Entrepreneurship has never been an easy path and many entrepreneurs would gladly confirm the many sleepless nights they have had especially at the beginning. Determination, perseverance and the strong desire to see their dreams come true play strong parts in keeping them grounded.
Reid Hoffman, the co-founder of LinkedIn once said, ‘all humans are entrepreneurs’. He did not say this because anyone can start a company but because the will to create is embedded in everyone’s DNA and this reaffirms the truth that anyone can be an entrepreneur. Not everyone chooses to be one and the level of success from those who choose to be will be different.
An entrepreneur who aims for success and whose purpose is to change the world by creating jobs and opportunities must put several important things in place; several steps and applications must be undertaken to ensure growth of the business.
A growing business exhibits expansion in several ways. Several metrics and scales have been put together by experts in a bid to measure the business growth and expansion. Some of these are:
- Revenue
- Sales
- Company value
- Profits
- Number of employees
- Number of customers
Growth is quite important for any business that wants to survive and thrive beyond a couple of years. Growth makes it possible to acquire assets, new talent and skills; makes it easy to fund profitable investments while driving business performance and profit. Growth allows businesses take advantage of opportunities and expand products or services offered, attract more customers and increase sales and profit. It allows them employ more productive talents and human power thereby creating jobs, respond to market demands allowing for an increase in market shares and capitalizing on their growing brand, boost business credibility as a lot of consumers will have a more positive outlook on them.
However, for a business to achieve success and thrive in a competitive market, growth has to be strategic. Every business should seek to address and ease particular needs of people. Several businesses with amazing products and great possibilities have failed and on closer examination, they have failed to put effective and actionable business growth strategies in place.
Growth strategies are plans and actions set in motion and implemented to increase the size of a business, thus increasing the profits and market shares of that business. Business growth strategy requires more than dreaming and fantasizing about long-term success. If you do not have a tangible plan and put in the work, you are setting your business as a failure.
Business Growth Strategies
Every business regardless of size and capacity needs a business growth strategy or a combination that works. The method a company uses to expand its business largely depends on its end goal and other external factors like government policies. In essence, the growth strategy that works for a franchise might not work for a start-up company. Start-ups must do their due diligence before settling on what they perceive to be the best.
Here are 5 effective business growth strategies for beginners:
- Market Penetration
This strategy comes to play when a company decides to increase sales of existing products within the same market it exists in. This involves more sales of existing products to current consumers and targeting new consumers within the same market ahead of competitors. There is no need to rebrand or launch new products: simply utilize different marketing strategies.
This can be achieved by lowering prices, offering discounts or bonuses and even looking into new locations or demographics.
- Market Expansion/ Development
This requires selling existing company products in a completely new market. There are several reasons why a company may consider a market this strategy, including the lack of market as a result of stiff competition or the inability to grow in such a market.
- Product Expansion Strategy
This requires a company to keep selling within the existing market but choose to increase her product line to increase profits. A small company may be forced to add new products as older ones become extinct and unwanted by target customers. It will be wise to consider products or services that complement your current ones, thereby allowing you to generate more sales from existing customer base rather than an entirely different product line.
- Diversification
This is when a company comes up with new products and new markets. This strategy can be very risky as it requires careful and detailed planning and research. Marketing research is critical at this point because the company will have to determine if the new target consumers will like the new products introduced. Diversification is great for business growth in that it opens up multiple streams of income to the business.
- Acquisition & Partnership with other Companies
In the acquisition, a company purchases another company to expand its operations. An acquisition growth strategy can be very risky and has to be done right especially as it involves heavy investments. A good reason for this is that the products and market are already in existence and well established in an acquisition or partnership.