Growing a startup business into something bigger and more profitable is the goal for many business owners, but how do you make it happen?
We’ve worked with many young businesses and in our experience, the best growing small businesses take the time to design the right strategy, implement it and refine it regularly.
In this article, we’ve put together a list of key things to consider when designing your growth plans. Whether you want to know how to grow a million dollar business or spot fast growing business opportunities, you’ll find practical ideas here to get you started.
Why do businesses grow?
First things first – why should you grow your business?
Whatever business you’re in, making it bigger is ultimately about bringing in more sales and profits. Expanding could give you cost advantages so that your profit margin is higher. If you’re a dominant market player, you’ll have greater pricing power too.
From a risk perspective, getting bigger by diversifying your products or services means you’re better placed to cope with market demand changes, so if orders are falling in one part of your business, you’ve still got sales coming in from another.
With that in mind, let’s get into the factors you should consider when approaching growth.
Are you ready to expand?
How is your business doing right now? Even if it’s profitable, it’s a good idea to benchmark your performance against your competitors’ so you can tweak your products, services or operational processes before launching into growth plans.
What are the different ways to grow your business?
If you are ready for growth, then are you looking to sell more to existing customers or attract new ones?
You can focus on boosting sales to current customers by encouraging their feedback. Having a better understanding of their needs and providing the best customer services you can puts you on the path to repeated business. They’re also more likely to recommend you to their friends and family as well.
But if you want to focus on attracting new customers instead, you could consider:
● Opening a store at another location
● Exporting to an overseas market
● Expanding online
● Establishing a physical store if you’re an online business
● Introducing new products and/or services
There isn’t one best approach that will work for all businesses. However, having a clear plan of who to target and how you’ll reach them will go a long way to achieve your growth target.
How well do you know your market?
Irrespective of who your target customers are, researching the market can offer insight into their needs and important trends so you can tailor your marketing strategy. It’s also a great way to identify business opportunities.
Market research information could come from other businesses, government bodies, trade publications, industry associations and even your customers.
How can social media help a business grow?
Another useful source of market research is social media. By being an active user, you’ll quickly get to know the behaviours of target customers and trends that appeal to them.
Of course, social media can do wonders for profile building too. There are further benefits – you can use it to provide customer service, get their feedback and drive traffic to your website.
How will growth affect your customer experience?
It’s important to keep your customers in mind as you expand because a small business growing too fast can negatively impact your customers’ experience.
So that customer experience is not compromised, you’ll need to ensure you have enough people with the right skills, suppliers that can support bigger orders and sufficient physical space when planning for growth.
Ideally, your business processes should be streamlined so you or your staff have more time to focus on sales and customer enquiries. To this end, you can use cloud accounting software such as Xero to make bookkeeping, invoicing and business reporting simpler and more efficient.
Are you on top of your finances?
A business growing too fast could also struggle to keep up with cash flow because increased expenses often have to be met before money from sales come in. This is why it’s important to manage your finances through regular budgeting and cash flow analysis.
When you’re on top of your finances, you can take advantage of opportunities that come your way and are more likely to be approved for bank loans or other external funding.
Does your business structure support your growth?
Finally, you may need to change your business structure as your business expands in order to minimise your taxes, limit your liability risks or take advantage of government incentives. Contact POP if you’re unsure – our professionals can help you identify the most efficient structure and help you make the right changes.
Now that we’ve discussed the factors to consider for business expansion, here are our ideas on some frequently asked questions around how to grow a business in specific industries.
FAQs
Growing a service business
How to grow a painting/electrical business?
Tradie businesses are more likely to increase sales quickly by attracting new customers. Doing a good job every time is the best way to ensure happy customers spread the word. Being active on social media can really help – upload images of finished jobs, promote special deals and share customer feedback to impress potential customers.
How to grow a taxi business?
Installing a professional website with a user-friendly booking feature will be a hit with both existing and new customers.
Make sure your logo appears on your vehicle fleet to build brand awareness.
Offering referral and promotional discounts are also common ways to expand your client base.
Remember, happy drivers can be great at promoting and communicating special offers.
How to grow a property management business?
Hosting relevant events – like how to be a successful residential or commercial landlord – can attract potential customers and help you get to know existing clients.
You can also attend networking events to expand your list of contacts who may refer business to you.
Consider upgrading your website to include an owner’s portal where customers can log in to see the rental status of their properties. Try to engage with customers through newsletters – if your content is great, they’ll forward it to others.
Growing an online business
How to grow an online clothing business?
Use an email marketing platform that allows you to segment subscriber lists, so you can target users with relevant content or promotions.
Investing in marketing campaigns can be effective in growing your customer base. You might also consider setting up a physical space where customers can try on or pick up orders.
Growing a retail business
How to grow a spare parts business?
For a bricks and mortar spare parts business, expanding online offers a great way to tap into new markets. Make sure you have a professional website that’s user friendly, and include detailed product descriptions and a customer support chat feature.
Consider giving back to the community – this is often a great way to raise the profile of your business.
