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small business growth

How To Grow A Small Business

Introduction

Growing a business from the scratch is not an easy task. Often times, it could be hard to see any noticeable growth in the early stages of starting the business. However, the success of a business depends on a variety of factors.

From marketing to employee training, every aspect of your business requires attention.

A startup business growth can be measured with a whole range of metrics. And each of these metrics provides a unique file of one aspect of your business. Together, these growth indicators provide a structural view of how your company is faring and where it is projected.

This article details some of the best small business growth strategies.

Table of Contents

What is Business Growth?

This refers to a natural procedure of a business development that turns out under favorable conditions.

It is a stage at which the business reaches the need for expansion and look for other options to make more profit. The rate of growth of a business varies from firm to firm.

A business can, however, grow at a fast rate or slowly. Also, not all businesses survive to grow big. Business growth is a function of the following drivers;

  1. Business lifecycle
  2. Industry growth trends
  3. Owners desire for value creation

Small business growth is, therefore, a function of available resources and requires an upfront investment. The following are some indicators of business growth;

  1. Increase in the volume of total sales per annum
  2. Rise in the production capacity
  3. Increase in employment
  4. Rise in production volume
  5. increase in the use of raw material

Types of Business Growth

Organic Business Growth

Organic growth concentrates on producing more products and creating spaces for success. This is the most basic and effective means of growth for a business. Therefore, businesses that focus on organic growth expand shifts to manufacture more products.

A business needs to expand to accommodate its needs if it is focused on growing organically. This is, however, a solid business growth strategy for new businesses and businesses that are looking to tap into new markets. Organic business growth ultimately sets a business up for future success. 

Strategic Business Growth

This strategy focuses on the long-term growth of an establishment. Therefore, businesses that focus on strategic growth have reached a period of organic growth where they need to find additional markets.  A strategic growth strategy may be to create additional products to add to inventory. 

However, it allows businesses to focus on long-term plans and use stored capital to attain long-term goals. Ultimately, it is difficult for new businesses and businesses that are producing fewer products than demanded.

Partnership/Merger

For some businesses, merging with another business presents benefits and opportunities for market expansion. However, this is the riskiest strategy of business growth with the most potential success. A merger will help a business enter new markets, manufacture more products, and gain customer loyalty cultivated by the other brand.

Internal Business Growth

Internal business growth is a great way to maximize resources without an outlay of capital. It allows a business to recoup costs and continue production using fewer resources. It uses available resources and determines how they can be used better.

This is the hardest strategy because, rather than simply expanding a product line, businesses can change how they conduct business. This usually scares managers and employees. Ultimately, determining which strategy type to adopt and cultivating a strong business growth strategy will prevent wasted time and money.

How To Achieve Business Growth

Discard Unprofitable Products or Services

Carry out an analysis of the costs and revenues of each product or service your business offers. Hence, increase your profit by removing unprofitable products or services. If a product or service is unprofitable,  you can reduce the costs involved or stop offering the product or service.

Revamp Your Recruiting Tactics

Fortify your employees with new enrollment tactics. To measure the growth of your business based on your workforce base, you have to be creative with how you recruit. Beyond advertising the job descriptions through the media, you have to harness creative ways to find employees.

Get the right people to work for you. Get people who share your passion for the business and people who can help you with the business growth goals.

Improve Customer Relationship Management (CRM)

Increase your market share with a CRM system. Market share is dynamic. Therefore, you need to maintain the number of customers you already have as you grow. This, however, will help you maintain your market share while expanding beyond your core customer base.

A CRM system helps you maintain customer relationships. Stay on top of customer relationship through the following:

  1. Send surprise birthday emails with discounts.
  2. Send thank you emails to customers who have hit an anniversary with your business.

You can also use CRM to get feedback from your loyal customers.

Know Your Competitors

Knowing how your competitors are diversifying is important if you hope to become a leader in your industry. Visit your competition’s websites frequently and research their ad campaigns, and stay aware of their new trends and strategies.

This will help you to build successful marketing strategies and learn from failed plans.

 Expand Your Business Portfolio

Scale up your sales by buying out competing companies who are looking to leave the industry. Therefore, acquiring struggling or emerging companies with a significant online presence can boost your company in terms of growth.

Factors Affecting the Growth of Small Businesses

Internal factors

The following are some of the internal limitations of small business growth;

  1. Poor Advisory Team: A single manager seldom has the combination of skills that a management team should have. Through the division of labor, each member of a management team concentrates on their own area of expertise. Besides, the business makes the most of having its direction and goals from a different point of view.
  2. Lack of resources: Resources like office space, equipment, technology, and facilities affect your overall productivity. Therefore, make sure to provide your employees with the basic resources they need to perform their tasks efficiently.
  3. Access to working capital: Set aside some money to cater for reinvestment. Also, avoid being in situations where you run out of the capital to increase production to fulfill orders. Hence, keep track of your accounts payable and receivable to avoid this instance. Low cash flow will influence your potential of taking advantage of business opportunities.

External factors

The following are some of the internal limitations of small business growth;

  1. New government policies and laws are factors that can affect your business operations and growth in the long run.
  2. Technological factors related to the internet and a new technology disrupting your entire market can also affect your business negatively.
  3. An increase in interest rates or lack of business credit can also affect the growth of your business.

What is Profitability Growth?

You are making a profit if the revenue from your sales covers your expenses. Having a positive cash flow means that you are making a profit. This helps to keep your business running. 

Ultimately, profitability is one of the primary goals of every business owner.

The main reason for every establishment is to make a profit. Profit is important for any business.  Hence, without investors or business loans, it may be difficult to get capital for startups.

Without enough capital from profits, companies will likely fail within a short period of time. Startups usually do not have well-supplied funs to rely on. Hence, generating profits right from the start should be your primary focus.

One of the larger ways to generate profit is by expanding your reach in the market through growth. Spending heavily on marketing and sales efforts is expensive. However, restricting expenses can result in stagnation.

How to Achieve Profitability Growth of Small Businesses

The following are some of the strategies on how to achieve profitability growth of small businesses;

Prepare a strategic plan with 5-year goals.

It takes time for a business to develop. Therefore, you have to create at least a five-year outlook strategy. Define the operation of your business each year. However, your business will become more complex as it grows over the years.

In this sense, your financial plan has to grow with your business. Literally, your strategy must define how money is generated as well as how you profit from the money you generate. However, constantly review your plan to keep you updated if the results tally with your goals.

Implement and monitor a budget

A business uses a budget to keep its expenses under control. Hence, follow your budget closely to ensure that your finances are in order. However, you should only spend outside of your budget if it is beneficial.

Budgets also need to be revised monthly or quarterly. This will keep your budget aligned with the growth of your business.

Seek professional input

Professionals are consultants who help businesses uncover case problems. It is difficult to separate your vision from its actual performance. Therefore, advice from professionals helps to uncover your business’s weaknesses, while also proffering solutions to issues uncovered.

Outline an “exit” strategy

Exit strategies make transitioning or the sale of your business easy to accomplish. This reduces the stress of the process involved, so you know what to do when you are ready to exit from your business. You still need an exit plan if you are building a generational business.

This is because you have to determine how ownership will be handed over to the next of kin.

Factors Affecting the Profitability Growth of Small Businesses

The following are some of the setbacks of profitability growth of small businesses;

Pricing Too Low for Your Products and Services

The important aspect of a company’s profitability is defining its pricing strategy. Profitability is related to the price margin of an organization. However, pay attention to your net revenue, not your gross revenue.

Keep your costs low and use higher pricing to achieve higher profitability. This is business logic. Always keep your costs low and sell your products and services at a higher price.

Setting up Profit Objectives too High

Everything has some limits, so bear in mind the industry average. Do not go too higher from the industry average. You can fix higher prices with additional value, but not too much.

Compare your value and your competitor’s value offered to make a reasonable decision.

Allocating more money on things that you don’t need

Some entrepreneurs start to spend too much after their initial startup success. But do you really have to spend on things that you do not need?

 Spending on new technology when you can improve on the existing one is not advisable. Thus, think about your spending before giving out money. This is because your small business cash flow is important for your company.

So, by integrating control mechanism related spending, you will control your spending habits.

Your small business is competing in a highly competitive market.

In setting up profitability objectives, make sure you know the market in which you are operating. However, in highly competitive markets, the main competition relies on pricing strategies.

This means that competitors try to claim larger portions of the market, reduce prices, and hence profitability. It will be disastrous to copy competitors at this stage.

Ultimately, you should increase the value for your customers instead of reducing prices.

Lack of innovation

Failure to innovate means denying yourself from being at the top of your market. Therefore, you have to innovate new products and services to maintain and bring new prospects to your company.

Ultimately, innovate new processes, products and services, and business models.

What is Sustainable Growth in Business?

Sustainable growth refers to the achievable growth that an establishment can maintain without running into problems. To clarify, the peak at which sales can increase without exhausting available funds and requiring new sources of financing.

However, growing rapidly without funds poses a huge challenge to those enterprises. Therefore, demand should be balanced against supply.

How to Achieve Sustainable Growth of Small Businesses

The following are some of the strategies on how to achieve sustainable growth of small businesses;

Clear Purpose

Every business should outline a clear vision of its existence. The vision guides every aspect of its activities, from recruitment to product development and sales.

Partnership and merger

It is very difficult for micromanaging establishments to achieve sustainable growth. It is, however, tempting to do everything yourself during the early stages when capital is low.

However, if you take on more than you can handle in areas where you do not excel, your company’s prospects will be damaged.

Strong Brand

It is important to build brand equity and emotional connections with customers. So, The stronger the attachments, the more likely customers will keep coming back.

Keeping Existing Customers

It is much more difficult to find new customers than customer retention. Hence, selling to existing customers is more certain than selling to a new customer. In the US, companies lose half of their customer base every five years on an average.

Repeatable Sales

Simply creating a unique product will not sell itself. Effectively, sustainable growth can be attained by designing and implementing sales processes. These processes should be deployable repeatedly, at a greater scale each time.

Community

Entities interact in different ways within the business ecosystem. Ecosystems are important for sustainable business growth. This is as a result of providing companies with the structure it needs to support it.

Factors Affecting the Sustainable Growth of a Business

The following are some of the setbacks of sustainable growth of small businesses;

  1. If a company decides to sell new equity to the general public, it will reduce the owner’s shares. And this will affect the company.
  2. The more your debt increases, the nearer the firm to bankruptcy.
  3. When dividends are reduced, shareholders become unhappy.
  4. Raising the profit and reducing asset turnover is a long-term plan that can take months or years to overcome.

What is the Operational Growth of a Business?

This refers to a mindset that accepts certain principles and tools to create sustainable improvement within an establishment. Hence, operational growth can be achieved when all members of an establishment see and actively improve the flow of value to customers. It involves the application of the right tools to the right processes.

Ultimately, it is not just about increasing productivity or reducing costs in an establishment. But it has to do with creating the company’s culture that will allow you to produce valuable products.

When this happens successfully, the ideal work culture is created, and it enables employees to stay empowered and motivated.

Principles of Business Operational Growth

The following are some of the principles of operational growth of small businesses;

Lead with Humility

Humility means a willingness to take suggestions from subordinates, regardless of their position. The best developments happen when people accept their shortcomings and look for better ways to improve.

Seek perfection

This is often coupled with resistance because people are quick to conclude that perfection is not possible. Perfection seems unattainable, but you have to strive for it. Look for long-term solutions to problems and simplify your work with a quality outcome.

Embrace Scientific Thinking

Constant learning and experimentation breed innovation. Hence, it is always helpful to know what works for you and what does not. Explore new ideas and encourage employees to do the same without fear of failure.

Focus on the Process

Do not blame other people when things go wrong. Look for the problem in the process, not the person. This is because a great employee cannot consistently produce good results with a bad process.

Setbacks of Operational Growth of a Business

The following are some of the setbacks of operational growth of small businesses;

Detachment

Most employees are often not connected to the broader business needs of an organization. Therefore, it is common for employees not to understand the business strategy.

Lack of Appetite for Adaption

Organizations that have the ability to adapt their infrastructure to change in a competitive market have more chances of succeeding. Some businesses are unable to change courses in time to keep up with their competition.

Complex Data

More data is good, but only to an extent. People start making decisions without data if it is so complex and difficult to understand.

Siloed Management

The majority of startup organizations do not have a management strategy in place to bridge the gaps between processes and functional areas.

Achieving Growth through Retail Staff

Invest in your front-line staff

Employees who directly deal with customers can have a massive impact on store productivity. These employees, in a sense, breathe life into your store and keep sales going. Therefore, encourage front-line employees and keep them inspired to do more.

Educate employees to go beyond product knowledge

Training employees is the best way to improve staff productivity. Hence, go a little beyond inventory training. That is to say, teach your salespersons to relate to customers, and show interest in every customer by engaging them in conversation.

Catch up with each other regularly

Create chatrooms, group pages, and other platforms on the media to catch up and relate to team members. Do it regularly. This will help you in keeping everyone accountable. It also gives people the chance to seek solutions to their problems.

Employees can as well use this opportunity to raise concerns so you can help them do their jobs better. You can, however, organize a daily informal standing meeting to agree upon each team member’s goals and priorities.

Find creative ways to motivate your team.

Regularly organize prizes and rewards for your hardworking employees of the week or month. You can also use contests to motivate each employee sales team to bring their best.

Other ways to motivate your employees include;

  1. Providing free foodstuffs for your employees.
  2. Free discounted products from your store. Encourage employees to use your merchandise themselves and improve their product knowledge.
  3. Random personalized gifts.
  4. Give your employees flexible work schedules.

Growing a business is complicated and confusing, especially for start-up businesses.

 However;

  1. Do you want to understand if your business is ready to grow?
  2. Also, do you want to be introduced to some ways that you can achieve growth?
  3. Do you want to be guided through the processes of achieving business growth?

If your answer to any of the above questions is ‘yes’, then turn to Differentiated Consulting.

Differentiated Consulting?

Differentiated consulting is a professional consulting firm that sells a very stylized portrayal of the path to help businesses to grow profitability, potential, and purpose by partnering with business owners.

This consulting firm has deep industry experience and offer the following services, which will help in driving growth in any establishment;

  1. Disruptive retail strategy and coaching
  2. Data-driven assessment & built-for-you strategy for business and retail

This strategy will enlighten you on areas including;

  1. Data-Driven Assessment at the Operational level of your business and prioritized for the new normal, detailed reporting, implemented action plan.
  2. A diagnosis of where your business is in the Lifecycle stages with automated, step-by-step guidance through each stage to improve sustainability.
  3. Automated business development SaaS (software as a service) for small business.
  4. A.I. solutions for branding, marketing, leads, and sales.

The services detailed below are coupled with the module next level retail program of Differentiated Consulting.

Ascertaining state of your business

Any conscious business owner will take action when a business experiences a disruption. You will need to conduct a blunt assessment of the true state of the business. While also, analyzing the causes of the company’s current situation as this is the best way to define the state of a business.

Differentiated Consulting, however, will go beyond the normal day to day operations and dig deep into your firm to get a full visual of how your business is fairing.

They will go an extra mile to analyze the state of your business by;

  1. Assessing your business with a proprietary software
  2. Analyzing business structures and the setup of the business
  3. Finding additional funding for small businesses
  4. Keeping track of the startup business plan template as well as the existing business plan template
  5. Outlining a 3 year cash flow projections spreadsheet for your business
  6. Outlining a 3 year profit projections spreadsheet for your business
  7. Frequently analyze your breakeven analysis spreadsheet as well as your balance sheet spreadsheet.

Creating your leadership structure

small business growth, brown game pieces on a white surface. one standing out, depicting leadership
Employees have to understand the leadership style of the firm

Individuals who are widely commended for their leadership skills do not usually function in the basic state of leadership. They are mostly in their normal state.

However, people in their normal state stay within their comfort zones so that external forces can direct their behaviors and decisions.

That is to say, these people lose moral influence and so rely on the exercise of authority to bring about change. Others also comply with what these leaders ask, out of fear.

Hence, the result is usually unimaginative and incremental, which leads to the reproduction of what already exists.

Small business managers, especially, are seldom confused when it comes to choosing the right leadership style for their companies.  This is where Differentiated Consulting steps in to save the day.

Certainly, they have combined 20+ years expertise, passion, learnings and successes into a platform that enables executives to lead beyond business stallers.

Securing the Future of your Business

Every entrepreneur strives to grow the business. Business success is impossible when you are in your comfort zone.  Hence, step outside your comfort zone if you want to grow your business. Differentiated consulting is not all about paperwork and policies.

It projects into the future and what it takes to integrate talent into strategy. They will, however, coach you on how to fully launch your capabilities to achieve set goals and secure the future of your firm.

What is a Comfort Zone?

This means being in a situation or location where we repeatedly do the same things with similar results. This is because we are okay with the results and not looking for improved outcomes.

It could also mean a place where we know our aspirations and dreams are dying. We, however, need to step out of our comfort zone to survive in business.

Differentiated consulting will therefore guide you reach the peak of your potentials through;

  1. Developing a mindset for change
  2. Embracing change
  3. Step out as a Habit from your comfort zone
  4. Indulging in effective decision-making
  5. Prioritization your daily plans

Facilitating competitive advantage

Competitive advantage refers to strategies put in place to present a company’s products as both unique and higher in quality, in relation to competitors. Also, it is what generates greater value for a company because of certain strengths or conditions.

This is a company’s ability to produce products and services more efficiently than competitors in the same market.

Differentiated Consulting exists to inspire and enable small business owners to harness growth both professionally and profitably. They have numerous strategies including;

  1. Collaborative Partnerships to widen your market or other gains it comes with.
  2. Competition Assessment of your firm to determine where to pay attention to.
  3. Competitive Resources to know which resources are more profitable.

Strategic analysis

This is the process of examining an establishment and its immediate environment to develop a strategy.

Differentiated Consulting will guide you to accelerate growth with strategies that are focused on your desired outcomes. They will help you to;

  1. Identify and evaluate relevant data of your company
  2. Define both the internal and external environments of your firm
  3. Analyze your data using SWOT analysis, value chain analysis, or other analytical methods

S.W.O.T. Analysis

small business growth, a man playing chess
Always make a move

SWOT – Strengths, Weaknesses, Opportunities, and Threats.

This is a common tool used to assess the internal and external environments of a company as part of a company’s strategic planning process. SWOT analysis, however, can be done for a single product line, industry, place, or person.

With ready planned templates, Differentiated Consulting will help you zoom in on where money is being spent unnecessarily. They will also help you to retrieve savings that they can zoom out with a global lens of their business. Ultimately, they will help you to invest into the priority areas that drive growth and support the vision of your establishment.

Customer strategy

A good customer strategy improves acquisition, lead generation, retention rates, and cross-selling by consistently delivering differentiated experiences across all customer touchpoints.

It could, however, include customer experience strategy, segmentation, media strategy, offer strategy, brand communication strategy, or any combination of these.

With Differentiated Consulting, you will be enlightened on the importance of customer service and why it should be your top priority. They will also guide you on how to deliver differentiated services to your customers.

You will eventually acquire the following from their services;

  1. What is customer Intelligence
  2. Customer Retention
  3. Conducting customer Analysis
  4. Carrying out a customer Strategic Plan

Business acumen

This is a combination of skills and knowledge acquired through experience. It refers to training someone from how to be punctual to helping an executive to become a leader of global businesses. It also means acquiring knowledge of issues, the skill to apply that knowledge, and the confidence to take action informed by past experiences. This might seem like a huge task.

However, Differentiated Consulting can professionally carry the burden of connecting the dots between you or your employees, your financial acumen, and strategy. They achieve this by helping you to analyze the following;

  1. Retail Key Performance Indicator (KPI) Math
  2. KPI Focus and Goals
  3. Retail Expense Reduction

Sales strategy

This is an outline or plan on how businesses get their products and services to their customers and increasing profits. Sales strategies are developed by a company’s sales, marketing, and advertising managers, and the administration. However, knowing the right strategies and channels of delivering goods and services to customers can be cumbersome for mangers.

Differentiated Consulting will lift that burden off your shoulders. They will assist you in building a dedicated team that is inspired and result driven. Leverage on their proven sales services which include;

  1. Increasing Online Revenue
  2. E-commerce Strategies for Growth
  3. Driving Growth with Amazon
  4. Google Shopping Optimization
  5. Growth with Experiential Retail
  6. Creating High-Converting Autoresponder Emails

Conditions For Success

small business growth, four people holding each others wrists in a square
Working together gives the firm double advantage of achieving success

The financial rewards that entrepreneurs enjoy from being successful in business are the driving forces to grow. These are the key factors that motivate them to work hard and take risks.

With great pride in helping small businesses achieve their goals and securing their future, Differentiated Consulting is also available for you. You will also get an opportunity to get enlightened on the following success driven strategies;

  1. Business Leadership Agility
  2. Routines and Discipline Strategy
  3. Business Productivity Tools
  4. Financial Tracker

Conclusion

Assessing your business from daily to annual operations should indicate the position of your business in terms of growth. This will help in identifying indicators of growth. Capitalize on the good while working on areas that need improvement.

However, if you spot indicators of growth, capitalize on it. Take advantage of small business financing to seize potential opportunities while eliminating inhibiting factors. 

Once you have developed an idea of how your business is developing, tap into the countless free tools to help grow your small business. All these seem like a lot of work? Reach out to Differentiated Consulting! They will guide you through.

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  • 8507 Oxon Hill Road, Suite 200 Fort Washington, MD 20744

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