Many of today’s giants started as small businesses. Hitch your wagon to a star, as the saying goes.
However, the statistics aren’t too optimistic. According to the Bureau of Labor Statistics data, almost half of businesses fail within 5 years and only 25% of them will still be running after 15 years. And this data basically hasn’t change since 1990s.
Growing a business possesses many challenges and for many, it is too much stress, lack of resources, and sometimes focus. Still, with due determination, some luck, and a good plan, you’re setting a base for success. Let’s look at the common stages that every business goes through as it grows, and strategies that worked for some veterans.
Types of business growth
A business grows when there are new opportunities for extra profit. However, it’s not only about revenue. Assets growing, sales increase, market expansion, and an increase in business value are all metrics of growth, too.
There are two types of business growth:
- Organic business growth happens when you expand your client list or start selling more to existing clients. It is slow as you naturally build your capacities and basically keep doing what you’re good at.
- Rapid business growth happens within a short time due to an unexpected opportunity or a brilliant business strategy. It is more risky and challenging.
The benefits of growing your business are increased revenue and wider brand recognition, which results in fewer expenses for marketing and client acquisition. Besides, big-name clients are more likely to work with big, famous companies.
Stages of business growth
There are certain stages all businesses come through as they grow. Each stage comes with its own challenges, having found a solution to which a business goes to the next one.
- Development stage. It all starts with an idea. You test it by researching the market, gathering feedback from friends and potential clients, and building an MVP.
- Startup stage. At this stage, you have a legal company with developed products and services. The major problem is finding and converting clients. The focus is on survival.
- Survival stage. A business has a more or less defined pool of clients and is working on expanding the list. The revenue is enough to pay for operational expenses, and the company has somewhat grown compared to the previous stage. To keep everything running smoothly, it’s time to make some changes to the company’s business model.
- Expansion stage. The business brings profit, and to maximize it, you have to expand to new markets. The main question is how to grow fast and where to find resources.
- Maturity stage. The business is stable and respected in the industry. Further, it can work to dominate the market. Alternatively, the entrepreneur can choose to exit.
Business growth strategies
It’s vital to keep growing your business no matter what stage you are at. Look at Apple, the tech giant introduces new gadgets every year and always on a hunt for fresh creative ideas and improved functionality of their product.
Another thing to always keep your eyes on is the quality of customer service. Clients equal money, and if they are happy with your service, they will keep coming back. There are a lot of useful blogs and books on this topic for those who seek improvement.
Now, let’s get down to the main business growth strategies!
1. Improve marketing
Most businesses come to a product and a marketing strategy that works best and sticks with them. However, being able to go back and start from scratch can bring unexpected benefits.
For one thing, audiences’ tastes change over time, and one day you may realize your clients do not share your love for your product. For another, you might have missed something the last time you researched the market.
Invest in analysis and research your competitors from their beginning to the current day. What were their successes and failures? Is there something you can use for your case?
Research your clients and churns. What are their preferences? Why do some customers prefer your competitors over you?
Look at the trends in technology. Is there anything you declined as irrelevant to your business? How could it possibly be useful?
For example, ChatGPT has set a new trend for chatbots across all sectors, so it makes sense to consider integrating chatbot software into your daily communication with customers. I strongly recommend HelpCrunch platform for this purpose, as it provides a full set of tools for quality communication with clients.
2. Increase product sales
You can encourage growth by increasing the demand for your product within the current market. Do that by offering your audience another way to use your product. A good example is baking soda. Except for pies, it is good for washing dishes, removing odors, and improving digestion, as some people believe.
Another way is to encourage users to replace the product faster. Making a new, more powerful, or good-looking version of a product every once in a while, or decreasing its shelf life, are among the popular tactics.
3. Introduce new products
This strategy is also called product expansion or product development. Typically, it involves creating several versions of a product to reach a wider audience. Thus, many companies offer premium products or service packages to meet the needs of the luxury market segment.
The benefit of this strategy is that existing clients are relatively easy to persuade to try a new product from the brand they trust.
4. Conquer new markets
Selling existing products in a new market actually has a lot of potential. This can entail expanding sales to a new area or even to another industry. You can partner with another company to add revolutionary features to your product and make it more desirable for those who are not typical users.
This approach requires creating a successful content marketing strategy to build awareness among non-traditional users and help them see your product or services in a different light.
5. Sell new product to a new market
This strategy is riskier than previous ones and can be used along with the existing model.
The risk comes from the lack of experience that a company may have in a new environment. Therefore, it works better for mature companies that have a strong position in their current market.
As a matter of fact, the strategy can be very profitable in the long term. To achieve the best result you can think of collaboration with another brand that has expertise in a new market. There are two ways to do that:
- Related market collaboration. This entails selling products or services that are different from the current ones but share some commonalities. For instance, a company may start sharing its facilities or marketing skills with another company.
- Unrelated market collaboration. This occurs when two businesses start working together even though they share no commonalities. Think Tiffany collaborating with Nike.
A smart development strategy can inspire life into a business that might have seemed stuck. Remember that no business is the same, so you have to try and decide which strategy is the most effective for your case.
Monitor and analyze your growth efforts to see what’s working and what’s not. You’ll want to double on the winning strategy and correct or even pivot on the least effective ones. With diligence and patience, you’ll be out ahead of time.