For a business to do well, to succeed and stay alive, it can’t remain stagnant. It needs to grow. This is especially true for small businesses, as only about half of start-ups and small business won’t even make it five years, and less than that will last ten.
What can a small business do to help it grow and survive? For one, it needs to develop a growth strategy. If a business doesn’t have any plans for its future, for how it’s going to remain sustainable and grow, it’s not going anywhere. Profits and revenue won’t increase, and you’ll more likely than not be losing business instead of gaining business. So it needs to develop a strategy to help it grow. There may be some risk involved, but without taking risks, you won’t get anywhere, and isn’t keeping your business alive worth the risk?
There are many ways to develop a growth strategy, and a business needs to be able to figure out what works best for it, since what works for one company might not work for another. A business needs to figure out what its values are, what it can provide that sets it apart from other companies. It needs to figure out who its ideal customers are so it can focus on them as it tries to grow. It needs to find out what key areas affect its growth and dedicate time and money on them. A business needs to identify what its current revenue streams are and determine if there might be other ways for it to add more revenue in order to make it more profitable and if those new ways would be sustainable. A business should also study its competition and see what they might be doing differently and if it might help it grow or not, and also ask for advice if needed. Focusing on the business’s strengths and playing them up instead of trying to fix its weaknesses can also help it grow. Hiring good employees who are motivated and dedicated can help, as well.
Once these main points about the company have been addressed, other areas of the growth strategy can be looked at and fine-tuned to fit the business. One area is market penetration or increasing the market share of a current product by improving the product or developing a new marketing channel for it. Another area is new product development or offering new products to a current market. Another area to consider is market development or determining new markets for current markets and products. Diversification can also be considered, which would involve developing new products that fall outside of the business’s current offerings and would broaden its portfolio.
Other areas to look at include: forward acquisition, or purchasing companies that stock your products to increase profitability and dominate a market; backward acquisition, or purchasing companies that supply your business, to control the supply chain and decrease costs to increase profit; horizontal acquisition, or buying out your competition.
Choosing the right growth strategy will require thorough research and evaluation, as well as market analysis.
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