It is essential to know how to grow a business to ensure your success and financial stability. You risk losing your market share or being outcompeted by your competitors if you don’t grow your business.
It also requires additional work, hiring more people, and possibly funding to pay for the higher cost. You need to make sure that your business is ready for expansion before you decide to take the leap.
Indicators that you need to grow your business
Consider the following factors to determine when it is time to expand your business. If you have several of these in your business, then it might be time to expand.
A loyal customer base is a good thing.
Customers want you to grow.
Your company has been financially successful for at least three years.
A strong team is needed to support growth.
Your market or industry is growing.
You have more work than you can handle.
There is a need to purchase related products and services.
There’s no room for you.
Strategies to grow your business
After you have decided that expansion is the right decision for your company, these are some tips to help you take your business to the next level.
Add new products
You are a smart business owner and will always be looking for ways to improve your products or add services. Begin with market research. Talk to your customers to find out what other products or services they’d like to see and how much they’d pay.
You should not pivot away from your core business. A natural expansion for apparel companies is to offer shoes and accessories. Baking goods would be more feasible. Diversifying your products is key to ensuring they complement one another.
Optimize your existing market
Growth doesn’t necessarily mean acquiring new customers. It can also include selling more to existing customers. This strategy is implemented by segmenting your market to identify customers who are most likely to purchase from you. Based on your criteria, such as buying history, age, and location, this analysis will allow you to divide up your customers. After identifying the most profitable market segment, you can focus your marketing and sales efforts on this segment and grow your business.
Claim a niche market
Although it may seem counterintuitive at first, you can increase your business’s profitability by narrowing your customer base. When you apply market optimization to its fullest extent, your niche market will be what you discover. A niche market is a subset of the market where your product or service is concentrated. The advantage of focusing your efforts on a niche market is the lack of competition and reduced effort required to reach them. A niche market will typically result in higher brand loyalty and stronger word-of mouth growth.
Move into new markets
You are selling your products and services to new customers when you move to a new market. Customers in a new market might be located outside of your current customers’ area or within a different segment of your existing market. This could mean opening up new locations or focusing your marketing efforts to a new segment of customers.
Referring customers to your business is one of the best ways to expand into new markets. Referring customers is the best form of advertising. Referred customers are more likely to convert than those who have not been referred. A customer referral program is a great way to generate word-of mouth marketing. It’s a systemic (and incentivized!) way to get current customers to refer your business to others.
Discover online sales channels
Online sales are a great way for brick-and-mortar businesses to expand their market reach. You can start by creating a website for your business using an ecommerce website builder. Then, focus your SEO efforts and digital advertising efforts to attract customers from outside your business’s geographic area. You can also create a store on an e-commerce platform like Amazon or eBay. This makes it easier for customers and allows them to find your products or services. To expand your digital footprint, don’t forget to use social media platforms such as Pinterest, Instagram, TikTok, TikTok, and Facebook.
Partnership with other businesses
Strategically partnering with other businesses can open up new markets. Although it can be difficult to find the right opportunity, you will eventually find one that complements yours without destroying your business.
Buy a new company
Another way to grow your business is by buying an existing company. You should look for a business that is complementary to yours and in good financial standing. It is important to consider how buying a business will benefit your operation. Will it allow you to access new clients? It will allow you to diversify the product lines that you offer. Is it possible for your company to afford it? These are the questions to ask before you buy.
If you believe you have the ability to create a system that allows others to replicate your success, you might consider franchising. You license your business model and procedures under a franchising model to other people who will then sell your brand products or services. This is a costly and complicated process that can lead to rapid growth.
Research your competition
You might be unsure what to do next when you are considering expanding your business. Check out what your top competitors are doing. Have they launched a new product or service recently? Are they opening new locations? How about their marketing strategy for small businesses? Understanding the trends in your industry can help you see what your competitors are doing and can inspire you to do better.
What does it cost for a company to grow?
Costs for expanding a business depend on what type of business you own and how extensive your expansion plans are. Expanding your product range or buying an existing business can be very costly. However, e-commerce can be a cheaper option than expanding your market or opening a new store. No matter which method you choose, outside financing may be required to cover your initial costs. There are three types of business expansion loans you should consider: term loans, SBA loans, and equipment financing. To find the right fit for your expansion, we recommend that you compare your options in business loans.
This article was originally published on Fundera, a subsidiary to NerdWallet.