One of the hardest parts of starting a small business is learning how to make it grow. Marketing can be challenging, especially if you don’t have a lot of experience. Here are some things to think about for your small business growth strategy.
The easiest way to grow any business is by making more sales. That’s “Growing My Small Business 101.” Actually doing it can be a challenge, though. Here are answers to common questions about market penetration for new companies.
How Can I Improve Market Penetration Without an Advertising or Marketing Budget?
This is one of the biggest challenges faced by small companies. You could change your prices to encourage more sales, but improving visibility and availability work too. For the best results, improve your visibility first then use a promotional price to increase sales. Below, you will find three ways to make immediate improvements.
- Increase your distribution channels so you can sell in more places
- Zero in on your competitors’ distribution channels and then offer more than they do
- Effect improvements to the product that make it cheaper or better
What Kinds of Promotions Can I do to Increase Market Penetration?
Small business growth strategies in the 21st century need to take into account the amount of time average Americans spend online. That means using digital marketing strategies like SEO and web design best practices.
It also means using old fashioned strategies like temporary price reductions or sales coupons that bring attention to your business. You also need to create avenues for word-of-mouth, so consider traditional advertising as well as online efforts.
If you can bring your goods and services to more people and expand the total size of the market, you can grow without directly competing with others in your field. That is important because it is not always possible to compete directly when your company is still small. That’s where market development strategies come in.
How Can I Find Ways to Expand My Marketplace?
There are a couple of options for handling this. The first is to research ways to use the product that have not been promoted yet. That would allow you to demonstrate those new uses through your marketing, showing a new base of customers what they can do with a product.
You can also change the focus of your marketing to make appeals other than use. This is done when companies rebrand and redesign products.
Should I Enter Entirely New Markets?
This question can’t be answered lightly. If you have the time and money to invest in market research so that you can enter the market with eyes open, then it is probably worth considering.
You still need a closer cost/benefit analysis before you can tell for sure, though. If you can’t make a major investment in market research, though, then you should not move into a new market. It’s just too big a risk to take blind.
What About Setting up Alternative Channels?
This can be a great way to expand. It combines moving into a new marketplace with offering new distribution channels. That gives you two moves you can make at once. On top of that, many of the alternative channels you can take advantage of will be low-overhead. Consider the options below.
- Subscription sales to guaranteed customers at a regular pace provides convenience and the opportunity for sales you can count on
- Online sales require little investment to set up and allow anyone to find and purchase goods and services
- Exploring mobile apps as a vehicle for sales can help you reach even more customers
The last area of small business growth strategies is one that requires a lot of investment to make use of. That area is product expansion, the act of adding new products to your line.
When Should I Invest in Product Expansion?
The best time to expand is when you know there will be demand for it. That means using market research to understand when you have maximized what you can do with penetration and expansion strategies.
By offering new products, you can give your old customers something that fulfills a new need. You can also effectively expand your marketplace. Depending on how you expand, this could be as large an investment as starting a new business, though. It all depends on how far your new product lines are from your old ones.
How Else Can You Grow Your Business?
There are a number of ways to grow your small business, but they all have one thing in common. They all involve knowing your customers and your marketplace. Without a good base of research outlining the competition and the size of your potential market, you are operating without the knowledge you need.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.