There’s a lot to be said in favor of the small business atmosphere. You may never want to turn into the next Amazon or become an anchor store at a mall. But every small business owner wants to keep increasing profits, which is the fundamental ingredient for growth.
To get some ideas on how to grow your business, read on. We’re about to explore ways to expand your company a little … or a lot.
A Practical Approach to Growth Helps Reduce Risk
I hear that shapeware is a hot product for 2019, but adding it to your auto parts line makes little sense. You need to put practicality upfront to reduce senseless risk in your expansion plans. Considerations like your current financial status, your customer base’s interest, and your experience within any given industry are just three examples of issues that can make or break your growth.
The following five ideas can help you stretch a little, while growing within your comfort zone.
#1. Start with your current numbers
If you don’t examine your numbers, you can’t start an expansion plan on solid footing. Analyze the books. Are you spending more than you need to? Are you charging enough for your current products or services? How does your business compare with the competition? These are good places to start. Even minor adjustments can lead to greater profits.
Of course, familiarity with your current status may not be enough to predict likely success of new growth ideas. Do you have an internal or external accountant? If so, then you might already have access to a knowledgeable viewpoint. It might also be worthwhile to take your numbers to a Virtual CFO for a realistic prediction of potential outcomes based on your specific situation.
#2. Entice your existing customers
Remember: it costs five times more to attract new customers than to retain existing ones, so you definitely want to keep your current customer base happy. One way to accomplish this might be to find ways that encourage them to buy more, as long as you offer options that truly meet their needs.
If your company repairs computers, then offering semi-annual tune-up service contracts can bring in more (and predictable) business. Selling certain products in bulk can benefit you and your customers — as long as you profit from the sales and have the space to store the extra stock. Of course, don’t forget to offer companion products to your current line. From day one, the purchase of Barbie™ dolls generated impressive profits by selling high-priced clothing. Now you can even buy helicopters and tiki huts for Barbie™.
#3. Enlarge your region
This could mean opening new locations for your business, or even going global, if you have the knowledge and stomach for it. Sometimes you don’t have to open branch offices, thanks to advanced shipping options.
In 1971, the first Lou Malnati’s® Pizzeria opened in a Chicago suburb, eventually opening new local restaurants. Their deep dish pizza was so well-loved that my friends in Florida used to bring them home on the plane after every Chicago visit. The restaurant has begun to expand to other states, but my friends have been able to buy those pizzas online since the 1990s. Naturally, they spread the word, so many Floridians (and pizza addicts throughout the country) can now satisfy their Malnati’s pizza cravings.
Service businesses can also expand long-distance. You may initially send one of your consultants out to a remote customer location for an initial meet-and-greet. Then, choose from myriad meeting and collaboration tools to work together online as if you shared the same office.
#4. Enhance your offerings or add to them
Software businesses already know the power of new release offerings to entice existing customers to shell out more money for the latest must-have features. By listening to customer wish-lists, you can enhance many products and services in the same basic way.
Enhancing services can be very simple. Would people pay more for pickup and delivery of household appliance repairs? If they already hired you to write blogs for them, would you automatically be a trusted source when they need help writing proposals?
If you offer physical products, then perhaps you can offer more sizes and colors. Or, if your restaurant customers can’t get enough of your home-made soups or dinner rolls, wouldn’t they be thrilled to see those products available at their local grocery stores? As long as you follow all of the food laws (and possibly make some changes to ensure longevity on the shelves), you might offer them in the freezer section, or even provide a packaged mix that they can prepare in their own kitchens. I love the Red Lobster™ Cheddar Bay Biscuit® mix!
#5. Partner with another business
Other small businesses are not necessarily your competitors, even if they operate within similar arenas. Sometimes, those are the businesses that can make your company stronger as you help each other grow.
If you make custom office furniture, you can contract out parts of large orders if you have a partnership agreement with a local carpenter. Or, you can offer fuller service by sharing the workload based on your individual specialties. For example, a Marketing Mailing List seller might appreciate your ability to handle mailings for their customers.
Naturally, partnering can go so far as merging with or acquiring other businesses. However, Mergers and Acquisitions (M&A) are legally complex. You definitely want to get a knowledgeable lawyer long before you consider this option.
Practical Makes Perfect
Perhaps one of the best ways to reduce risk is to identify ideas that are feasible based on your business’ current offerings and skill set. Just because you sell model cars doesn’t mean that you should expand by selling real ones.
Still, if you never stretch or think outside of the box, you’re unlikely to expand your businesses without venturing into new areas. As Theodore Roosevelt once said, “Keep your eyes on the stars, but remember to keep your feet on the ground.”