Small businesses are startups of an entrepreneur in a small market. If you look at the successful companies, you will be amazed to know that they started in a garage, a warehouse, or a studio apartment. Many know that The Body Shop is one of the most famous and world-recognized skincare brands. But most don’t know is that it was a startup by a mother and daughter who used to make skincare products in their home. Surprisingly, The Body Shop has franchises in about three thousand locations worldwide. However, starting from a small business and expanding it further is a long competitive journey. Therefore, for such growth, every small business needs a business growth plan. A business growth plan includes the growth strategies crucial for entrepreneurs to take in times of need. It has been proved, the startups that ignored assessment and planning stages have received a fatal blow in the market.
Many entrepreneurs ignore growth once their product/service reaches the maturity stage, which further leads to a decline if a strategy is not in place. Nonetheless, it should be the most concerning issue for entrepreneurs. Before devising a growth strategy, it is crucial to analyze the company’s market position.
You often come across such questions when you are making growth strategies like:
- How to attract new customers?
- How to enter the new market?
- What innovation is required to fulfill the customers’ needs?
Businesses can use many growth strategies, such as market penetration, product development, and market development. Further, the use of alternative channels can also provide a competitive edge to the company. The internet has also given an advantage in attracting potential customers. It has emitted the geographical barriers for businesses.
To remove the geographical boundaries and communication problems, companies should hire translators. It provides them with a distinctive advantage with proper communication. There are jobs for translators online, which help companies hire translators for effectively communicating with different audiences. Apart from this, a diversified team will help understand the market potential and tap into unexplored market areas using the following strategies.
- Market Penetration
It is usually the first considered option by small businesses. It is most suitable for a company that is launching a new product in a highly competitive market. With this strategy, they can focus on capturing a reasonable market share. It’s a competitive strategy as small businesses have to deal with competitors and maintain their stakeholders to increase market shares.
- Lowering the prices of products and services: You can attract more customers by reducing their costs.
- Increasing Promotions for products/services: Utilize promotional offers like discounts, special offers, and promotional events. It will not just attract your existing customers but also capture the attention of new customers.
- Widening your reach: Using this technique, expand your distribution channel by finding new distributors, retailers, or dealers.
- Product improvement: You can enhance product features or provide augmented products.
- Market Development
Market development means expanding your existing market. This strategy is also known as market expansion. It is most suitable for businesses who face problems in hammering their existence in the current market. However, the market expansion is not limited to entering a new market. It also includes finding another usage of an already existing product. For example, a product is developed primarily for health and wellness. However, after its reassessment, the product was also effective in skincare. It means the product has followed integration patterns to discover a new market. In this way, the product has not changed, but it has entered a new market.
Another way of market expansion is by entering a new market geographically, called global expansion. But it depends on the company as to how it plans to expand in new regions. The most practiced strategy of the model is a franchise. Today many brands like Walmart, Subway, and The Body Shop use this strategy in growing globally. However, market expansion requires extensive market research for its implementation and thorough quantitative data analysis.
- Alternative Channels
In the present era, the internet and advanced technologies have allowed businesses to sell their products to their customers on various platforms. It provides opportunities for small businesses to compete with more established brands. It has also allowed small businesses to use alternative marketing channels like email marketing, social media, and business websites. Many companies can use other channels to sell their products.
Here are some options:
- E-commerce: The Internet has given small businesses a platform to sell their product online by developing their websites. However, apart from the websites, they can also use other channels like online retailers to sell their products like eBay, Amazon, and Etsy.
- Subscription programs: Small businesses can prepare subscription and membership programs to attract their customers.
- Product Expansion
In this growth strategy, companies tap into a new market to introduce a new product line or improve an existing product. Small businesses can develop or launch a new product by adopting this strategy. They can add new features or enhance the current offering. This strategy is suitable for a business that enjoys changing trends, like in the electronic or automobile industry. However, you can also use this strategy to check whether your old product is becoming obsolete or outdated.
However, if small businesses want to be successful, they need to respond to a market change quickly. Otherwise, by the time they will cope with change, the new change would already turn out.
- Partnerships
Sometimes making a partnership with other businesses helps in the growth of small businesses. There are several ways to achieve strategic alliances like mergers, acquisitions, and partnerships. Joining forces with others gives you a win-win situation as a partnership provides a significant advantage to both parties. Such alliances not only help businesses grow locally but also allow a company to enter the international market.
Conclusion
Small businesses can design their growth strategy according to their business nature. However, every business needs to have a growth plan to flourish and thrive. Researching market trends and consumer exposure can be a tiring process, but it helps with expansion strategies. It gives a clear sense of vision to the R&D department about the needs and wants of consumers. Growth strategies can fail at times, but with proper identification of market variables and the ultimate goal, the probability of the failure diminishes.
