A business growth strategy is simply the method or action you use to grow your business from one stage to the next.
Business growth means different things to different people. Some see it as an increase in sales and revenue, while others interpret it as opening another location or expanding the market.
Regardless of how you define growth, your business growth plan should be based on market research. You should consider your business structure, your products or services, and your target audience. You should also outline your short-term and long-term goals for business growth at various stages — a timetable for measuring progress. And the business growth strategy you want to adopt at each stage.
What are the stages of small business growth?
Most of today’s great companies started as small businesses and didn’t grow overnight. Instead, they have evolved from one stage to another over time to become what they are today.
Most companies go through five stages of growth, each with its opportunities and challenges. Some businesses go through all five stages of the business lifecycle, while others go through only a few, depending on their nature.
After identifying the current growth phase of your business, you can choose the right growth strategy for your business to move to the next phase.
Stage 1: Seed and development
New business starts at this stage, but it’s still an idea for you to explore and fine-tune. During this phase, do a lot of market research and ask questions to see and determine if your business idea is good and attracts customers.
Stage 2: Startup
At this stage, new businesses are opening, and new customers are starting to come in. This is also a time when you may encounter unexpected problems with your customers, cash flow, or day-to-day operations. Because startups are all about survival and adaptability, it may take some time until the business stabilizes in some way. It is important to adapt to and understand things.
Stage 3: Growth and establishment
At this stage, the new business generates steady income and a growing customer base. However, the company may struggle to reach breakeven. The focus here is on improving your bottom line as quickly as possible, perhaps by hiring skilled workers, investing in equipment, increasing productivity, and reducing waste.
Stage 4: Expansion
Companies at this stage are consistently profitable and established in the industry. But expansion isn’t just about sitting still and relaxing. At this stage, business owners typically consider other options. It could mean gaining greater market share through partnerships, new product development, or franchising. This phase aims to scale without overpowering yourself (or your resources).
Stage 5: Maturity and possible exit
In the maturity period, the enterprise makes a stable profit every year. For some business owners, this is the right time to exit the business through a sale or handover to a new CEO. For others, this may be the time to formulate a new expansion strategy for the company.
Top business growth strategies
Different business growth strategies work at different growth stages, and each strategy carries its risk level. Here are the top business growth strategies that will help you succeed.
This growth strategy primarily aims to increase market share by selling more existing products and services in the current market. This is a low-risk strategy used by many small businesses strategy.
Here are some market penetration strategies:
- Seeking lower prices compared to competitors.
- Attract new customers with special offers and discounts.
- Get existing customers to buy more with volume and bulk discounts.
- Increase the number of distributors and dealers your company uses.
This growth strategy involves introducing new products and services into existing markets to capture a larger market share.
Here are some market penetration strategies:
- Create variations of existing products.
- Updating an existing product when features are no longer attractive to potential customers.
- Introducing a new product line in-house.
- Bundling services into different packages and levels.
Market development or expansion
Go-to-market is a useful growth strategy for growing businesses struggling to navigate the current market (perhaps due to stiff competition).
Also known as market expansion, increasing market share by selling existing products or services in new markets. For best results, thorough market research should be done to understand the new market and its customer base.
Market development strategies:
- Sales of products or services in another state or country.
- Franchises that offer franchise opportunities to other businesses and individuals.
- Selling to another user group or target group.
Segmenting your market allows you to identify and focus on sectors where your competitors have not been successful. This business growth strategy divides the market into Geography, Demographics, Market Behavior, or Customer Behavior. This growth strategy will benefit small businesses operating in markets with many large competitors.
Customer retention as a growth strategy is how you nurture existing and new customers and turn them into repeat and loyal customers. To do that, we need to earn the trust of our customers.
Retaining customers lower the cost of doing business because it’s cheaper to retain customers than to acquire new ones. Repeat customers are also likely to pay more, and loyal customers who speak about your brand through word of mouth can be an important part of growing your business.
The following steps will help you build customer trust and retain customers:
- Communicate regularly with your customers via personalized emails and social media.
- Don’t keep all your promises to customers for too long.
- Show your customers your appreciation with loyalty discounts, gifts with purchases, free service upgrades, and other thoughtful gestures.
- Receive regular customer feedback through surveys, surveys, and user reviews.
- Reward every new customer that a loyal supporter or ambassador refers to your company.
- Provide superior customer service through live chat, self-service, or phone support.
As you read the blog, many strategies for growing your business exist. You need to identify and hire the best talent for your business, its current needs, and the size you want it to grow in the future.