8 Ways to Grow Your Business
Once you’ve decided you want your business to grow, the next question is: How? Many possible growth strategies are available to you—everything from pursuing new markets to creating new products and making an acquisition. Many companies craft their own unique combination of strategies. What’s important is to select an approach that’s best suited to your overall strategic plan. It’s easy for companies to lose sight of their broader-picture objectives by getting sidelined into non-strategic growth opportunities.
You should also consider market conditions. For example, acquisition may be a good strategy if prospective companies are undervalued because of a challenging economy. On the other hand, in certain conditions, it may be cheaper to expand your existing business than to pay a hefty premium for a pricey acquisition
It’s also very important to discuss your strategy with your team and get feedback to make sure you have employee views and buy-in. And be sure to analyze how the strategy you choose will affect your finances. Here’s an overview of growth strategies:
- Market share—Under this strategy, your company seeks to capture a bigger share of your current market with the products it already has. For example, you can do so by increasing your marketing efforts or adjusting your prices.
- New markets—Another strategy is to find new markets for your current products. For example, you can expand sales to a new city, province or country.
- Diversification—You can also develop new products to sell to your current market and/or to new customers. This can lead you into a related line of business or an entirely different one.
- Acquisition—Buying another company can be a cost-effective way to increase market share, capture new markets or diversify. This strategy gives you an established clientele and operation, which you can adjust to add value. Acquisition may be a good strategy if you want to expand into a new geographic location or to another country where you lack contacts and local knowledge.
- Buying a franchise—You may also consider acquiring a franchise. Such a business usually comes with name recognition, serious marketing power and support from the franchise owner. But be sure to investigate all your costs, including start-up fees, royalties, advertising and supplies.
- Franchising your business—Franchising your own businesscan be a successful growth strategy, especially if you have a profitable operation that can be easily replicated by others.
- Strategic partnerships—Another common growth strategy is to pursue partnerships with other companies. A partnership can be as simple as an informal agreement between businesses in complementary markets to refer clients to each other. More complex partnerships include joint ventures (in which two or more businesses pool resources to pursue a common project).
- Repositioning and efficiency—Under this strategy, you target growth in your profit margin by repositioning your products or improving your efficiency. For example, you can analyze each of your current products or services to determine their profit margin and alignment with your business strategy. You can then shed any that are underperforming and/or non-strategic. Alternatively, you can study your operational processes to find efficiency improvements.