You have started a small business of your own, and things have been ticking along quite nicely for a couple of years. But revenue and profit growth have started to stall. It has become apparent you need to do things differently to take your company to the next level. Sound familiar? It’s not unusual for a small business to reach a plateau after the first two or three years of rapid growth.
That’s when it’s time to take a strategic look at your business and decide where to take it next. There are many effective tactics and strategies you can use to expand your business into new markets, while retaining your existing customer base.
Here are five ideas to reignite the growth of your business, even against the backdrop of a tough economy:
- Cross-sell and up-sell to existing customers.
- Extend your product or service line.
- Expand into new territories.
- Add an e-commerce shopfront.
- Work with business partners.
Let’s delve into each of these tactics in more detail.
1. Cross-sell and up-sell to your existing customers
One of the best ways to grow your business is by securing a larger share of your customers’ existing spend. You can often achieve this without spending a lot of money on marketing or building new infrastructure or capabilities. Use the information you have about their purchase history and service requests to segment them into groups. Then use e-mail marketing or a telephone call to approach them with relevant offers.
For example, if you’re a specialist in high-end PC gaming gear, you could note which customers might be in the market for an upcoming graphics card. You can send them an e-mail to advise them to pre-order to secure stock. You can use an e-mail marketing solution like GoDaddy Email Marketing to manage your mailing lists, track your e-mail marketing campaigns and send out slick, professional marketing e-mails.
2. Extend your product or service line
Adding more products and services to your existing portfolio sounds like an intuitive and simple way to grow your business. It’s sometimes easier said than done. You really need to do your homework to understand where there’s an overlap between your business’s capabilities and the products and services your customers will be interested in buying.
For example, if you run an accounting practice, do you already have the in-house capacity and software to also provide management consulting services? Or would your dog grooming parlour’s customers be interested in purchasing dog treats from you?
You should do market research with your customers and do your sums carefully to ensure there is demand for your new offering. You need to be able to provide this product or service profitably.
3. Expand into new territories
If you’re a local business and you believe the market in your area has become saturated, you may consider expanding into new territories. One way to do this is to set up a branch or store in another suburb or city to reach new customers. This will demand a considerable investment in time and money, so it is not a step to take lightly. You will need to research demand and competitors in the new territory before committing.
Another challenge that many business owners don’t anticipate is how much of their time it will take to manage new physical branches. My two next tips offer lower cost, lower risk ways to expand your geographical reach. These don’t necessarily require you to invest in staff on the ground or a direct brick and mortar presence.
4. Add an e-commerce shopfront
Depending on the product you sell, an e-commerce storefront can be a great way to expand your reach to new customers across the country and even around the world. Adding e-commerce functionality to your website can increase your sales significantly, without renting any new space or hiring additional sales staff. Some of the factors you should consider as you set up an e-commerce site include:
- Setting up an attractive website where customers can browse your offerings and place orders.
- Putting in place a secure gateway for payments.
- Finding a reliable courier partner if you will be selling and shipping physical products.
- Drawing up a marketing plan to bring people to your e-commerce site. Some elements may include social media, SEO, paid search ads, and traditional media.
- The costs of getting started with your own e-commerce storefront are surprisingly low. You can launch a beautiful store with an integrated shopping cart and fast mobile shopping for less than R400 a month. Take a look at this how-to guide to learn how you can kickstart your e-commerce site with GoDaddy’s Website Builder.
5. Work with business partners
As a small business owner, you don’t necessarily have the time or capital to pursue every business opportunity that presents itself. You also don’t need to do it all alone. You can reach new markets and customers by forming alliances with other companies. For example, you can appoint resellers, distributors, or franchisees to take your brand and product to market.
Look for partners who complement your geographical presence or product line to get the best results.
If you sell, manufacture and package health foods, for example, consider a partnership with the café at the local gym. Or appoint a distributor in another province to market your offerings to other retailers.
The benefit is that you can leverage their infrastructure, skills and customer bases, dramatically reducing your cost of expansion. The drawback is that you may lose some control over the customer experience.
Some of these tactics can be rolled out at relatively low cost, so experiment and measure results to see which ones work best for you. There is no simple formula for expansion, but businesses that are agile and strategic can accelerate their growth and get over the plateau.