Some businesses are content with staying small and breaking even at the end of the year. However, most entrepreneurs wish to see growth.
The world is constantly changing, from the rises and falls in the economy to the public’s tastes and interests. Whether the dream is to someday become a Fortune 500 company or just to expand your mom-and-pop catering business, attaining growth takes consistent effort.
So what can you do to help your business grow?
Regardless of which of the next four steps your business chooses to take, this first step is vital.
As they say, ‘information is power’ and ‘knowledge is the key to success’. If you want your business to grow, you need to stay as informed and knowledgeable about anything and everything that has to do with your field as possible.
Study your competitors, get to know their history, figure out how they got to where they are and what sets them apart from everyone else. Look for ways that you think you could offer your product or service better than the competition does. Study the market, try to understand and even be comfortable enough to predict the behavior of your existing and future customers and/or clients. This includes paying attention to trends in customer complaints and feedback.
A quick tip: A great way to reinforce existing relationships with customers, clients, employees, partners, and so on is to use thoughtful, personalized corporate gifts. They help your customers keep your brand in mind… And it will show that you value your customers and this will improve your business’s reputation.
It’s easy to simply say that there is no time to study and research while running your own business, but time can always be made by prioritizing it for a brief time. Your business will benefit immensely from this new knowledge.
Even if you have someone else, or an entire department, that handles these kinds of responsibilities, you should always strive to know more about your business and field than anyone that works for you. This way, you can effectively lead the conversation on the best steps to take towards growth.
A low-risk method of growing your business is through market penetration. There are several ways a business can go about trying to increase how much of your product is being sold in comparison to your competitors:
1. Lower prices or offer discounts. Often, all it takes is a lower price for customers to choose your product over another similar (or identical) one.
2. Expand or change promotional efforts. Launching new and improved advertising campaigns, especially ones that offer exciting new discounts, can easily garner more attention for your product. Seasonal campaigns also do really well to boost sales. For example, Coca-Cola sales benefit from its annual holiday ads featuring polar bears, making their soda a popular staple for the season.
3. Create alternate channels of distribution. Sometimes, just giving customers more ways of accessing your product can make all the difference. These could target a specific audience with a unique message to fit each intended market. For instance, if you have a physical store, you could try launching a website with its own catalog and perhaps even its own special prices.
If you feel that there is no more that can be done within your existing market with your products, the next step would be to update products, add to existing product lines, or create new ones.
A business may even be forced to do this if the original product offerings become outdated or outmoded.
This can work within the existing market as long as the new products still serve the same or similar needs as the original.
Once again, Coca-Cola proved themselves to be growth masterminds when they released the cherry and vanilla flavors, and once more when they began printing common first names on their cans.
Expanding the market is a great step to take if your business can do no more to expand within its existing market.
Find ways to get your existing products to people who may or may not usually be interested in them or have access to them. In theory, if you sell skincare products in brick-and-mortar locations, you could reach out to local hotels, spas, or even Airbnbs, and offer bulk discounts to make your products part of their ongoing services. This is an easy way to get publicity for your product lineup.
Coca-Cola used this method beautifully when they rebranded Diet Coke (created in the ‘80s and geared more towards female customers) as Coke Zero which was ‘new’, came in a sleek, black can, and appealed to a wider consumer base.
Diversification is selling a new product to a new market. If you feel you have grown as much as possible with your current product and market, this option may best for you to focus on.
There are two basic ways to go about diversification:
The first is related diversification which is selling a new product that is still related to your original product to a new market that is similar to the original one. This would be the more natural and low-risk option to take.
Coca-Cola used this method when they observed a dip in demand for soft drinks, an increase in demand for health drinks and subsequently acquired the company that owns the famous Vitaminwater in 2007.
The second is unrelated diversification which is exploring products and markets that share very little similarities with the original products and markets. This is a riskier option that would require extensive research as it would be dissimilar to much of the previous knowledge and information you may have.
Coca-Cola also used this method first back in 1981, when they purchased Columbia Pictures (producing such films as Ghostbusters and The Karate Kid). Also more recently the company employed this strategy when they started offering official merchandise including a great variety of products from Christmas tree ornaments to clothing items, all featuring the iconic Coca-Cola logo.
Your choice for which of these paths you focus on should depend on how much capital you have at your disposal, how much work you are willing to put in, and how much risk you are willing to take. You should take some time to think about which fits your business’s specific context and work from there. Do you have any strategies that worked to improve growth for your business? Let us know in the comments below.