Is It Time to Grow Your Small Business?
Now, it’s time to consider growing your business. How do you know if you’re ready? And how do you “grow” a business?
WHAT DOES IT MEAN TO “GROW” YOUR BUSINESS?
Growing your business means bringing in more profit by attracting more customers. You attract more customers by offering a wider variety of products or services.
Let’s say you make and sell your own soap. You started with three scent options. Your customers love these, and you’ve reached a point where you’re making more than enough money to cover your overhead costs. Growing your business in this case means using some of your profit to increase production. Perhaps you offer new scents. Or create a subscription service. Or expand to a new type of customer.
Growth means going beyond what you started with so you can get your product to even more customers. It’s the next logical step on the entrepreneurial journey to success.
HOW TO KNOW WHEN IT’S TIME TO GROW YOUR BUSINESS
1. There is a consistent demand for your product or service. You have regular customers and can depend on a certain amount of revenue each month. The key word here is “consistent.” One good month doesn’t mean it’s time to expand your product line just yet.
2. Outside circumstances are in your favor. Going back to your soap-making business, you can generally assume that there will always be a demand for soap. However, are people into buying homemade soaps right now? Are your soaps more expensive than generic store-bought soaps? In other words, what’s going on with soap customers these days? Will there be a market for more of your soaps?
3. You’re no longer spending every spare minute on your business. Things are moving along pretty smoothly by now. You’ve automated everything that can be automated. You’re no longer tweaking your logo or creating a landing page for your website. Your business is now a well-oiled machine that requires only the occasional check-in from you.
TYPES OF GROWTH
There are four types of growth that businesses consider:
1. Market Penetration: selling more of your existing products in your existing market. For example, selling more of the soaps you already make to customers who already buy them, perhaps by offering deals, discounts, or subscription services.
2. Market Development: selling more of your existing products in new markets. If all your current customers are your friends, who else might be interested in buying your soaps?
3. Product Development: selling new products in existing markets. You try out new scents, shapes, and colors of soaps. Maybe you expand into hand creams or lip balms. And then you try to sell those new products to the customers you already have.
4. Diversification: selling new products in new markets. A combination of #2 and #3. You make new products (or new variations of existing products) to sell to a new set of customers. Say, instead of only selling lemon-scented bars of soap to your friends, you now sell strawberry-scented soap in fun shapes to parents.
WAYS TO GROW YOUR SMALL BUSINESS
Growth in business doesn’t just happen. Just like when you prepared to launch your company, growth will take some planning and preparation. Maybe not as much this time around, but it’s still there.
-> COME UP WITH A STRATEGY
No need to get fancy or complicated. Your growth strategy might be something as simple as, “Get on more social media.” Instagram has been great for your soap business, but where else can you find potential customers? Which social media platform is favored by parents who might like to buy your new strawberry-scented soap in fun shapes?
Then again, you may want to get fancy and complicated. Your strategy might include a timeline for developing and testing new products followed by a careful marketing campaign. This is what major companies and brands do. It’s great if this is your goal but try not to get too lost in the details.
-> HIRE A TEAM
Many hands make light work! If your company is already growing and you need help, you’ll likely consider hiring a team. Before you do, consider these pros and cons:
- More help = less work for you
- Fresh perspectives and ideas
- Some of your profit now goes to someone else
- Culture or personality clash
- Less control
-> REWARD EXISTING CUSTOMERS
As a customer yourself, you know how great it feels to be acknowledged with some swag and VIP treatment. Why not share the love with your customers? Thank them for their loyalty, especially if they’ve been with you from the start. Goodwill goes a long way toward positive word-of-mouth advertising.
-> FIX (OR MOVE) YOUR WEBSITE
You’ve been keeping up your website, right? Make sure your links still work, your info is up-to-date, and your product list is current. A well-maintained website instills trust in shoppers. Add new high-quality photos, product descriptions, and contact info.
-> MAKE THE MOST OF SOCIAL MEDIA
Yes, yes, we know you’re a social media wizard. But do you know how to do social media for business? It’s more than posting cute videos of your dog! Make the most of your business accounts to find new customers and sell more products.
As you grow your company, don’t forget why you started it in the first place. You believe in the power of great-smelling soap to lift a person’s spirits and make their whole day a little brighter. You love making soap and you love that others enjoy your product. If growing your business takes that away from you, it might not be the right time.
You also don’t want to grow your business into something unrecognizable. Expanding from soap into lip balms and body lotions is nice. Switching exclusively to skincare probably isn’t a good idea. Remember, your customers love what you’re doing. Don’t disappoint them by going in an entirely new direction!
Growth is a natural part of business. When and how you do it are entirely up to you!
The Kantner Foundation awards college scholarships to young entrepreneurs in Florida. Click here to learn more and apply.