Beauty is in the eye of the beholder, but it’s safe to say there’s one trait that’s attractive to all business owners: profitability.
Any entrepreneur knows that getting your business off the ground requires a lot of time, research and investment.
Once your business has established itself and you are finally making a profit, you might want to start thinking about how to grow your business to the next level.
There are many possibilities for doing so, depending on your business, your resources and how much hard work and money you are willing to invest.
1) Increase sales to existing customers
Perhaps the easiest way to boost your sales is to persuade one-off or infrequent customers to buy more regularly and become repeat customers.
To do this you need to keep on top of who your customers are and what they bought previously so you can target them effectively.
When they make their first purchase ask them if they mind having newsletters and special offers sent to their inbox. This gives you a reservoir of customer data to target with marketing messages, which you can tailor to particular segments depending on what they’ve purchased previously (for example, you could target those who’ve bought a PlayStation games console from you with PlayStation games).
Another option could be seeking out lapsed customers (those who used to buy from you but have stopped) – have they been swayed by your competitors?
If so, think about how you can win them back. You could introduce loyalty schemes or discounts for bulk orders to win these customers back as well as to attract new customers.
2) Attract new customers
You need to attract new customers to really grow your business. Central to achieving this goal is increasing awareness in both your local area and further afield – for example through an SEO campaign or advertising in relevant offline and online media.
In our social-media-obsessed society, it’s never been easier to use the internet to your advantage. Read our guide to social selling and how to use it to boost your sales.
Another way of drawing in customers is to talk to your target demographic and find out what it would take for them to buy from you rather than your competitors. To this end you could ask them to complete a survey in your newsletter and at the point of sale, whether online or in your store.
Reviewing your prices and assessing them against the prices set by your competitors can also be an effective way of increasing sales.
However, it is also worth keeping in mind that while discounting your prices might increase sales, it will adversely affect profits if you cut prices too drastically.
Improving your products or services is a sure-fire way to grow your business.
Word-of-mouth recommendations are one of the most invaluable forms of advertising. The rise of the online reviewing culture means that good value and high standards are rewarded – and poor service punished – more than ever before.
Customer feedback has therefore become an even more integral part of improving your offering. So check reviews on, say, TripAdvisor if you’re in hospitality or relevant sites for your industry, take your customers’ criticisms on board and adjust your product or service accordingly.
However, it is also important to weigh up the pros and cons of making these changes. A minority of customers might claim, for example, that your shop is short-staffed, but hiring extra staff may simply be financially unaffordable.
Many small businesses are one-trick ponies, with a single product, service or group of customers, and this can be good for start-ups that want to focus their time and energy on doing one thing perfectly.
But as your business grows, so do the opportunities. Diversification can be a great growth strategy, not just for growing revenues but for spreading your risk too. For example, if demand for your core product or service suddenly drops, then you have other revenue streams to fall back on.
Diversification can be done in a number of ways:
- By selling products or services that naturally complement your existing ones (like if a nail bar hired a masseuse or a laptop retailer introduced a repair service)
- Adapting existing products, or how they are marketed, to appeal to a new group of customers
- Selling your products or services online for the first time
- Or selling/exporting your products or services to a different region or country (increasingly doable for online retailers, while selling the master franchise for an overseas territory is a cost-effective option for offline businesses)
5) Open another location
When business owners think about growth, opening another location is often the first thing that springs to mind.
However, you need to make the decision based on what is best for your business – and this might not necessarily be what’s best for your personal finances in the short term.
It’s perhaps not wise to open a second location until your first outlet is profitable and running smoothly. You also need enough capital to make it happen.
If you do take the leap then make sure you do your research. Stay focused on your bottom line, choose your location carefully based on demand for your product and the level of competition in that locale and ensure that you have well trained and prepared staff in place – including a manager you can trust and rely on – before you launch.