Many big companies weren’t always the juggernauts they are today. In fact, most of them started out small. Given time, small businesses can expand their operations and occupy a bigger share of the market. Unfortunately, a very small percentage of this relatively obscure but promising group will grow into huge, powerful, and successful organizations. Contrary to popular belief, small and start-up business owners don’t need a loan to expand their operations even though most of them think that business growth relies on the availability of capital.
Determination, effort, proper planning, and good business practices can help small businesses break out and surge ahead of their contemporaries. Aside from these, entrepreneurs can expand their operations by implementing effective business growth strategies like:
Market Penetration
As an entrepreneur hoping to expand your business operations, market penetration is probably the first and most important step. As you market your products or services, you’ll want to focus on strategies that can help increase your company’s market share. This approach is quite competitive, especially since it means you’ll be facing your competitors head-on.
In a market with minimal differentiation, reducing your product’s selling price could help attract more consumers. Increased promotions in the form of special offers, discounts and rebates can appeal to your current clientele and at the same time catch the attention of those who had no knowledge of your product or brand. Looking for more dealers and distributors is one way of expanding distribution channels and widening your reach. With a wider and more stable channel of distribution, you are likely to reach more users and attain a much bigger market share.
Use Alternative Channels
Compared to almost every other medium, the internet is designed to allow more forms of advertisement. The internet, for example, is not as limiting as television, which is specifically designed for video. The internet has, therefore, opened up more channels for companies to reach their clients and sell their products. With an increasing number of consumers leaning towards online shopping, the internet offers a platform where small and start-up businesses can compete against more established brands.
Entrepreneurs can advertise through social media sites, particularly those that their target audiences subscribe to, or set up subscription and membership programs to help them find prospects and introduce their products to them. By setting up a website or online storefront, businesses can sell to their clients directly. Alternatively, you can choose to partner with retail sites and sell your products through them.
In today’s business environment, mobile internet is another greatly accepted mode of transacting. As such, entrepreneurs should be looking for ways to integrate the use of mobile apps in their business operations. Small businesses often fail due to lack of effort, fore-thought and determination.
Diversification
Entrepreneurs can use diversification, which means targeting new market with new products, to expand their operations. However, you’ll need proper management skills to implement this high-risk, high-return strategy successfully. You will have to find new ways to be innovative, which means putting in the time to work smart. Hiring smarter people is probably the best way to get smarter solutions.
Diversification is akin to starting from scratch, which poses highest risks for both big and small businesses. To diversify, businesses have to research the new market in relation to their new products. Two different types of diversification can be used to expand business operations.
Conglomerate diversification:
You can choose an area that is unrelated and completely removed from your current business operations. For instance, home improvement stores can diversify into the field of beauty products. Although the two are completely unrelated, this type of diversification helps expand the company’s operations, increasing its growth rate and profitability.
Concentric diversification:
In this case, business owners will add products or markets that are related to their current operations. For instance, home improvement stores can diversify to include the provision of architectural services. This strategy is much more synergistic and can help you expand your operations because of the parallelism.
From a management point of view, diversification is one of the most effective business growth strategies when done right.
References
https://www.daveramsey.com/askdave/career/cash-flow-the-dream
https://www.daveramsey.com/blog/how-to-run-a-business-debt-free
https://www.wgu.edu/business/online_business_degree
https://www.businessboutique.com/2014/08/what-you-really-need-to-get-your-business-going/