After a period of initial growth, your business may reach a plateau. You might have a good customer base and a steady stream of revenue, but keeping the momentum to expand your business further can be challenging. There are many reasons that growth slows down, whether it is saturation in the market, additional competition or a lack of capital to invest in new innovations.
Whether you’re a small business of 15 employees or a corporation of 1,500, taking your company to the next level requires a serious strategy for business growth. Every organisation is different, but the principals of a business expansion strategy remain largely the same.
The way you measure your company’s growth depends entirely on your business goals. What growth means for your business could be very different to what it means for someone else.
Common metrics for measuring business growth include:
Number of employees
Mergers and acquisitions
New stores or offices
Expansion into new markets
Your business expansion strategy could include a mix of the above with additional measures thrown in. Once you’ve defined your business goals, you can begin designing a scale-up process to achieve them.
Business growth strategies
There are four main types of business growth strategies highlighted in the Ansoff Matrix, a strategic planning tool for business expansion:
Market penetration: Increase your market share, whether it is by lowering prices, hiring new staff, or increasing your budget for advertising and marketing.
Market development: Seek new opportunities by targeting customers in a different region or country.
Product expansion: Launch new products or services based on what you already know about your market.
Diversification: Launch new products or services in a market that you don’t currently operate in.
How to make a small business grow
The following tips will help you scale-up your small business, so you can start taking advantage of new opportunities:
Track your monthly sales to understand seasonality and diagnose any issues early on.
Review your profits every quarter and create a plan to increase them.
Set a realistic growth percentage as a target for the next 12 months.
Increase sales to existing customers, by delivering exceptional after-sales service or offering promotions that encourage repeat business.
Focus on turning leads into conversions by understanding what is preventing purchases.
Give your existing customers an incentive to refer new customers.
Train your staff to encourage their professional development.
Assess how your competitors position themselves and track their developments.
Market your business online to stay ahead of less tech-savvy competitors.
Work with a business mentor or a specialist agency to benefit from a fresh perspective.
Carry out research into new markets to see if there are any gaps you can fill.
These principles are worth following for companies of all sizes, but if you are a medium-sized business with a good grasp of the basics, you should seek to harness the skills of senior management to develop a solid expansion strategy.
Bigger businesses should continue with regularly reporting and planning every quarter, and implement a sensible strategy to add more staff and infrastructure.
It also worth having an exit strategy in mind, whether that is passing the business onto a family member, selling assets or becoming acquired.
How to grow your business online
The internet provides an incredible source of potential new customers for your company. You can ‘sell’ your products or services while the business is closed, take advantage of free marketing opportunities, and work towards achieving your business goals without as many overheads.
If selling online is right for you, the following steps will get you set up for success:
Invest in a well-designed website, where people can buy your products with confidence or book your time and services.
Work out strategies to reach your target audience, whether that’s launching an Instagram page or paying for targeted ads that appear on the side of a business buyer’s LinkedIn page.
Use free online marketing methods by getting active on social media, writing blogs and optimising your website for search engines.
Set up an ability to sell products online through websites like Amazon or eBay.
Offer online subscriptions for your services.
How to expand your business into new markets
Expanding your business into new markets typically means one of two things:
Selling your product to a different market (e.g. moving from selling your software product to IT managers in the UK to IT managers in Germany)
Selling into a different customer demographic (e.g. moving from selling your haircare products to professional women in their 20s to mums in their late 30s)
How do you expand your business into these new markets? Here are some simple steps to follow:
Clearly define the market you want to expand into.
Carry out thorough market research so you understand key competitors and the challenges you will face.
Review your current capabilities to establish if you have the staff and skills required for the challenge.
Create a plan for entering the market, from acquiring competitors to growing organically.
Know how to grow your business at the right pace
Knowing how to grow your business at a rate you can sustain means you avoid becoming a ‘zombie’ company which does just enough to survive. As you expand, you also need to make sure you are prepared for any problems that may arise, whether it is injured staff, damaged property or court cases.
Business insurance from Towergate
Learn about our business insurance, which we can tailor to your needs – whatever size you are, and however big you want to be. Let us know your profession and we’ll put you in touch with a specialist team for a business insurance quote.