When it comes to growing a small business, it’s best to plan and structure so that you’re ready for the future. After completing the initial stages of setting up a business, moving forward, and profitably – growing the business is the most exhilarating for any entrepreneur. However, it’s not always sunshine and rainbows, as each business has its ups and downs. Planned growth can help your business become more lucrative over time. Irrespective of the current stage of your business, it’s best to plan and structure external growth strategies. The details of a business growth strategy can vary greatly depending on industries, products, opportunities, costs, and the current market stance.
However, there is no perfect set of rules to follow to grow your business, but some simple strategies can help to take your venture to the next level. Here is a curated list of external growth strategies to help you start thinking and executing.
External Growth Strategies To Master
1. Write A Solid Business Plan
A solid plan can serve many purposes. Moreover, it should be a blueprint for a successful business. It should also cover strategic plans, anticipating hiccups, marketing and sales plans, and even attracting investors. A solid business plan can guide your company to stay on track and focus on what’s important. Here is a template to guide you to write a successful plan:
Write An Executive Summary
The executive summary’s purpose is to distill everything that follows and give potential investors an elevated overview of your business that influences them to read further.
Define Your Company And Business Model
This is where you define what you do and what values are related to what you do. Addressing these questions delivers insight into why you’re in business, why you’re different, what your core values are, and why you’re a good investment bet.
Estimate Your Market’s Conditions
It should include an overview of how big you estimate the market is for the products you offer, a breakdown of your business’s position in the market, and some insights into your prospective competition. You should also provide some information about your targeted market.
Explain Your Product And/Or Service
It’s essential to provide a section that outlines key details about your products or services for prospective buyers. If you sell many items, you can include more general information. If you only sell a few, provide more detailed information on each. This is where everyone knows what the essence of the products or services you offer is.
Design A Marketing & Sales Strategy
Your marketing plan should include a framework for your current resolutions and your future strategy for the business. It should lay out the advertising strategies you will implement and the budget you have for it to generate leads and convert that into business.
Detail A Financial Plan
No matter how great your idea is, if you don’t have a solid financial plan, your business might not see the light of the day. In the end, people want to invest in a company they expect to have a probable future.
Your financial plan should embody your short as well as long-term goals. You must have a list of all the assets and liabilities for the business and evaluate your net worth.
Defining your budget can help you where your business is going and where you have to slack to meet the requirements.
2. Define Your Target Market
The target market is important when talking about external business growth strategies. These are the people you think are the most benefited to be exposed to your products or services. It’s always a good idea to research and better understand who will ultimately use your product or service. Then, you’ll be much better positioned to cater to those specific people.
Who is your target consumer and likely to use your product? As you answer this question, consider factors like:
- Age
- Gender
- Education background
- Purchasing power
- Social class
- Location
- Consumption habits
- Lifestyle
- Interests
- Engagement in social networks
- Professional information
Describing your audience is one of the initial steps of a successful marketing plan, but it doesn’t guarantee success just yet.
3. Scale The Business Rationally
Scaling a business is not the same as the growth of a business. Scaling your business means you’re able to handle an increase in revenue without substantially increasing resources. In fact, scaling is a logical and natural process in business, but if you are not ready to match up with the increase in customers and their demands, it might be fatal. Scaling up means having the ability to grow without hampering any other aspects of the business. You should have a plan in place for scaling up to be fruitful.
Get Your Finances Straight
A business needs to have access to funds that can see it through this growth stage. A budding business can look into applying for a loan or a line of credit to draw on.
A Team That Delivers
You need to build a team that can deliver. Not everything needs to be done internally. The most profitable and lucrative businesses have learned the significance of knowing when to hire internally and outsource.
Boost Marketing And Sales
Even though you already have a marketing plan in place, you need to rekindle it and think the strategies through. Then, you can experiment with new-age marketing technologies such as email marketing, social media marketing, and influencer marketing.
Invest In New Technology
Now’s a good time to evaluate and invest in new technology on the market that saves time and money yet scales largely. For example, you can invest in marketing automation, inventory, manufacturing, shipping, and other technology systems.
4. Make A Connection
Get to know your customer base personally. Understand your customers’ needs and cultivate products and services that fulfill them. You should strive for underpromising and overdelivering, your customer base will keep coming back to you. You can gain an understanding of your customers by encouraging them to provide you with personal feedback. Customer feedback helps you improve your customers’ specific needs to find the best solutions for their problems. The better your services meet their needs, the more your business will grow.
A survey reveals that customer reviews inspire 85% of buying decisions. If your customers conclude that you don’t care about customer relations or your customer service agents are not helpful, your business will be hurt. Conversely, if word of mouth is in your favor, your sales will likely go up.
If you take a closer look at any customer base journey, you will find that just closing a sale is not the final achievement. When you build a robust relationship, your loyal customers will turn into brand advocates. At a given period in time, your customer base will start rising on its own. Just to conclude, you should go through these points to make sure you are headed in the right direction:
- Learning who your customers are
- Personalizing communication
- Collecting customer feedback
- Building trust by being honest
- Rewarding your customers
- Providing ensuring support
- Enlightening customers with resources
- Delivering better customer experiences
- Using the correct CRM
5. Research The Competition
Competitors to a business are other businesses that can offer a similar line of products and or services to your customers. You can identify the types of competitors listed below:
Market Leader
The market leader is the most influential one among all of the competitors. The market leader in an industry with the largest market share. It usually is among the front-runners’ other firms in price changes, new product introductions, distribution coverage, and promotion spending. In other words, it is the company that rules a market.
Market Challengers
The market challengers may not be the most influential ones but can still be the most daring ones due to their ferociousness. A market challenger is a runner-up firm in an industry that is fighting hard to be on top. Further, it aggressively attacks competitors to get some of its market shares. Some runner-up firms will choose to just shadow rather than challenge the market leader.
Market Followers
Market followers are companies that go along. They look for steady market shares and profit by following competitors’ deals, prices, and marketing tactics. Putting in other words, a market follower is a firm that wants to hold its share without challenging the status quo.
Potential Compititors
These are the market competitors who haven’t entered yet but are likely to. They are your future competition.
6. Identify New Opportunities
This is one of the effective external growth strategies. As a new venture, you should always be on the lookout to find better opportunities for your business. First, analyze new prospects in your business by understanding your audience’s demographic better. Then, comprehend everything from distribution channels to your direct competitors. There are likely loads of new opportunities you could track immediately.
SWOT Analysis
One of the best ways to identify new opportunities is using a SWOT analysis. It focuses on four key factors affecting your business:
- Strengths
- Weaknesses
- Opportunities
- Threats facing your business
SWOT analysis is a technique for evaluating the performance, competition, threats, and potential of a business, in addition to part of a business such as a product line, an industry, or other entity.
It’s significant to have everyone present discuss its core assets and flaws, define the opportunities and threats, and brainstorm ideas. This way, you can figure out how the whole strategy based on the SWOT analysis will boil down to the segments below before pledging to it. You can also work in contrary with a niche-specific SWOT analysis that converts into an overall SWOT analysis.
Next, you should then research and define the sustainability of each opportunity to conclude if it is worth chasing. When doing so, you can decide to:
- Exploit it
- Share it (e.g. by way of a joint venture)
- Ignore it
You will need to work on any business opportunity you decide to chase. Furthermore, be careful that you don’t follow a hollow trail. Have concise external growth strategies for growth and the necessary resources, abilities, and tools to make the most of the opportunity. Securing too much new business without being able to deliver on it could put your company at a bigger risk than you imagined.
7. Partner Up
As your company nurtures and your market share grows, you must listen and adapt to the changes. First, you need to plan and implement a scheme for growth. A well-devised plan will empower you to move ahead of the competition and ensure your business can survive the unpredictable tough times almost everyone faces. It could let you reach a wider audience quickly. Recognizing those partnerships is challenging. But, look out for companies that are harmonizing and are similar in ethics to your own. Make connections and offer opportunities for working together.
Taking this step involves important business strategy, finance, and human relations. It can enhance your company’s worth with raw resources and skilled, effective human capital if done right. However, making the wrong choices here could land you in an overabundance of problems that could prove to be fatal for your company.
8. Leverage Other Markets
Leveraging markets that are close in proximity to what you can help increase the customer base. The secret to neighboring markets is to distribute your skills and capabilities, not products and services. It’s taking your core experiences and creating new value for new customers. Before evaluating any new market, look at your skills and existing channels. Discover the best ways to use those skills, and you’re on your way to new sales development opportunities.
Skillful leveraging is how small players beat their well-known competitors—they use fewer resources and play the field to yield results.
After doing some thorough research to see who else would use the products and services you sell, you may be able to sell to a whole new demographic and new customers without opening a new store or introducing any extra products.
Increasing your demographic emphasis can introduce you to lots of new customers. You can keep selling the existing line of products you offer to the same kinds of people. You just have a wider audience. But of course, this will increase your marketing costs too. You are recommended to play the field wisely. It can cost a lot to improve business, so make sure that the returns will be worth it. Professional market researchers can help with the prediction of the sales that are expected from your investment.
9. Sell More
Of course, that’s a no-brainer. Try to increase sales at any stage of your business. You can always learn from your customers. There may be new openings right in front of you. Also, ask what they like about your product or service and what you could do better. Do more of what they want and fix the shortcomings to extend your appeal.
Introduce a program to your existing customers to lure them in. For example, you can introduce a loyalty program that offers rewards when they shop from you or use your services. Introduce better and lucrative reward programs for reoccurring customers.
Combining related products or services into a bundle offer is also a widespread way to increase sales revenue. The idea is to inspire a bigger sale by giving customers a deal they can’t resist. For example, you might offer half-priced milk to anyone who buys a pack of cookies. As a result, your profit from milk sales might go down, but the global deal value will go up.
10. Social Media Is The Way To Go
Looking for effective external growth strategies? Read this one. According to a report, the number of worldwide users on social media is expected to hit a massive 3.02 billion active users per month by the end of this year. So, if you are using social media to expand your business, you are just fooling yourself.
That means if you are a business owner and you’re not fixated on building a solid brand presence on social media this year, you are missing out on capturing plenty of customers.
You can weigh in social media to promote your business or services, receive market feedback effortlessly, and interact with niche influencers to grow exponentially.
It takes resources and time to develop content on social media and build an audience. You can hire a brand manager to work on your socials or outsource it to some agency.
Targeted Advertising To The Rescue
Additionally, you can scale your business swiftly by using targeted advertising to drive more traffic to your store or if you have an e-commerce website. You have to devise ads such that they convince the users to buy, and that’s accomplished by focusing on the right kind of people with the right kind of deals.
Influencer marketing on social media can be one of the most money-making and unsurpassed decisions you have made for your business till now. This is because influencers are now widely taking the place of mainstream celebrities. That’s why consumers are looking up to their beloved YouTubers and gurus for guidance on what to buy and where to buy.
Brand storytelling is one of the most compelling ways to set the narrative of your business and yourself, connect with your customers, increase brand loyalty and sell your vision. All this can be achieved by actively engaging on social media across all platforms.
It’s never been easier and better than today’s day and age to grow a business this rapidly.
11. Customer Support
No external growth strategies are complete without customer support. Initially, it might seem like a waste of resources and a waste of money to invest in your customer service team. It seems a tiny thing to be working on to grow your venture into something lifelike but honing up your customer support can prove to be the best decision because it retains customers, and retaining customers is way cheaper than acquiring a new customer.
You can train your customer support staff to grow into a mini sales team. Train them to serve customers rapidly and intelligently. This helps increase the trust in your product and brand, which helps retain the customers better. So they will keep coming back.
Make The Most Out Of Your Customer Service Team
Your customers can’t understand everything you are trying to project and fill the narrative. On the other hand, your customer support staff is likely to have more awareness over this perception. These individuals you have employed and trained are in contact directly with your customers. They have the accountability of expressing what your brand stands for when interacting with existing or potential buyers. A large number of customers revealed that they are loyal to brands because of their customer service.
Deprived of your customer service reps, you have no direct connection to these customers. Your customer service team plays a major part in representing and conveying the message to customers and selling what you want the brand narrative you want to sell. They convince customers and turn a bad experience into a better one, and when your customers are satisfied, they’re more likely to spread word of mouth to friends, family, and coworkers. Many satisfied customers are likely to share a positive experience with others and encourage others to buy. Therefore, if you want your customers to represent you in the best light, they should feel fulfilled and appreciated. Only then will they find core enthusiasm for spreading the word and serving their favorite brand the right way.
Growing A Small Business Has Always Been Uphill But Possible Task
You can only grow your business in such a competitive atmosphere by implementing these above-mentioned external growth strategies.
While there is no harm in trying out new things and doing what works best for your venture, businesses must also emphasize setting up proven and reliable external growth strategies. There is no single and sure-shot way that resolves all the hurdles and no definite answers to the questions, but given strategies can definitely help. You can start combining and implementing them and find the best ones that can score you a big win for the business.
Have we missed anything or have any questions? Get in touch
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You might also enjoy these popular startup growth-related articles Internal Growth Strategies For Small Businesses, Steps To Successfully Expand And Scale Your Business and What Is Market Penetration Growth Strategy? on a similar topic.
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