As an entrepreneur, you should be developing a growth strategy for your business for its first 5 years in operation. For this reason, I love start-up stories and I take inspiration from them when I talk to my clients.
There are many reasons to pursue business growth. With upward movements comes greater brand recognition, increased sales and greater market stability.
What's a growth strategy?
A growth strategy is a long term approach in business that aims specifically at increasing an organisation's market share.
Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition.
For young start ups, these traditional methods of pursuing growth may need to be modified as technology and competition is changing the landscape that we operate in.
So let me explain each of the growth strategies above and how they can be applicable to your own business.
1. Market Penetration
This is a growth strategy for businesses that have been in operation a while or a company who has seen its sales plato. This strategy as a means to grow your business involves selling more of your product and service within your existing clientele or within that customer profile. This may sound difficult to many entrepreneurs as one might say well how can I get people to buy more or me.
For the boutique side of my business, I am definitely adopting this strategy in order to grow my organisation, and there are a number of ways this can be achieved. Price adjustments, increased promotion and new channels of distribution can assist in ensuring this strategy is successful. Let's take for instance you are a jeweler and you make one of a kind pieces. To get more of your product in the hands of the clients that are likely to buy it will mean you need to be more accessible to them. You should therefore set a target to get your jewellery pieces in more retail stores. Simply make a list of the jewellery stores that you like and that you feel support and represent who your brand is and reach out to them to get your products featured in their stores. Offer some after sales support such as regular visits to their stores and an offer to speak to potential customers at their locations. This can go a long way to building your brand and growing sales.
2. Market Expansion
In marketing and business theory this is also known as market development. This involves selling your existing products in a new market. As distinct from market penetration, the concept here is to find completely new customers who will buy your product. This strategy will take some research initially to determine how your product will satisfy a different clientele and will also involve you developing a new customer profile for this group ( market segmentation).
Many businesses also attempt to pursue this strategy when competition is great. In Trinidad, the food industry, retail clothing and beauty are fairly suffused and as a result, owners need to look for new customers for their survival. There is a good example of this in Trinidad where a very popular make up artist has been selling her make up course regionally, and has expanded her brand and business this way. She has been able to service a whole new clientele in this way all the while growing her credibility and visibility.
3. Product Expansion or Product Development
Product expansion also known as product development looks at modifying existing products, adding new products or extending the existing product line of your business and offering this to your existing customer base. For service based organisations this may take the form of improved levels of customer service or improved delivery times. A good product example in Trinidad is Hand Arnold's Moo milk. When this brand was originally introduced to us, we knew it simply for its full cream and low fat milks. Now the Moo brand has extended to evaporated milk, condensed milk and chocolate milk.
The final two growth strategies - diversification and acquisition are more suitable for medium to larger firms that have the financial capacities to invest in these areas. These growth strategies are perhaps the most risky and do require a desirable amount of research before diving head on.
All in all, if you want to remain and compete in business successfully, it is important to identify one or two growth strategies and develop a plan to make things happen.
For most business owners today, in order to see any kind of increases in revenue setting growth as a company objective is crucial. By developing strategies that are focused on growth, companies can increase their market share and improve brand awareness, which should all translate to greater profits.
Does your company need help with business growth?
Then call us today to get started and to find out more about growth strategies and how you can use them in your business please have a read at the link here.
ABOUT THE AUTHOR:
Debbie-Ann Jollie is a marketing communications executive with more than 10 years experience creating marketing strategies and promotional campaigns for a diverse array of corporate clients and first time entrepreneurs. In her not so spare time she likes writing blogs for her boutique, sipping on Jack Daniel's honey ('cause vodka gives her a headache) and taking naps on Sundays.