Whether you’re diversifying or thinking about offering a new product, growing your business can help increase profit and improve your success.
If you’re considering growing your business, the first step is to create a growth strategy. A growth strategy is used in order for businesses to identify and plan how they can grow and expand their offering in either the same or a different market.
Growth strategies can include the following:
Market development: Expanding into a new market using your current product or service.
Product development: Adding new products or services, while staying in an existing market.
Diversification: A combination of both market and product development; essentially when a business enters a new market with a new product or service.
Market penetrations: Attempting to gain more of an existing market using the same product. This can be done by lowering prices or increasing your marketing activity.
The first step to help you effectively grow your business is to research the market. Whether you are expanding within the same industry or entering a brand new market – it’s vital to know how the market is operating and any trends that could affect your business. It also gives you a good indication of whether there is a large enough demand
If your growth strategy includes product development or market penetration, it’s as important to do your research, even if you feel like you know the market well. There may be certain factors that do not affect your current product or service, but has the potential to affect any new product or services you’re looking to offer, such as, higher taxes on certain materials or larger supplier costs for more specialist items.
You can undertake market research through methods such as surveys and customer feedback. The Office of Nation Statistics can also offer up to date statistics that are relevant to your industry.
It’s important to know exactly who you are competing with and who potential customers could be choosing over you.
For example, if you currently own a brick and mortar shop and you’re looking to sell online, a digital offering would be hit with different challenges than your physical location.
Once you’ve identified your competitors, you could look into other aspects, such as how they market themselves and the products they offer.
You can find out more about how to perform competitor research by heading over to our blog.
In order to be a successful business, a satisfied customer base is crucial. It’s important to make sure your customers are never aware of any issues behind the scenes and that the quality of the product remains consistent.
Expanding your business presents a time of uncertainty and you may find costs increase as unexpected things happen
If your business needs additional stock or materials that are above your regular amount, you may be in a stronger position to ask for a discount or reduced prices from your suppliers. This can then have a positive effect on your cash flow and working capital.
When you’re expanding your business, you can’t always do everything yourself, however hard you try. Having a reliable work force that supports you and your business can make the transition a lot smoother. A team that cares about the future success of a business can make a real difference during a transitional period.
Growing your business requires preparation, research and dedication. If successful, it can be hugely rewarding and profitable.