Small business growth is a complex subject that touches on many aspects of the business as well as the business environment. After having spent more than a decade working with various small businesses, medium sized companies and large corporations, here are some of the most important factors that I have learnt to be key drivers of small business growth.
Business Growth: Building a Sales Funnel for Small Business Expansion
Business growth is indeed the heartbeat of every small business. It is what defines the success of your business. One of the first articles I wrote on this website is why small businesses should grow revenues every year.
But just like any other process, driving business growth needs a well-planned and clearly defined growth strategy.
The first stage in this journey is building a sales funnel for small business expansion. It allows you to manage the process efficiently.
A sales funnel is not just a strategy but an indispensable component of your growth plan. It is the most basic day-to-day business management process that all successful businesses fall back upon to drive revenue growth and business expansion
A sales funnel tracks the journey through which a customer typically goes through while purchasing your product right from discovering you till the final purchase.
It allows you to understand your customers better, their purchasing behaviours, preferences, and expectations. It helps you take the markets pulse and tailor your products to meet your customers’ needs, therefore driving your small businesses to the next growth stage.
A sales funnel typically has the following stages at its most fundamental level
- Awareness Stage
- Interest Stage
- Consideration stage
- Intent stage
- Evaluation stage
- Purchase
To understand more about how small businesses can build a sales funnel, you can read my article on how to build sales and marketing funnels for small businesses here.
What is the main factor that influences the growth of small businesses?
Primarily, what drives the growth of small businesses is their ability to create products that resonate with their target market. It’s about understanding the existing market dynamics and injecting a unique flavor into your product that enhances your brand’s value proposition.
Once your product is appealing and provides a solution, customers will naturally gravitate towards your company. I have covered the foundational steps to do this in this article that talks about strategies for small businesses to increase their sales.
Product-market-fit which is an outcome of developing products to solve your customer’s problem is the necessary condition for a small business to drive growth.
Events present a fantastic platform to showcase your products. You can use these events to gain free marketing and increase brand awareness. Therefore, planning to create and participate in more events should be part of your business expansion strategy.
Understanding your cash flow is vital for any small business owner. Profit from the sales of your products should be reinvested back into the business to fuel growth. Maintaining a healthy cash flow ensures all operational and development needs are taken care of, thus driving growth.
I have a comprehensive article here on how fast small businesses in different sectors grow depending on if they reinvest their profits back into the business or not. You will be able to see that small business that reinvest excess profits back into the business, have a higher rate of growth over the long term.
But, the growth strategy does not stop at managing cash or diversifying products. The people driving the business growth need to be trained to effectively carry out their roles. Investing in training your small business’s team not only bolsters individual productivity but also has the overall effect of driving company growth.
Maintaining a constant line of communication with customers is another avenue that owners of small businesses should exploit. Email marketing, for instance, keeps customers in the loop about your products, upcoming events, or any business updates. A well-crafted email can create a surge in sales, driving growth for your small business.
To execute your growth strategy effectively, planning & review of the plan is crucial. Consider conducting a management review to assess the performance of different areas in your business.
This component is regular reviews is a simple but very effective way of course correcting the business to ensure that it steered in the right direction. Regular reviews also give business owners the ability to adapt and make changes according to fluctuating market conditions.
Additionally, diversifying your products and exploring new markets offer an excellent avenue for company expansion.
To sum it up, the following factors have a direct influence on the growth of a small business
- A product that solves a customer’s problem
- Reinvestment of excess profits back into the business
- Getting the right team in place and training them
- Maintaining a consistent communication with your customers
- Regular review to make sure you stay on track
How to Grow Your Company: Focus on Established Revenue Sources and Business Growth Strategy
Small business growth is often driven by a solid business plan and a robust growth strategy. To excel and grow your company, focus on established revenue sources and learn from them.
The business would have spent a considerable time and effort in figuring out what works and what are customers willing to pay for. This is the first place to start when a business wants to drive growth. Double down on sources that are currently working and expand outwards to adjacencies.
It’s your business’s lifeblood, sustaining your team and fuelling future initiatives. It’s a fool-proof way to avoid the common pitfall of spreading your resources too thin.
Tend to your existing customers
Every successful strategy begins with an understanding of your top products or services. As a business, you’ve likely spent considerable time developing these foundations, so why not leverage them? There are some strategies which small businesses should use while leveraging the established revenue source
- Optimise the existing sources – Understand customer preferences, make marginal improvements
- Try to increase customer lifetime value – Can you create more value over the long term?
- Refine marketing strategies – Make it more personalised and refined
- Diversify your offering for the same customer profile – give them more options
- Use technology and data wisely – let data inform and guide all decision making
Lets look at some of these in more detail
Diversify your offerings to existing customers
For small businesses, expanding into new markets often involves exploring new services and products. However, a business’s core offerings could hold untapped potential. You see, expanding your business doesn’t always mean starting from scratch. Frequently, it involves doing more of what you’re already good at.
What existing products or services have been successful? How might they be improved or scaled up? This might involve enhancing your team’s skills, investing in new equipment, or streamlining your development process.
Your company has already weathered the early stages of small business, proving it has valid components in its strategy, team, and services. To ensure your business continues to grow, enhancing these elements is crucial.
Deliver more customer lifetime value
However, growth is a two-way street. While it’s important to drive revenue, remember that your aim should also be to deliver value. Value leads to satisfied customers, which in turn, attracts new customers, contributing to your company’s growth.
Established revenue sources are the backbone of any business. They fund your operations and support your business’s development. When paired with a sound growth strategy, they can fuel your company’s expansion. Simultaneously, free up resources to explore new opportunities.
Part of fostering growth is being strategic about where to invest. Expand the scope of your successful products and services by identifying new markets, building up management, and expanding the size of your team.
The more opportunities you have to grow, the better your chances of success. Your business holds vast potential, use this potential to expand, increase your revenue, and reach new heights. With your growth strategy and team in place, explore new territories and push the boundaries of what your business can achieve.
Invest in technology and data as an insurance to growth
Lastly, don’t shun the help of tools and resources at your disposal. Use insights from your team’s experiences, existing data, customer feedback, or professional consultancies to improve your products and processes.
Through your growth journey, remember to celebrate your achievements and milestones, large or small. After all, it’s the small wins that keep us motivated and hungry for more. So take a moment to appreciate your company’s evolution, from its humble beginnings to its continued growth.
Types of Business Growth: Market Penetration and Growing the Company
If you’re asking yourself “What fuels the drive to grow at all costs in small companies?”, you’re not alone. Many entrepreneurs and managers are always looking for the elusive secret that will enhance the performance of their businesses, market penetration strategies included.
Let’s take a moment to evaluate different types of business growth and see how they can help small businesses grow and mature.
Market penetration is a strategy that can drive business growth enormously. This strategy includes growing the business within its existing markets by attracting a larger share of customers. It focuses more on selling existing products to existing markets.
It’s an important stage for many small businesses, and it’s often the first step to expanding a company beyond its initial customer base. It lets businesses explore the practicality of broader growth plans, and it can also be a significant boost for a company’s cash flow.
In addition to market penetration, there are other strategies that many small businesses deploy to grow. I have an article here outlining the 5 basic growth strategies that should be used by small business owners.
Isn’t it thrilling to see your small business progress and grow? When businesses grow, they generate more profit and create more opportunities for everyone involved. Small businesses hold a special place in our market dynamics. They serve as the heart of our economy, driving growth and creating growth on all scales.
How can you, as a small business owner, drive growth in your organization? One of the key steps is to understand your market thoroughly. You need to identify your customers’ needs and wants, and develop a product or service that meets those needs.
Companies that focus on deepening existing relationships win big
Strategically, the development of a small business encompasses various stages. Each step requires a unique approach, a different strategy. Balancing between focusing on existing customers and expanding into new markets is often challenging for many small businesses.
But remember, every large company started as a small enterprise, and growth is a step-by-step process. I have a detailed article here on how a small business can grow big, that outlines definitive steps that small businesses should take in order to grow.
The clarity of the company’s vision directly impacts the direction of its growth. A clear and compelling mission will entirely penetrate the team’s consciousness, and instill a driving force that propels the company towards its growth goals.
Every company’s journey is unique. The key to creating a successful growth strategy is in recognising the right time to shift gears. Stage transitions are tough, but they offer companies the chance to reassess their objectives, capacities, and markets. Is your company prepared to take those bold steps? Your answer to this question will ultimately determine your business’s future.
Growth and expansion plans cannot afford to be vague or ambiguous. They must be specific. Interestingly, not all growth comes from launching new products or breaking new ground. Some small businesses find it highly beneficial to leverage existing capacities more efficiently. This might involve optimizing internal processes or simply improving the products already in the market.
Finally, remember the age-old wisdom: Rome wasn’t built in a day. Your small business might not turn into a big corporation overnight, but with the right strategies and a vision, you can experience tremendous growth.
The ambitious drive to grow, coupled with a well-executed market penetration strategy, can open doors to rewarding business prospects, creating endless growth possibilities. Remember, the journey of a thousand miles begins with a single step.
How to Grow a Business: Maintain Growth Through Training, Marketing and Automation
Bolstering the growth of small businesses is no small feat, but with the right strategies, it’s not only plausible — it’s possible. A myriad of aspects come into play here: innovation, marketing, automation, and more. And these are some of the most vital steps to take to ensure that this growth becomes substantial and persistent.
A wise man once said “innovation is king“. And in the realm of small businesses, this couldn’t be more accurate. When businesses start, they do so with fresh, innovative ideas that they believe will make a mark in the market. But for actual growth to happen, this innovation needs to be consistent.
Small businesses are best positioned to innovate in go-to-market strategies where they are not bound by corporate and legal bottlenecks that large companies face.
Another essential step is training. It’s not enough to hire great individuals; businesses need to educate them about their specific products and services. Training helps teams understand what the business is all about, and this understanding propels them to work better — both individually and as a unit.
So, without a doubt, offering extensive, continuous training to your team is crucial when you’re looking to leverage your small business’s growth.
Marketing, on the other hand, is about telling the story of your product or service to the masses. In the digital age, marketing tools such as email have become increasingly omnipotent.
They give businesses an effective way to reach out to their existing and potential customers, highlighting their offerings and building relationships. Thus, businesses should continuously learn and improve their marketing strategies to aid their expansion.
Automation is the last big piece of this growth puzzle. It can drastically reduce costs, streamline processes and expedite growth. As businesses grow, the volume of tasks that need to be executed simultaneously can become overwhelming.
Manually handling these can be inefficient and prone to errors. But with automation, a bulk of these tasks can be done reliably and efficiently. It’s important for small, growing businesses to understand that automation isn’t just for big companies. Even small businesses can harness its power for maintenance and expansion.
Some of the key areas where small businesses should look for automating are
- Pay roll processes
- Accounting processes
- Payment collections
- Order tracking for e-commerce
To sum up, growth in business doesn’t come overnight. It takes a deliberate strategy, consistent efforts, and ongoing adaptation. With the right focus on marketing, innovation, training, and automation, small businesses can chart an effective path toward organic growth and expansion. It’s time for small businesses to step up their game and truly unleash their potential, bearing in mind at all times