Running a successful business is tough, with one in five startups failing within their first year and around 60% going bust within three.
The key to avoiding this fate is business growth, a blanket term for any form of expansion. This helps small businesses to attract new customers, acquire more investment and increase profitability, among other benefits, all of which shield them from the financial issues that commonly cause companies to go under.
What are some of the best ways small businesses can achieve growth and give them the best possible chance of continued success?
Increase market penetration
According to Investopedia: “Market penetration is a measure of how much a product or service is being used by customers compared to the total estimated market for that product or service.” In essence, increasing market penetration involves growing a business’s product or service’s current market share by boosting sales. So how exactly do companies do this?
Some common strategies include charging lower prices than competitors, offering first-time or bulk discounts and implementing loyalty reward programmes. All of these methods encourage customers to buy more of a business’s product or service.
That said, companies shouldn’t discount their products or services too much, or they could do serious damage to their bottom line.
Utilise new channels
Identifying new ways to sell products or services can be a fantastic way to grow a business, enabling it to reach new customers. This is especially useful if its market is particularly competitive.
Say a company is online-only, for example, then it could perhaps launch a pop-up shop or sell its products at local markets. While physical businesses may want to do the opposite and start selling products or services online, just like Primark has done recently.
Utilising new channels can be more granular than this though. For instance, if a business has previously relied solely on organic (non-paid) online marketing methods to attract customers, then using pay-per-click (PPC) advertising on channels like Google Ads, Facebook and Amazon could pay dividends.
Expand their product or service offering
Although a company’s core product or service may be providing stability, this likely isn’t enough for it to maintain growth. As such, expanding its offerings can be a valuable way forward, and there are so many ways businesses can do this, including:
- – Â Introducing varieties of existing products or services, like new flavours of a drink or different kinds of online marketing.
- –  Updating products or services to make them more appealing to customers — for example, Netflix’s decision to pivot from DVD rentals to online streaming.
- – Â Launching new products or services entirely, like when Amazon started to sell electronics, tools and other consumer goods instead of just books.4. Embrace partnerships
Partnering with other companies can offer various routes to growth, from accessing extra resources to develop a new product or service, to harnessing partnership marketing to tap into each other’s customer base.
However, organisations should be careful to team up with complementary, non-competitive businesses. Working with competitors could cause them to lose customers to their partners, though they do want to ensure their customer base will be interested in their products or services.
Some famous examples of successful brand partnerships include GoPro and Red Bull, Uber and Spotify, and Nike and Apple. For instance, Uber and Spotify’s partnership involved a “soundtrack for your ride” campaign that helped both brands earn more users.
