Turning a small business into a big one is hard work. Not to mention that the odds are stacked against you. According to research, most companies fail within the first five years of business and half of those who survive the first five years, will fail within the next.
So how do you move forward in your business?
The answer: Develop a growth plan by having a strategy.
Most businesses fail because their owners try to wing it. Develop a strategic planning process and a plan that addresses how you will grow. Start in the areas that will bring you the least amount of risk in the beginning of your business, but as you grow so will your tolerance for risk.
A well-defined risk management strategy will help guide you through investment strategies geared towards enabling your growth.
Some growth areas for you to consider:
1. Sell more of your current product to your current customers.
Find new ways customer can use your product and service and think of alternative ways to package your offering that would lead to you customers using more of your product or services and therefore increasing revenue. For example, McDonald’s repacked their hamburger and fries and offered a Happy Meal to kids or a value meal to adults.
2. Sell complimentary products to your current customers.
You already have the trusted relationship with your customers. What are their other needs? Is there a way you can offer them additional products that support your brand and positioning that you customers could use? Think of products or services that bring synergies, not confusion to your customers.
3. Target new markets.
Your current market may be serving you well but are there other markets that can use your product or services. Let’s say you currently serve residential customers, can you offer your same product or service to a commercial customer? Or how about going after a government contract?
4. License or franchise your ideas.
Is your business model something that can be duplicated and sustained without your direct involvement? Do you have systems and technologies that could help others achieve entrepreneurial success without figuring out the “secret sauce” along the way? Offering franchise opportunities or the ability for others to license your ideas or systems is a way to accelerate your growth.
5. Mergers and Acquisitions
Many great companies acquire quick growth by either merging or acquiring another company. Although the risk is high, if you are diligent in your research and evaluation, this is a way to gain tremendous growth. You acquire their customers, revenue and profits, but you also acquire their people, problems and transition challenges. But as they say, no risk, no reward.
6. Open another location.
Whether you accomplish this via 5 above, or decide to expand on your own. Offering your product and services in another geographic region could be a great start to growing your business. In addition, this could be great way to test out if you could sustain a franchise model within your control. If you can master the systems, communications and training for your own location, chances are you can master it for others.
7. Take your knowledge online.
A great way to add revenue with lower cost is to take your business online. With technology today, the ability to offer more with less is easier than ever before. Think how you can translate your product or services to an online business. If you sell a product – open an online store. If you sell a service, can you create an online training program? Think of Wolfgang Puck – world renowned chef. He is now offering an on line cooking school. Via video training and live broadcasts, he is teaching customers how to cook just like him!