8 successful growth strategies to expand your business
Wed | December 2022
As a business owner, you must stay ahead of your competitors and keep up with the trends in your industry. As a result, you might need to expand your business and introduce new services from time to time. Doing this will help your business grow and prevent losing customers to your competitors.
The question, therefore, is: what is the best way to expand your business? This article will answer this question, sharing tips to help your business grow irrespective of the economy.
What are 8 strategies to expand a business?
There are several strategies to expand your business and ensure it grows. Below are eigth basic and successful ways to do this.
1. Introduce new products and services
If there are new products or services in your industry that your competitors have already, then introduce them too. However, you cannot just add a product or service because your competitors are offering them; you must stay true to your business.
So, ask yourself what your customers want and if they are willing to pay. For instance, if you run a Mexican restaurant, it would be unwise to start selling Italian food just because another Mexican restaurant is. Chances are the restaurant has patrons asking for Italian food and are willing to pay for it, hence why they introduced it.
After determining the products or services to add, conduct market research to see if your business will make a profit from the additions. Researching your customers' and prospects' reactions to the intended products and services will prevent you from investing money in an expansion that will not yield returns.
Therefore, ask your customers what products or services they would like to see and how much they are willing to pay for them. Also, determine what it would cost to manufacture the product or introduce the service, including marketing and delivery expenses.
2. Market segmentation analysis
Here, the focus is on understanding customer behavior and what influences their buying choices rather than introducing new products and services. Therefore, you have to conduct a market segmentation analysis. A market segmentation analysis helps you understand your customers using physical and behavioral characteristics.
You can use this analysis to know what customers are likely to buy, which helps you create hyper-focused sales and promotions. When conducting market segmentation, use the following criteria:
Gender
Age
Location
Buying history
Income
Education, among others.
You can also add criteria that are unique to your business or industry. By conducting a segmentation analysis, you can identify places you need to penetrate and audiences you need to target more.
3. Market to new customers
When expanding your business, you don't always have to introduce new products or services. Instead, you can increase your customer base by marketing the existing products and services to new people. The target market here will differ from those you've always sold services to.
There must be new segments or niches you have never marketed to, and their locations will also differ. So, suppose you sold to people in your locality alone. When expanding, your focus would be on cities or towns outside where you do business, which would mean rendering delivery services or opening a physical store.
However, this type of expansion involves time, workforce, and capital. Therefore, again, you must conduct market research to determine the locations that require your products and services so that you can channel your marketing to the right places. If you fail to, your business might struggle in the new location if the people there do not need your product or services.
4. Recruit the assistance of other people
Affiliate marketing entails selling your product or service through a third party, who receives a small percentage of your profits. Affiliate marketing may be especially beneficial for B2B companies, as they can leverage their existing customers to share these products with their customers. This is an excellent way to advertise and expand your reach with the assistance of like-minded businesses, bloggers, or influencers. (Of course, you must ensure that these are not direct competitors.) You can try contacting potential affiliates on your own, but make sure you have a process to track link clicks and purchases.
5. Invest in low-cost digital marketing channels
A business expands to reach more people and increase sales. A large part of the expansion would be marketing to attract new customers. If you've always used traditional means of marketing like newspapers and TV, it is time to use low-cost digital marketing channels.
An excellent example of low-cost marketing channels is social media. The usual avenues are Meta (Facebook and Instagram) and, most recently, TiK Tok. With an estimated 4.2 billion users in 2021, social media has more reach than TV, billboards, or newspaper ads. Also, the benefit of marketing through social media versus more traditional methods is that you can pause anytime. With TV, newspapers, or billboards, you have much less flexibility, and the cost is significantly higher.
While there are plenty of marketing agencies, social media ads are simple enough for the most tech-savvy small business owners to dive into on their own. Facebook, particularly has a whole set of resources dedicated to small businesses.
6. Invest in a CRM system
When expanding, you and your staff cannot do everything yourselves. You have to find ways to reduce the workload and streamline processes, and what better way than to invest in a customer relationship management (CRM) system?
A CRM system is software that manages your relationship with customers. It will help you understand what products and services your customers love and if they will welcome new introductions. It is a tool to introduce new products and services to customers.
7. Merge with or buy a new business
Another option for expansion is to merge with another business or buy one. Either one will increase your reach, clientele, and revenue. However, it would be best if you did more than merge or buy any company. First, you must perform due diligence.
Due diligence is researching and acquiring the required knowledge before entering into any agreement or contract with another company. Focus on the company's finances, the strength and capability of its management team, its client base, debt-to-income ratio, and the viability of existing contracts. Also, ensure the business you want to merge with or buy is compatible with yours. If it isn't, you will not get the desired result of the expansion.
8. Investing in your expansion
Irrespective of the business expansion you are considering, you need funds to make it work. Thankfully, at One Park Financial, we can make your expansion dream come through. If you have been in business for three months or more and generate at least $7,500 in monthly revenue, we will pair you with a funder who will give you the capital you need to expand your business. Fill out our online form and check if you prequalify today.
Disclaimer: The content of this post has been prepared for informational purposes only. It is not intended to provide and should not be relied on for tax, legal, or accounting advice. Consult with your tax, legal, and accounting advisor before engaging in any transaction.