Ready for big changes for smallbiz success?
Expansion isn’t something that can be accomplished overnight, and is certainly a step that involves in-depth market research, a strong vision, a solid business operating system, and improved business capabilities and programs. Sustainability is key. Also think about your personal goals and motivations—will this expansion fit perfectly with what you have in mind?
Here are some strategies for your small business, to grow even more this coming year.
SMART STRATEGIES FOR YOUR SMALL BUSINESS
Diversify your portfolio.
This is especially great for spreading the risk as this strategy involves changing up existing services or products to gain more traction and earn more profit from a new group of consumers. Less risky than other strategies, you can play up your strengths and utilise current resources as diversification works well if your new portfolio complements your current roster of services or product inventory.
Backed by market research, you might have the data and insights that you need to confirm that your product or service can simply be sold as different iterations that can crack new markets. Consider BMW’s market segmentation and how each model caters to a different market’s psychographic.
If you’re set on using this strategy, find out where there is big market share opportunity and tweak your existing product or service to cater to that market. You could be selling 2-hour massage with fancy essential oil rubs at a premium and can simply introduce a less expensive 1-hour massage for those who have less time to spare or who would otherwise turn down your offer due to high price points.
Expand your product or service line.
Selling within your existing market meants being in tune with their wants and needs. If you’ve been successfully selling the same product or service and want to increase your profit margins, this is an excellent strategic avenue to take. Also vital is the consideration of the signs of the times, so to speak. Look at your current line up and innovate—small businesses that don’t follow trends or consistently review what their customers are looking for in details will get overtaken by newer, more dynamic competition who is able to keep up.
While you could be a strong leader in your industry, there will be signs and symptoms that your product or service isn’t working as well as it used to or needs supplemental products or services to make the experience more holistic. While a front camera used to be the end all and be all of taking selfies, the addition of the simple yet ingenious selfie stick product is a perfect example of problem solution innovation.
Lower customer satisfaction or early adopters quickly losing interest are some signs that will tell you when you should employ this strategy. If you find that this is the case with your own products or services, as with newer technology and changing customer behavior: You can either supplement as with the example above, or remove your older, outdated products or services and add new ones that will be more in sync with your market.
Once you fill gaps, the added value of what you offer will be an efficient working model for small business success. Your customer base and sales margins will thank you for this.
Develop your market.
This growth strategy, AKA market expansion, is a good strategy for small businesses that are “root bound” and need more space to grow. If your current market is already saturated (both you and competition have already reached all possible customers that can be reached) this obviously means you cannot grow your profits considerably selling to the same market.
The next step would be either to:
– sell your current products or services to a new market—whether via a new store in a different location, or enabling this through your e-commerce platform;
– sell to a different market via a new presentation of your current products or services (finding new applications)
Diet Coke was launched in the 80’s, and it came to light that men shied away from this drink because more women were drinking it. The Coca Cola Company saw an opportunity to develop their market despite and because of this segmentation. Coke Zero, with its shiny black can and advertising campaigns that were the polar opposite of Diet Coke, has now successfully generated a more “masculine” appeal, growing its market with an existing product but with a different approach.
This goes to show how developing markets has a big multiplier effect on profit. This strategy carries considerable risk, especially if this will mean that you will need to open new physical stores, because this involves an large initial overhead and lots of resources spent before you see profit. Gauge your operational readiness and be smart about how to develop your market.
FOR PRODUCTS: If possible, keep your central operations and instead ship your products to your customers, or work with resellers to expand your reach.
REMINDER: Changing strategies is risky because this involves big and extremely stressful changes in how your business is structured. Evaluate your operational readiness before anything else, as applying new strategies can prove to hurt your small business if this isn’t sustainable.
- A caveat: Not all strategies will work for you—businesses and markets in different industries are unique, and it is up to you to correctly apply these based on your motivation, level of commitment, level of risk you are comfortable with, and how ready your small business really is to take on a larger market share. Coping is not enough; only change strategies when you are quite certain that you can take on greater responsibilities and will thrive in this new arena.
FEEL LIKE YOUR SMALL BUSINESS REQUIRES LESS RISKY ALTERNATIVES? OUR CHEAT SHEET FOR SMART TACTICS TO GROW YOUR SMALL BUSINESS MIGHT BE A BETTER READ.
Thanks for dropping by, and hooroo for now!