Is company growth more important than profit?
Business growth is important for the long-term health of any company. That’s why solid strategies for business development need to be identified and implemented early on. Growth not only shows that your company is operating successfully, it also attracts investors, helps secure funds, and draws in talent.
Profit and growth go hand in hand when it comes to crucial areas of any company. In the cases of small business development, profit may be low, but growth rates high. While there may not be much money coming out of the business, a healthy growth rate shows that the company is on its way to being profitable. This can make it very attractive to investors, which in turn only boosts your growth and your journey to profitability. Again, this highlights how growth should be top priority for small businesses and startups.
What are the best business growth strategies?
There is no single strategy for business growth, and the way a company will best progress will depend on their own circumstances. Here are just some of the small business growth strategies you may want to consider:
Market penetration is when you aim to increase market share. There are several ways to do this, including discounting your product or services, increasing advertising or creating bundles. This helps give you a competitive advantage and attract new customers without having to make a new product.
This is when you move into new markets. For example, if a bakery adds corporate catering to its services it enters as a new business in this field. This is a common strategy for many businesses, even once they’ve become very well established. A successful business is always looking to develop and grow, so even if you are quite comfortable in your current market, you should always be on the lookout for new opportunities and ways to boost cashflow.
Moving into new channels
Omnichannel is the modern way of marketing and selling. If you are relying on a brick and mortar location alone to make those sales, you may struggle to see business growth at the same level of your omnichannel peers. Make sure you have as many channels open as possible for customers to discover and engage with you. A modern business should have an online store, social media channels, email channels and, where applicable, retail stores. Plus, your physical location needs to think about being more than just a store, it’s an extension of all those other channels. That means you can’t offer one experience with your online store and not maintain it offline. If you operate solely online and aren’t sure where to go from there, consider things like pop-ups or being stocked by local stores.
Segment your market
Look at your current customers and double down on the demographic you want to engage with the most. You can base this on customer location, age, habits, or industry types you serve. This is an area where analysis and metrics are crucial. Knowledge sharing and easily accessible data is key here, giving you a true overview of your whole business so you know where to direct your energies. For example, if you know you are in a student town, but aren’t attracting as many students as you hoped, try offering a student discount. Similarly, if you know your location gets a lot of foot traffic from commuters, consider something like a loyalty card to attract potential customers and encourage long-term retention.
Top tips for business growth
Business owners need to approach growth opportunities in the right way if they wish to be successful. Here are some tips to keep in mind:
Use a growth strategy template
Always plan your next move. A small business needs to aim for growth but throwing yourself into it without proper planning will only propel you towards failure. Brainstorm it with all the key decision makers in your company. Your next steps will affect everyone so don’t overrule or ignore the ideas of others. A shared growth plan template can provide a space for everyone to have a clear overview of the next steps the company plans to take and leave their own feedback. Team collaboration is what makes a business great and what will help it grow.
Set SMART goals
Everyone has goals, but SMART goals help your team realize them. SMART is an acronym for how a goal should be approached:
- Specific: Say precisely what you want to achieve, not just some vague idea of what you might do.
- Measurable: Your goal needs to be measurable, so you can see if you are making progress.
- Achievable: Naturally, it’s no good setting impossible targets.
- Relevant: Does your goal make sense for your business, at this current time, with your current team?
- Time-bound: Set a date and lay out what needs to be done into order to meet this deadline.
In using SMART goals, you have created a whole framework for your team to work within to meet your targets.
Make sure you are using the right tools
Growth doesn’t necessarily mean doing something completely new. Instead, it means you should optimize the processes you are already doing. This is why upgrades and improvements on current tools and workflows is crucial.
Small businesses like Doberman have turned to Dropbox to help improve their workflows and boost productivity, as Design Director Klas Thorsén explains, “With Dropbox Business, you can take your computer offline or travel, and you still have your files right there with you. It used to be difficult to work in different time zones, but now all of our files stay synchronized and available to whoever needs them.”
Whether it’s implementing a smart workspace, introducing flexible working, or boosting collaboration opportunities. Investing in productivity is its own path to growth.
Don’t be complacent
There is always a need to grow, no matter how successful your small business becomes. Business failure for small businesses is a very real threat even a decade into operations, so you can’t rest on your laurels. In the same vein, don’t think ten steps ahead. Sure, nothing says “growth” like a new, bigger office and a higher number of employees, but are you at the correct stage of growth to maintain that? Think sensibly and logically, and think always of your own business, don’t just replicate what you see others doing.
Standards are high for the modern, successful business, and you need to grow to meet them.