In the last ten years, I have had the opportunity to engage with several small businesses and their dynamic owners. What I have observed is that small businesses have the potential to create jobs, spark innovation, and grow into scalable enterprises. Hence, small business growth is important for a thriving economy.
This video captures the essence of my learnings from various small business owners that i have worked with
If you are thinking of starting a business, you should head over here to find out at what age to founders build mostly successful businesses. Whenever you are ready and feel the urge to make a difference, follow your passion, or provide a solution to a problem that resonates with you.
If you are already a small business owner, you might be seeking avenues to expand further and elevate your venture.
Let’s dig in and find out the seven mantras that can propel your small business to grow into a large one. While you are at it, you should also check out my article on some of the growth strategies that small business owners can deploy while trying to grow their business.
Offer A Differentiated Product
The business landscape today is extremely competitive. If you aim to compete with larger established businesses, including multinational corporations, then your business needs to offer a differentiated product.
When I think of a small business that achieved this goal, Ben & Jerry’s comes to mind. The popular ice-cream brand, which launched in the 70s, started off as an ice-cream parlor. They disrupted the status quo of introducing foods like fruit and desserts into ice cream in a market flooded with standard flavors such as vanilla and strawberry.
They brought playfulness into their products and also named flavors after musicians, comedians, and other public figures. It’s important to ask yourself how your product or service is different from what’s already in the market. Pay attention to differentiation before going big.
Identify A Scalable Customer Base
If you are wondering how to increase sales, identifying a scalable customer base is the answer.
If you are able to identify a large customer base, then there is more potential to build a successful big business. This means that you need to have a product or service that can be used by a large group of people, potentially around the world.
One of the small businesses that started in a small room achieved scalable proportions is the social media platform YouTube. It launched as an online dating service, which did not take off. However, the video technology was so good that the business model evolved into a more mass video upload platform. Today, the platform is expected to reach 1.1 billion users by 2028.
Before attempting to grow from small to big business, invest in market research that predicts how many customers are likely to use the product or service.
Consider Franchising Your Business
If you’re wondering – how you can grow your business faster, here’s an idea that I’d like to share: Consider franchising your business.
This involves partnering with entrepreneurs who establish their own businesses, closely mirroring the blueprint of your original venture. This means your business will have the same brand name and business model; however, it will be managed and operated by individual entrepreneurs.
The franchise model is relevant to specific types of business models, which can be replicated.
The first step is to identify if your business model has the potential to be replicated and if there is a demand for the products and services in multiple locations.
Here is a snapshot of popular franchise businesses:
- Food kiosks/ restaurants/ fast food joints
- Gyms/ fitness centers
- Supermarkets
- Car rentals
- Wedding planning businesses
- Education and training centers
- Beauty salons and spas
- Retail stores
- Service businesses like co-working spaces
- Pet care services like boarding
Brands such as McDonald’s and Hertz car rentals all started as small standalone businesses, which now have a global footprint. I read a recent survey that stated that the United States was estimated to have 790,500 franchise establishments, with McDonald’s franchisees collectively generating $ 113 billion in sales. This highlights the immense potential of franchising as a growth strategy.
Solve A Scalable Problem With Technology
In the digital era, smart use of technology is an important aspect of business growth. If there is a gap in the market, it is more likely that the use of technology can help make the solution accessible to millions of people.
For instance, millions of people struggle with written communication every day. According to a survey I read, a poor standard of communication costs American businesses up to $ 1.2 trillion per year. Today, millions of individual users and businesses use Grammarly to enhance communication. Also, note that the company is constantly innovating; this year they launched their new AI generative tool to keep pace with market needs.
This is how you can use technology to turn a scalable problem into a significant business opportunity.
Don’t Chase Funding Too Quickly
The stories of other small businesses that pivoted can work both as cautionary tales as well as inspiring ones. For instance, I came across the story of Ample Hills Creamery, which demonstrates what can go really wrong in a promising small business.
The company head had built a loyal consumer base because of their unique products. However, in the quest for expansion, they raised $ 19 million within a span of four years, expanding quickly and investing in a factory, which guzzled up funds. A number of their stores were not profitable, and the business soon became bankrupt.
Their investors stopped funding them, and the business was sold. However, the founder’s passion for ice cream was so strong that during COVID, he began experimenting with new flavors.
Together, he and his co-owner unveiled “The Social,” a fresh ice-cream venture born from their collective insights and experiences. They also found an investing partner who was more aligned with their goals. They were even able to buy back their old company, which they run alongside the new one on a manageable scale, expanding both slowly.
This is why I’d recommend that entrepreneurs exercise caution when seeking funding, ensuring they prioritize sustainable growth and financial stability over rapid, yet potentially unstable, expansion.
Leverage The Power Of Influencers
As a small business, you don’t have the big budgets that multi-million dollar corporations have for advertising.
For instance, the business Spanx, which markets consumer-first shapewear, did exceptionally well in this area. A self-funded business, it was founded with $5000 and grew quickly. The founder modeled the product herself at business pitches. Launching when she was 27 years old, she is one of the few faily well known successful business founders who made it big and scaled up.
Early on, the founder sent her products to The Oprah Winfrey Show, and Oprah featured her product in her “favourite things” popular segment. This simple and strategic initiative turned her product into an overnight sensation. There was no turning back after that. Since then, the brand has been made more visible by non-celebrity and celebrity influencers, who have endorsed it in an empowering way.
This highlights the impact that influencer marketing can have for small businesses. It not only helps you reach a broader audience but also establishes trust and credibility for your brand. However, being able to partner with the right influencer may be a decision that needs to be thought through well before committing time and resoures.
Build A Culture, Not Just A Business
A lot of small businesses focus extensively on aspects such as marketing, sales, revenues, and profits but very little on company culture. In this regard, note that negligence of company culture can lead to higher attrition rates and lack of continuity in the business.
Hiring and retaining the right people who understand the business the product, and have a connection to the brand requires strategy and thought. This is even more important when you decide to expand the business. You must be able to have trust in your workforce to be able to expand your business sustainably and profitably.
A survey I came across pointed out that companies with a strong organisational culture saw a 4x increase in revenue growth. This highlights the correlation between a positive company culture and business success.
As we can see, many small business owners have successfully turned their gigs into thriving businesses of varying scales and sizes. I encourage business owners to delve deeper into what exactly their vision is first rather than merely taking a tactical approach toward expansion.
So, before diving into strategies, investments, and expansions, take a step back and reflect on what you truly want to achieve with your business. This will help you chart a clear and purpose-driven path forward.