Growth is always a top priority for any business owner. After launching a startup or store, the company figures out how to keep it running. When that happens, the focus then shifts to growing the enterprise.
As an entrepreneur, you’re either one of two things. One, you’ve got a well-formulated strategy for increasing profit yearly in the next decade. Or two, you’re still trying to figure out how much percentage of revenue needs to go up annually and what needs to be done to make that happen.
The Value of Growth
Growth is essential for every company, regardless of its size. It is necessary if a business is to survive and thrive for a long time.
Operations will grow stale without periodic growth. And this can lead to a host of issues like lowered quality standards and poor employee morale.
A growing, financially secure company is less threatened by competitors. That company, too, often enjoys market dominance and can negotiate large-scale purchases favorably.
Effective growth wards off the potentially adverse effects of fluctuations occurring in the marketplace. Plus, a growing company’s high profile often appeals to the most talented job seekers out there.
Reading the Signs
They say "timing is crucial" in growth planning. Of course, your company needs to be ready to take the next step at the right moment. When the time isn't right, investing too much energy, money, and other resources into your business could lead to disaster.
But what does it mean by timing? By checking websites and publications related to your industry, staying up to date with the local and global economy, and networking with others in the same industry, you can find the perfect timing. Here are some of the indicators that signal the best time for moving toward growth which business owners pay close attention to.
- When two companies within the same industry merge.
- The products you sell grow in popularity and new entrants (competitors) seem to be entering the market.
- When other companies put up barriers to entry to prevent rivals from entering the same market.
- The level of sales begins to decline, although most of the time by the time your business enters the decline stage you may have missed the window of opportunity. Still, it is never too late.
A Growing Industry
Is your industry poised for growth? If the answer is yes, then now can be an excellent opportunity for your business to grow along with it.
If you deal with houses, run a bed and breakfast, or sell apparel, the time is certainly ripe. A Fundera report has identified real estate, hospitality, and consumer retail as three of the fastest-growing industries in the United States.
Do you offer pet products in custom packaging? Then you’re in luck because the industry catering to furry and feathered companions is expected to grow exponentially within the next five years.
Statistics show that the pet care market, currently valued at $261 billion, will catapult to $350 billion by 2027.
Steady Cash Flow
Make sure your company is in a good place financially when preparing for growth. That means having a loyal customer base and a few years of steady revenue. Your brand should also be attracting new customers regularly.
Before taking any significant steps, you should have a few years of regular income and a steady flow of new customers. Finance leader Paco de Leon says that “a consistently growing base of people who want to be customers” is a great indicator of demand. The founder of The Hell Yeah Group, a financial firm for creative entrepreneurs, says that more people coming in will allow a company to grow more sustainably.
Customers Want More
When a company is dealing with more business than it can handle, it is a good candidate for growth. That being said, you should never take sudden spikes as an indicator that demand is high. Remember, this could just be a fluke.
The key is to make sure that you have a consistent demand that you can supply. Pay attention to what your customers want. Are they looking for other items than what you’re offering? Is there a specific product that they want to see in your catalog?
If you aren't selling online already, launching an eCommerce website is a great way to expand your reach cost-effectively. Even a simple eCommerce storefront can allow you to reach and engage with a large number of customers. Over time, your website analytics can help you make smarter purchasing and marketing choices as you can see at a glance what's selling well or what areas you can invest in for maximum growth.
Talk to your customers and get feedback on what they want. While doing this, look for patterns in the responses you get. It’s a good sign when loyal shoppers want more of your product or faster delivery.
Tips for Growth
Successful entrepreneurs know the following principles to grow their businesses sustainably.
Do Your Research
Market research should be the first thing you do when growing your small business. The purpose behind this essential step is twofold.
You gain a better understanding of existing customers’ buying behavior and preferences and insight into what potential buyers might like to see.
It’s crucial to know your target market and what their needs are. The information you gather will then guide your enterprise towards a direction that will be able to meet those specific needs.
Don’t just look into your target audience. Find out what your competitors are up to. Their strengths and weaknesses will inform your decisions and allow you to scale your business appropriately.
Hire the Right People
A solid staff will help you realize your company’s goals. So make sure to get the right person for each job. This entails having a detailed recruitment process and a thorough one where background checks for applicants are standard.
You need to build a solid team that will work with you to reach your goals before you can even begin working toward your company’s growth trajectory.
Having the right people is a surefire way to ensure fast growth. Your business will be better equipped to scale up with a dedicated team. With the right people at the helm, you can confidently delegate tasks to focus on important work. In doing so, you can perform at your best and cultivate a collaborative work culture.
Focus on Established Revenue Sources
Take care of your loyal customers. There are several ways you can do this. For example, you can implement a referral system or create a customer loyalty program. There are also marketing strategies based on previous purchasing behaviors to encourage repeat business.
Form Strategic Partnerships
Entering into strategic partnerships with other companies gives you access to a broader network of customers. You may even form a strategic partnership with a vendor to help expand your business. Regardless of the type of partnership you form, you must manage business relationships and maintain effective vendor relationships.
The bid for growth is always a risky endeavor. Fortunately, there are things you can do to limit both internal and external threats. One vital resource that you can tap into is business insurance.
A small company is more susceptible to disruptions that could cause it to collapse if not mitigated. Employee data theft and leaked product designs can destroy the very foundation of your business. These problems can generate high costs. They can also erode customer confidence and loyalty.
Business insurance will help you recover from such losses. The right product will even cover the cost of remediation and lawsuits.
Creating new products and services is a part of business growth. You’ll need equipment to mass-produce new merchandise and space to store them. You will need the financial bandwidth to increase your operating and distribution footprint.
If you already have insurance, it would be wise to review your policy to ensure that you have the right coverage to support your growth plans. It could be tempting to skip on this. But really, the last thing you want is to realize you’ve outgrown your coverage and end up paying much more money just to upgrade.
Growth is something every business owner aspires to achieve. However, growing your business can be daunting in the best of times.
Timing is crucial to any growth plan. It’s essential to be aware of the signs that might tell when the opportunity is ripe for scaling up your enterprise.
Finally, hiring the right people and forming strategic partnerships will go a long way in helping your company reach its growth goals.
Implementing a growth plan is not without risk. Thus, mitigate those risks by focusing on established revenue resources and getting the right business insurance product.
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