4 Core Growth Strategies Every Small Business Should Know
Growing a small business into a big company or even a medium one comes with many challenges. In fact, studies have shown, up to 80% of businesses fail to meet their growth and profitability targets each year. The big question becomes “why”. From our own experience the biggest reason why so many small businesses fail to hit their growth targets is because they become resistant to change. This is normal considering the huge amount of time and energy they have spent creating a business model that works. Unfortunately this mindset of “sticking with what has worked in the past” can create complacency and blind spots for their business.
It’s imperative for a business owner to understand implementing a growth strategy is all about minimizing risk to the company. Essential you’re identifying which strategies will provide the best results with the least amount of risk.
Our team focuses on 4 core growth strategies.
The first core area we focus on is Evaluating Operations. Surprisingly this core area isn’t focused on increasing profits but identifying cost savings.
- Evaluating Internal Processes. Businesses lose millions every year due to operational inefficiencies. Many times when we evaluate how a business operates we will uncover a number of processes that are very time consuming, error prone, and many times obsolete. There are 2 ways to tackle this.
- Look to minimize the number of steps needed to execute each process.
- Look to invest in automating key processes through software and mobile applications. To learn more about automating business processes checkout our article What’s the hidden value of your businesses investing in a mobile application.
- Evaluating your team. It’s important to invest in talent and also build a good mix around them. We recommend using a free personality assessment to determine the best mix for your team. This can help reduce conflicts and hire the right employee’s the first time.
- Define Key Performance Indicators (KPI). For example a restaurant might measure the time it takes to deliver a meal to each customer table. Their KPI might be 20 minutes. By keeping track of this, they can quickly and easily determine how successful they are serving all customers. A doctor’s office might measure a patient’s wait time. They could implement a KPI that every patient should have a maximum wait time of 5 minutes after checking in at the front desk.
- Removing the Unnecessary. A difficult area for many businesses is evaluating what’s not selling and removing it. Having key indicators for sales items can help remove some of the emotional connection to a product or service that just doesn’t sell anymore.
The second core area we focus on for growth is Customer Service
- Understanding Customers Needs. It costs six times more to acquire a new customer than keeping an existing one. This is why it is critical to ask customers about their experience and if they have any suggestions. This simple technique can go a long way.
- Evaluating Your Online Customer Service. The fastest way to do this is throught online reviews. The challenge for most businesses is getting customers to actually take the time to write them when they get home. A great solution is RealiReviews, which is designed to engage customers to write online reviews from sites like Google, Yelp, and Angie’s List before they walk out of your door. Online reviews enable your customers to market and sell your products and services for you with a permanent testimonial, and is a key reason why 90% of customers only do business with 10% of small businesses.
- Building Customer Loyalty. You need to figure out a way to create a need for your customers to want to return. Offering a coupon or providing a punch card for something free after a number of purchases is a great incentive for them to return.
The third core area we focus on for growth is Products and Services
- Identify Your Differentiators. It’s critical to determine what sets your products and services apart from your competition. Here are a few questions we ask.
- How do customers identify with your product or service?
- What’s your differentiator from the competition?
- How relevant are your products and services?
- Are you credible and how do you know?
These types of questions enable your business to understand why customers should choose your business over the competition. Here are a few examples:
- Why do people eat at McDonalds? Because they know what they are getting no matter which location they go to.
- Why do people shop at Walmart? Because they know they are going to get the best price.
- Why do your customers do business with you?
- Identify Additional Revenue Streams. As you evaluate your products and services, the question becomes are you offering the right ones and can you add something else easily. For example an electrician might evaluate their company and realize they can include solar panel installations by sending one of their techs to class for a few weeks. This should be a careful process because additional money for marketing, inventory, etc will be needed.
The fourth core area we focus on for growth is Marketing Strategy
- Redefine Your Target Customer. When we ask a business to define thier target market we usually get something like women located in X, age between Y-Z, and income between A-B. We recommend digging deeper to define your target customer, for example Sue a 36 year old single parent of 2 kids in elementary school and works a full time job at a Fortune 500 company. This helps you define what’s most important to Sue like quality, safety for the kids, and convenience.
- Identify Your Market Segment. This means identifying a sub-set of your entire target market which allows you to build a focused sales and marketing strategy around. For example a cleaning company might identify key market segments of new home owners, single parent home owners, and retired home owners. Based on their strategy they might just focus on retired home owners in the beginning because it has the most initial potential.
- Identify Alternative Marketing Channels. This is about finding ways to acquire new customers. The easiest way to measure who you are reaching and converting into sales is through Digital and Online Marketing channels. We recommend reading our article What is the difference between internet marketing and digital marketing for a better understanding.
Every growth strategy is unique to the businesses needs. A big part of determining if it will fail or succeed is determined by how fast the business is able to adapt to change and respond to feedback. The best approach is about changing small and changing often. With a willingness to grow virtually any business will succeed.