As an established business, a growth strategy should always be in place. While maintaining current business health is a requirement for future sustainability, a clear plan for future growth and the areas in which you might grow is needed from the outset to ensure consistent growth over the long term with small steps.
Obviously some growth needs more than small steps, and some growth is prohibited in certain ways based on industry and government regulation. Growth is also dependant on the financial situation of the company, as well as the competition that the company faces, but while there are many things to consider, it is important to start considering the future of your company right now, regardless of the size or age of your operation.
One of the key factors of growth strategy is market penetration. Small businesses must employ a market penetration strategy to make an impact on the competition and carve out its own market share. For larger companies that are more established, the only way to growth using existing products and existing markets is to strategize a way take a larger portion of the market share for that product. There are several ways to achieve market penetration effectively. Lowering prices is a common strategy, In a market where there is little difference between the competing products, often lowering the price point can increase your market share dramatically. However, this must be a very well-educated leap of faith, as you have to be able to gain enough market share to compensate for the loss of income with a lowered price. Another common way is to acquire the competitors in your space. The more companies you own in the same market, the larger your portion of the market share. Some of the more substantial ways to increase market share take the most amount of care and money. Investing time and training into strengthening customer relationships and building bonds with your customers can produce a loyalty in the market that will make it hard for other competing companies to overcome. Smart hiring practices with effective training to produce stable, smart, educated, and trustworthy employees are also key. In the internet age it is very easy to become well known for high morale and good standards of employment that draw both top-level talent to your company and also increase your reputation with the customer. The two main factors to market share increase are retention and attraction. You have to bring them in and keep them, in order to successfully grow your market share. This is not about customers who have bought from you, but customers who have bought into the idea of you.
Market expansion is a growth strategy that consists of selling your current products in a new market. This is about not taking more of an existing market, but selling yourself to a new market altogether. This is also called market development. A simple example of this is a restaurateur branching out into catering. This brings the same product to a whole host of new income opportunities. Think of NASA developing technology for space travel, but then using those same products for commercial use in everything from radial tires to baby food. Also consider the ease with which a company in this technological time can go from local to global. Perhaps your market share isn’t competitive in Texas, but what if you can sell that same product globally? You may keep the same percentage of market share, but now it’s the same percentage of slice out of a much larger pie.
Product expansion is another way to grow with your company. What new features can you sell in addition to your product, or use to upsell your current product? If you company sells canned pineapple and pineapple-upsidedown cakes are fashionable, can you sell a bundled cake mix and can of pineapple? Product development and product expansion can be a great tool for increasing revenue if it is something that people want. Spending the time on developing new products for the sake of new products may be a costly time waste if nobody wants or needs your new product. Be conscientious of your market, and what they look for. Don’t create a solution and then look for a problem.
Diversifying is one of the big ones for growth, but also one of the trickiest. Adding new products and new services to new markets while keeping your current business can be costly. It can divide the attention and resources of your staff. It can seem disingenuous to your base market. This is your company functioning at peak performance while you essentially build another company entirely. Marketing research is essential in this area. Also look into acquisition, as it may be easier to buy an existing company and merge them, rather than start a new market and new product from scratch.