how close you are to your objectives.
Remember, you can and should adjust if something is not working. Don’t stick to your plan if it’s obvious that your current plan isn’t bringing you closer to your goals. Be agile and adjust when necessary. While your ultimate goal shouldn’t change, the steps you take to achieve this goal can always change and improve.
For example, you realize that your current partnership with another business isn’t adding as many new customers as you were expecting. Don’t renew this partnership when your agreement ends. You can already start looking for a new partner that might bring better results for both parties. You don’t need to stick to a partner that isn’t helping you achieve your goals.
Again, you can use several strategies for business growth to expand and grow your business. Whichever strategy you decide to use, ensure that you have carefully studied your target market, your budget, the resources needed to execute this strategy, and most importantly, if these strategies help you reach your business goals.
For any company, growing a business is no walk in the park. However, with the right strategies in place, and the determination to create a plan and execute it, you will be able to grow and expand your business successfully. Always keep your goals in mind and be flexible when working towards achieving them. Good luck!