Setting up a successful business is no mean feat, and neither is taking the next steps toward company expansion. Easy? We think not. If anything, the recent shift towards flexible or blended working paired with the ever-present cost-of-living crisis has meant that small business owners are having to break the mould – within their internal operations and how they appeal to customers alike. If you’re having a hard time of it, you’re not the only one. The good news, however, is that there are numerous small business growth strategies out there that have been tried and tested by the experts, so you don’t have to.
By employing some of the tactics we’re going to dissect later on, you can ensure that your SME is not only surviving, but thriving. It’s all about identifying areas of improvement, where you excel and putting the “scaffolding” in place to ensure that your brand expands healthily and sustainably. And this begins with cultivating a well-rounded understanding of the very principles that underpin small business growth. Let’s get into it.
- Principles of business growth
- Small business growth stages
- 10 strategies for sustainable development
Understanding the principles of business growth
Whether you feel like you’ve hit a brick wall with your progress objectives or you’re ‘buzzing’ to get started on the next phase of your entrepreneurial journey, having a grasp on the various problems and stages that commonly occur in a small business lifecycle will equip you with the knowledge and foresight to deal with issues that arise before they pose a real problem.
You’ll also be able to use this framework to identify your relative position and consider what your next steps should be / whether you’re ready to grow and how to do so sustainably.
The 5 stages of small business growth
Thanks to researchers Churchill and Lewis, and the Harvard Business Review, there is detailed analysis of the early stages of small business development. Their findings reveal a shared trend among small businesses; they tend to experience a sequence of stages characterised by specific traits and challenges, which goes as follows:
Existence
The first stage in this framework is “existence”, which covers the early days of business. Here, the company is preoccupied with the challenges of finding and obtaining custom as well as refining its offering.
Usually, the primary concern will sound something like this: “Can we jump from one or few key customers to a wider sales base? Are our services developed enough to become a viable, longer-term business? Do we have the funds to cover the start-up costs?”
Other key indicators that you’re at this stage are that the internal organisation is simple, with one individual (typically the owner) directly supervising their subordinate’s activities; that the main aim is to stay alive; and that formal planning is yet to be implemented. To grow here, streamlining your processes and refining your offering is key.
Survival
To reach this second stage a business will have proven that it’s a workable business entity via a portfolio of happy clients willing to stick around for your products/services for the medium- or long-haul. Now the major hurdles lie in balancing the relationship between revenue and expenses (yep, we’re talking about encouraging healthy business profits).
At this stage, internal processes are still relatively basic, but there will likely be more staff, greater profitability and another layer of supervision from senior colleagues outside the owner. The business motivation here is still survival, with growth stemming from improved direction.
Success
This is where it gets interesting – the “success” stage. The owner will be faced with the decision between capitalising on existing accomplishments by expanding the business or maintaining stability through a healthy cash flow.
The latter can be maintained pretty much indefinitely if the same attention to detail and care is pumped into the business operations, provided there aren’t any big environmental changes such as the obsolescence of a particularly niche product that knock you off-course.
The former option requires a certain degree of risk and operational planning as measures to finance growth like onboarding new staff, increasing inventory, investing in new technology and taking out business loans are put on the table. This stage is all about looking to the future and strategic planning around resources, lead generation and budget.
Take-off
At this point, the business should be thriving, with growth coming from coordination efforts. The penultimate “take-off” stage is generally characterised by delegation – i.e., sharing workload and responsibilities among managerial staff and external partners – and a healthy cash flow that can withstand the demands attached to small business growth strategies at this level. Small businesses falling under this phase may be decentralised or divisional, often in sales or production.
Resource maturity
The final stage is all tied up with extensive operational and strategic planning. The business must be able to move past any inefficiencies that crop up whilst expanding and invest in the streamlining and professionalisation of every facet of the company, of course, without undermining its entrepreneurial spirit. Again, it’s all in the delegation and robust systems.
Thanks to the efficient management and consolidation of the gains achieved via rapid growth, small businesses in the 5th stage will have the staff, talent and financial resources to take the market by storm.
Small business growth strategies for sustainable development
Now you’re able to identify which stage your small business falls under it will be fairly straightforward to pinpoint the tactics necessary for proceeding to the next.
Below we’re going to give you a rundown of some of the most prominent small business growth strategies that the experts posit as the secret to weathering the storm; that is, the combined challenges of industry change, a competitive (sometimes oversaturated) marketplace and a shifting company structure.
1. Growth mindset: Reframe your thinking
How you go about approaching and diagnosing problems can have a huge impact on your brand’s future. Part of this is down to your self-perception: if you believe that your qualities are set in stone, you’ll be inclined to prove yourself right over and over again instead of learning from any mistakes you make.
In the late 1970s, Carol Dweck coined the term “growth mindset” to challenge this idea of an innate or fixed intelligence and skillset. When you adopt a growth mindset, instead of avoiding challenges, giving up prematurely and seeing others’ success as a threat, you’ll embrace hurdles that come your way and persist in the face of setbacks.
In this way, you’re constantly learning, open to criticism and will actively thrive amid problems. It’s also an effective way of fostering a culture of innovation and accountability, which you can bake into your company’s processes.
For small businesses in the earlier stages of growth that we mentioned previously, this is invaluable. Around 22% of startups fail within the first year and 50% by the fifth, so we can’t overstate how important it is to take issues on the chin, turning them into learning opportunities. Always analyse what went wrong and take pre-emptive measures to deal with them to build up resilience. It’s all about when you’ll succeed, not if.
2. Market expansion: Bringing your products/services to a new audience
When you feel that your profits are stable and large enough to take the steps necessary to get your products and/or services in front of a wider or fresh audience, it’s time to employ a new small business growth strategy: market expansion.
Market expansion (AKA market development) concerns providing your offering to new markets, for instance, another geographical region or a different age group. It’s ideal for developing companies struggling to get a grasp on a particular target audience or facing problems establishing themselves in a certain niche where the competition is fierce.
To get a taste of that sweet, sweet market share make sure to conduct thorough market research including detailed buyer personas. You can then attach them to any marketing briefs going forward so everyone in-house and all the freelancers/contractors you work with can perform to the best of their abilities.
3. Lead generation: Encourage enquiries that convert
It’s all well and good to increase your market penetration and expand into new areas with your offering, but if you don’t reach your intended customer base no one is going to bite. That’s where lead generation comes in.
Put simply, lead generation is the art (or science) of attracting and converting prospects into interested potential customers. Take the time to nurture their interest via a range of mediums and channels and – bam! – you can turn someone who’d never heard of you into a prospective customer with a genuine investment in your brand.
Typically, lead generation occurs through surveys, freebie resources, coupons, live events and online content – this last one meaning that lead generation can be SEO powered! Yep, that’s right. You can accumulate leads by using SEO inbound marketing to your advantage, drawing in users by answering their online queries with your website and keeping them there with quality content.
4. Market segmentation: Rethink and dissect your target audience
One of the foolproof business growth strategies for small businesses involves market segmentation. Sounds complicated? Ignore the jargon.
Market segmentation is as simple as identifying and categorising different subgroups within your target market, allowing you to create tailored marketing strategies for each segment, and it has many advantages. When done correctly, it enhances customer-centricity and improves the brand’s connection with prospects and customers from different walks of life.
What’s more, this tactic is ideal for companies on the smaller side. If you spot and focus on a market segment the larger players have overlooked, you can begin to target them and create a loyal customer base community.
5. Cost-efficiency measures: Streamline processes and cut wastage
As well as looking outwards, it’s important to consider your internal systems and strategy. If you’re seeking to grow, you don’t want any dead weight holding you back.
As a business owner, are you using your time wisely? If you seriously want to expand, it’s important to think about time efficiency from structural changes such as how much time you spend “doing” compared with delegating to streamlining measures like implementing automation where you can.
Even simple things like turning off non-essential electronics outside of working hours and cutting any subscriptions you’re not making the most of can have a big collective impact.
6. Inbound marketing: Attracting new customers
We’ve briefly brushed up against the term inbound marketing and its connection to lead generation, but there’s so much more to dive into. For instance, did you know that inbound marketing propels website conversion rates from 6% to 12%? It also tends to be cheaper than most outbound marketing methods, so it’s a convenient strategy to employ if you’re at that stage with your business where you need to be extra careful about your outgoings.
For those seeking to promote their companies locally, inbound methods such as local SEO, PPC advertising and tailored social media strategy are all effective. The best part of these inbound tactics is that they attract people actively searching for the product or service you offer, meaning that within your content you can dispel any misconceptions, answer questions and engage them further.
Top tip: the most successful local online marketing approaches craft meaningful, authentic and genuinely helpful content for each stage of the buyer’s journey to instil empowerment within their audiences. It’s all about attracting, engaging and delighting them along the way as you carefully guide them down the sales pipeline.
7. Return customer marketing: Getting your favourite clients back through the door
Let’s jump from new customers to existing ones. What’s the best way to keep them coming back? Well, first off, your return customer marketing plans should be built on a bedrock of strong customer service, excellent products and a memorable brand.
You want your clients to look back on their experience with you positively, and to keep these positive feelings front-of-mind you can retarget them via personalised email marketing, social media and PPC ads.
It’s also important to keep on top of your website; take the time to continually improve the loading speed, structure, blog and branding. Incorporating search engine optimisation into each of your pages can elevate a good website into an outstanding one also. After all, a functional website is great on its own, but a good website won’t always get good rankings if it’s not keyword-optimised.
8. Diversification: Expanding your product/service offering
Diversification is exactly what it sounds like: widening your business’ offering to make it more diverse. This strategic expansion into new product ranges, services or markets is one of the best small business growth strategies for minimising risks, seizing new opportunities and increasing your brand’s buoyancy.
Not so sure? Take a look at this: diversified companies in emerging economies outperformed their focused counterpoints by 3.6% in terms of excess returns. This is in part due to their access to numerous revenue streams and the fact that they haven’t put their eggs in one basket so to speak. The numbers don’t lie.
9. Networking: Building fruitful business relationships
Whether you’re a B2B or B2C enterprise, the benefits of networking in your neck of the woods and beyond are not to be underestimated. Whether you join a local business networking group over Zoom or in person over breakfast, these social hubs are ripe ground for making connections that over time can be harnessed for growth.
Many professionals subscribe to a “Go-To-Network” strategy. This is a tactical approach by which business owners leverage their networks – partners, customers, colleagues, communities etc. – to build authentic, deep-rooted relationships that spur growth. The main advantage of going down this path is the increased level of trust between you and your prospects. Excel and you might find yourself with new partnerships and return customers by your side.
10. Outsourcing: Share the load with external professionals
Finally, it’s a good idea to look into the elements of your operations that can be outsourced cost-effectively. When your business is gripped by structural change, the last thing you want as a business owner is for your time and attention to be taken away from the important decisions.
While it’s tempting to have a hand in each facet of the company, few realistically have the time, experience and resources to be so deeply involved during a time of growth and expanding customer base.
You may, for instance, want to consider outsourcing your web development and content marketing, so you can bring more people to your site whilst freeing up your own time.
As we’re at a major inflection point in the marketing world; content strategy, social media and sales are all going through a transformation as consumer trends continue to evolve and fluctuate. As such, relying on the expertise of a specialised agency provides not only top-notch results but also a reassuring peace of mind.
Onwards and upwards
With these small business growth strategies in tow along with the proper planning around their implementation, taking the next steps for your company will be a hell of a lot clearer. Use the creative vision, drive and passion you’re already demonstrating in other parts of your business, and you’ll be as right as rain.
When any setbacks do happen to put a dampener on your progress, don’t be afraid to return to the drawing board with a fresh set of ideas and the data you acquired along the way for analysis. If you really are struggling with achieving everything you have envisioned, rest assured that there are swathes of friendly professionals out there poised and ready to help you out – the digital marketing pros at WebHummel are just a handful.
Want some additional small business advice? Then give us a ‘buzz’.
