One of the greatest errors businesses make is not appropriately planning for growth.
There are over 30 million small businesses in the U.S., and approximately 543,000 new businesses are started each month. Of these, only 50% survive past five years. A significant reason why businesses fail is a lack of planning and preparation for growth. Planning is key to successfully scaling any business, providing a roadmap to help guide growth opportunities and reduce risk.
Growth is fundamental to business survival and strategies like market penetration, market development, product development, strategic partnerships, technology adoption and public relations can help increase the odds of business survival, enabling enterprises to thrive by boosting sales and profits. Here are 12 strategies you should consider when planning for the growth of your business.
Increase market penetration
Businesses use market penetration strategies to increase the market share of a current product in an existing market. Market penetration strategies are one of the least expensive growth strategies and depend on a clear differentiation of a product or service from the competition.
Enterprises can attempt to grab market share from the competition by bundling products, offering competitive and timely promotions or discounts, and devoting more budget to marketing and advertising in a target market.
Grow market development
A market development strategy, one of the more common growth strategies, involves selling existing products in a new market. One of the major reasons to consider this strategy is when growth within a current market is stagnated by intense competition. No room for market growth means no opportunity to increase sales or profits.
Market development can be achieved by expanding geographically (i.e., expanding current market boundaries into a new region) or demographically (i.e., targeting a different age group). Businesses can leverage their experience offering a product or service in one market, to help support growth in a new market. For this strategy to succeed, companies should develop an in-depth understanding of new markets, including the competitive landscape in these markets.
Expand product development
Product development is a business growth strategy that involves expanding product or service offerings. Developing related or complementary products or services to add to business offerings is an effective strategy for generating more sales from an existing customer base.
Businesses often employ this strategy in response to changing market conditions, including economic shifts, consumer trends and new technology. For this strategy to be successful, it requires a company to have its finger on the pulse of the target market to determine what product or service innovations will satisfy an unmet need or solve a new problem.
Form strategic partnerships
Strategic partnerships are another common growth strategy. These partnerships can range from an informal client referral agreement between businesses to joint ventures that pool resources involving the contribution of capital and expertise.
In a strategic partnership, a business can take advantage of the complementary strengths of a partner as well as increase product or service offering visibility by exposing them to a partner’s audience.
Invest in public relations
A productive and effective collaboration with a public relations (PR) agency is crucial when growing a business's presence in key markets. Determining a PR strategy is necessary to drive a company's brand awareness and ultimately increase sales. Many PR firms have experience working with startups and can help strategically place companies and their products in front of key audiences, whether that's a hyper-focused trade publication or a national lifestyle publication to reach consumers directly.
The right PR firm can also help a business distribute timely announcements to show company activity, secure interviews between executives and members of the media to garner media coverage, utilize social media influencers to promote a product, position executives as industry leaders and apply for relevant award opportunities to increase brand visibility.
Establish analyst relations
Another business growth strategy is establishing analyst relations. Analysts cover very specific industry verticals so by identifying and connecting with the right analyst, businesses can secure inclusion in analyst reports. These industry reports cover the major companies within a particular market and cover the products and services from these companies. Inclusion in analyst reports can be extremely beneficial to a new business as these reports are often read by investors.
Use social media
Social media sites have become an essential tool for supporting business growth. Companies are using these platforms to improve brand visibility and engage with customers and leads. These platforms allow businesses to connect with target audiences through content such as product updates and highlights of company news and events.
In addition to the organic content, businesses are using paid advertising on social media to gain exposure. Advances in digital advertising on these platforms are allowing companies to target audiences by location, age, income bracket, gender and other specific criteria. With the capability to drill down on particular niches and subsets of customers, companies can better allocate marketing dollars to capture the attention of audiences most receptive to buying their product or service.
Attend industry trade shows
Attending relevant industry trade shows is another strategy that businesses can use to drive growth, expand their presence and reach new customers, clients and investors. There are trade shows for a wide array of industries that bring several entities under one roof. At trade shows, businesses can meet new clients and customers, share their product or offering and meet with reporters and analysts.
Additionally, by applying and taking advantage of the speaking sessions available to attendees at trade shows, company executives can generate brand exposure and new leads.
Adopt new technology
A vital component of any company's growth planning should also include the adoption of technologies to support the strategies outlined above. There are several business software solutions on the market, with many designed to serve a specific industry. Payment technology, digital technologies and business software can all help drive business growth through increased efficiency, enhanced customer service and more effective marketing campaigns.
Take advantage of payment technology
Payment technology can help companies increase growth by providing data and analytics on the value of their customers and information on monthly business trends. Using these insights, companies can establish benchmarks, set goals, control costs and develop strategies for business growth.
More specifically, these systems can track transactions and sales volumes, providing companies with the information to make strategic decisions on offering specials to loyal customers or sending marketing emails to a select group. Payment platforms can also include inventory management functionality that provides detailed customer inventory reports, linking sales activity to inventory numbers to ensure that companies always have enough supply to meet demand.
Utilize email marketing
Email is one of the most effective marketing tools to help drive growth through conversions and ROI for companies. A 2018 study from Salesforce reported that "for every dollar invested, email marketing provides $38 in return or an ROI of 3,800%."
Email marketing can help businesses connect with audiences to promote their brand and increase sales through campaigns that offer relevant, personalized offers to the right consumer at the right time. One of the primary reasons why email is such a useful marketing tool is because people expect to receive information about products and services through this channel. Studies show that 72% of people prefer to receive promotional content through email, compared to 17% who prefer social media.
Install CRM systems
Customer Relations Management (CRM) software is designed to help businesses manage relationships and interactions with customers and prospects. These systems are used for contact management, sales management, productivity and more. A CRM system can contribute to company growth by helping them stay connected to customers, streamline processes and improve profitability.