Every business owner starts out brimming with motivation and enthusiasm, and yet according to the US Bureau of Labor Statistics, 20% of small businesses fail within the first year. Jump ahead to five years and that number rises to a terrifying 70%. These numbers are alarming, but that doesn’t mean you should throw in the towel just yet. It’s important to put a strong business growth plan in place so that you make it past the first year goalpost and continue to grow. You need to know what to do when your business hits a plateau and how to accelerate business growth so that you’ll see success sooner. Here are five powerful strategies to ensure that your small business grows.
1. Increase Market Penetration
Market penetration means the sales volume of a good or service in relation to its total target market. Increasing your market penetration should in turn increase your market share for the product or service that you are selling. Ramping up your advertising efforts and creating attractive promotional offers are two reliable ways to increase market penetration. Broadening the range of products or services that you offer may also prove effective.
2. Market Development
If your market has been saturated or you’re struggling to attract customers in your local area, it’s time to think about market development. Market development means finding new customers for your current products. This could mean B2B marketing, promoting your products to a different demographic or expanding into international markets.
For example, a spa might consider selling their signature products via a local supermarket or cosmetics store. Similarly, a restaurant owner might expand to offer catering for private parties and business conferences.
3. Expand Your Product Line
Expanding your range of products or services can prove hugely beneficial and make your business significantly more appealing to your target market. It’s a great way to refresh customer interest and generate a buzz that will help to attract new customers, too.
Of course, it could be that you already offer a large range of products. If this is the case, consider taking a look at how much revenue each product brings in and phase out weaker-performing items to make room for new products to excite your loyal customers.
4. Marketing Channels
If your marketing efforts just aren’t bringing in business, it’s time to consider changing the channel. This doesn’t mean abandoning your current efforts, but it’s always worth investigating new ways to reach your target customers.
Most small businesses use email, social media and a company website. If you aren’t already employing these three marketing channels, then it’s time to do so. If you are regularly using all three channels to communicate with your customers, ask yourself the following questions:
- Are the emails clear and engaging?
- Is the website content rich, or does it simply show your opening hours and contact details?
- Do you show up on social media every day, or once in a blue moon?
On top of this, it’s time to consider further expanding your marketing channels. Here are some of the most popular and cost-effective marketing strategies that many small businesses are capitalising on:
- Video content
- Influencer marketing
Market segmentation means dividing your market into various groups and creating targeted campaigns to appeal directly to each group. The most effective marketing is specific, rather than general; you can’t be all things to all people.
You may want to divide your market up by:
Of course, you will need data in order to be able to create the above segments. Email surveys, site analytics and customer purchase history is enormously helpful for this. It may be worth employing a CRM tool to accurately optimise your segmentation process, as this can save you a lot of guesswork and man hours.
If you’re struggling to grow your small business then the above strategies, when employed correctly, should help you to grow at a steady and sustainable rate. Of course, the effectiveness of the above strategies will depend on the needs of your specific business. For example, a business with a large customer base will benefit more from segmentation than one with a few big customers. Take some time to sit down and develop a plan that is realistic for your specific business and monitor your progress carefully to help you optimise growth.