Running a small business has its own perks. You’ll be your own boss. You can schedule your working hours however you want, basically ditching the 9 to 5 grind. You can show off your creativity, design your own products, and generally speaking, you get to have your own voice.It takes a lot of work to have a successful small business that sells. Small business owners do not have a team for everything, especially when they first start. It takes a lot of effort, labor work, marketing, advertising, maintaining, and planning. But if you have the entrepreneur’s spirit and a fighter’s will, all effort pays off at the end of the day.You have to decide on growth and expansion at some point in your small business journey. Whether you are already there or not, it’s always a great idea to plan on scaling your small business. Expansion sounds quite stressful. That’s why in this blog post, I want to help you out by giving you the most effective business strategy tips on how to expand a small business.
When to Expand Your Small Business
Knowing when is the best time to expand your business is crucial because growing your small business at the wrong time can have negative effects. In this section, I want to discuss some factors that determine a good time to expand. If several of these situations are true about your business, then you can consider expanding your small business.
You have a loyal customer base.
Having loyal customers is a good sign. It means that there is a demand for your product and people are pleased with your product quality.
Customers are asking you to grow.
If you have multiple shipping to a specific location, it means that you have a potential audience in that area. So it’s an excellent sign to expand your business to offer easier access to those audiences.
Your industry or market is growing.
If your industry or market is growing, it means there is a higher demand for your market. This is also a great sign to expand your business so you don’t fall behind in your market.
You have a steady and positive cash flow.
Expanding a small business can be expensive. In order to handle expenses, you have to make sure you have a good cash flow. Always check your profit record before expanding to ensure you can handle the expenses.
You have more business than you can handle
Suppose you turn customers away and are too busy to contact sales leads, even if your team is organized and lacks time management. In that case, it means that you have a high demand. This is also a good sign to expand your business.
There is a need for a related product.
If your business is up and running and you have a reasonable sales rate on your product, then it’s time to add to your offerings. There will always be demand for related products if your product sells well.
You are running out of room.
Expanding a business sometimes starts with improving your workspace. Many small businesses start in the family garage or a small office. If you have lesser space to work in and need a bigger office, then it’s time to expand your business and look for a better location.
What is a Good Small Business Growth Rate
Organic business growth rate refers to the amount of growth in response to the needs of a business. To put it simply, the demand increase for your business and products in your business growth rate. You can calculate the growth rate quarterly or annually, or in any designated period of time. Choose a specific variable and measure its growth in your chosen time frame. Doing so will give you an idea of how to come up with a strategic plan to expand your business.
The variables you can measure are revenue, sales, customer base, cash flow, and market shares. The steps below are your guide to measuring each factors growth rate:
- Choose a variable and set a time frame.
- Identify the variable’s starting value considering the time frame.
- Identify the variable’s end value considering the time frame.
- Use one of these formulas to calculate the growth rate:
Growth rate = (end value/starting value) – 1 x 100%
Growth rate = (end value-starting value)/starting value x 100
But what is an excellent economic growth rate for a small business? Any amount between 15 to 25% is an acceptable growth rate for a small business. If you are aiming for a higher growth rate, for example, in sales or revenue, it’s time to expand your small business.
How to Grow Your Small Business
Now that you have an idea of the growth rate you want and decided on scaling your small business, it’s time to plan a business strategy. There are tons of tips on how to expand your business. I researched and gathered the most effective ways to expand your business quickly to achieve the growth rate you are aiming for.
● Build a sales funnel
Suppose you are struggling with your sales process and the amount of time it takes for leads to become prospects and, eventually, buyers. In that case, the first thing you need to do is to build a sales funnel. A sales funnel is a detailed process containing specific steps from drawing in potential customers to following up on them after they purchase your products. Before building a sales funnel, consider different funnel options. Does a free shipping offer help increase sales? Strategize your sales funnel based on your business strategy and use sales automation tools to automate the steps that are repetitive and are taking the time you can spend on building a relationship with your customers.
● Diversify your products
Can you add more product options to your business? Let’s say you make handmade ceramic earrings. Customers would appreciate it if they could have matching necklaces and rings. If you add in more product varieties, you can increase sales and expand your business. Think about what other types of products you can offer? What type of products would your niche appreciate? If a customer is looking for a set of products, they usually prefer to shop from a brand that offers all. In order to grow, listen to your customers and learn about what they need more from you. Then decide on which products you can add to expand your product range. You can also figure out other ways to offer your existing products. For example, with bundles and subscriptions. You can offer a bundle of products with a promotion on the value to motivate buyers.
● Focus on branding
Branding is the core of a business strategy. With branding, you show people who you are and what your business is about. Building a brand identity can help small business owners scale the business and stand out in the market. Customers appreciate your story. They will relate to your business on a personal level. This results in loyal customers and advocates. One way small businesses struggle to stand out is by not maintaining their image. Your logo, business story, tone of voice, marketing, advertising, and customer service are all parts of building your brand identity. A good personalized branding strategy can help your brand expansion and economic growth.
● Hire employees
At some point in your business expansion, when sales increase and there is more demand for your products, you need a few more sets of hands to help you answer your market’s needs. This is a good point to start hiring people. There are different departments in every business. Start hiring employees you need the most first. Are you struggling with your sales process? Hire sales reps. Can’t keep up with social media and advertising? Hire digital marketing specialists. Don’t have the time to write content for your website? Hire SEO specialists and copywriters. Slowly as your small business goes through economic growth, you will find yourself surrounded by team members who help with the overwhelming expansion process.
● Invest in a customer management system
CRM, short for Customer Relationship Management, is a tool that helps you with most of your customer interactions. It’s hard to track every order, collect customers’ data, and follow up on every order or customer while maintaining a relationship with each customer. CRM helps automate your sales funnel and keep all your sales data and customer information in an organized dashboard. If you are looking forward to scaling your small business, make sure you invest in a CRM tool in your business strategy. Doing so prevents getting lost and confused as you introduce more products and need to handle more customers.
● Expand your market reach
The idea here is to sell your products to new customers. If you have already reached your buyer persona’s target audience, you can look into other market segments for new customers. Design new buyer persona(s). Who else can benefit from your products? Who else is in line with your brand identity? Define a new target market and use digital marketing, and with strategic planning specific to that target audience, start advertising. Write content and expand your branding in favor of your new buyer persona. Small businesses need more customers for expansion. So in order to increase your sales growth rate, you can target more potential customers who would want to buy from you.
● Create a customer loyalty program
Business expansion and demand increase do not always mean having new customers. A great way to increase economic growth for small businesses is to have a loyalty program. Selling products to new customers is always harder than selling products to existing customers. A loyalty program helps retain your customers. It might also help bring in more customers as loyal customers tend to brag about your small business and promote your products. One good example of a customer loyalty program is introducing a loyalty club on your website and rewarding your customers every time they purchase a product. Customer loyalty programs are a great step in scaling your small business with the customers you already have.
● Seek Referrals
A great method for scaling your business and increasing sales is to motivate your existing customers to recommend your products to new customers. Referral programs help you reach new markets and customers that have not already found you with your current business strategy. In the section above, I talked about customer loyalty programs. An option you can include in your loyalty programs is giving your customers rewards like coupons, promotions, and free products every time a purchase is made through them.
Affiliate marketing is a form of digital marketing, also suitable for designing a referral program. You can describe a commission rate in your product value for influencers and bloggers. They will promote your products to their audience, and each time a purchase is made through them, they will be paid the commission rate.
Referrals are a quick and cost-efficient way for scaling sales and business expansion.
● Build an email list
Email marketing is another method for expanding a small business since not a lot of small business owners tend to use it. An email list is a list of email addresses and customer data such as name, gender, and location. You can collect emails via website pop-ups, embedded signup forms, event attendees, and social media accounts. Using an email list, you can inform your existing and potential customers of your new products, promotions, and generally any business updates. Email marketing is a great way to draw in more sales and build a relationship with your customers.
● Consider franchising your small business
Remember how we spoke about reaching new customers? What if these customers lived in a different location? Shipping and delivery is always a solution for selling products in different locations. Still, franchising can actually help you grow your small business. When you franchise, you sell your business rights to an independent owner. Then, the owner will operate and run that franchise for you. The catch is making sure you have potential customers in the area you want to franchise. You also have to make sure you educate your franchisers with your brand identity and business strategy.
● Build passive income streams
Expanding a small business is expensive, whether hiring new people or updating your branding strategy. Passive income streams are a great way to have extra cash flow. This way, you don’t have to worry about your saves or profits covering your expansion expenses. When you have a passive income on the side, you are allowed to do trials and make mistakes without the stress of wasting money. It’s an ample resource that allows you to strategize and move towards your growth rate.
● Create webinars
With webinars, you can promote any product or service. They are a great way for small businesses to introduce themselves to new potential customers. Webinars are like a sales automated tool. They will help you introduce any product to a vast audience quickly and easily. If you consider expanding your business, webinars can help you reach out to more potential customers and get the word out about your products.
● International expansion
We spoke about franchising, but have you ever considered shipping worldwide? There is a vast audience overseas who are looking for a product like yours. Suppose you have the resources and looking forward to building a more extensive product inventory. In that case, you can definitely consider expanding internationally. Selling a product in a different country can bring in more expenses, but the profit will be massive. Research about what your products demand is in different countries and target those which have a higher demand to start your international expansion first. Learn about cultures and how your product can solve the needs of your audience in different countries.
● Partner with other businesses
Sometimes partnering up with another business can help grow your own business. Your partner business can be a competitor or a business from another industry. You can find businesses that lack in something you have to offer. Partnering with those businesses helps benefit from their audience for your own sales and vise versa. Partnering with another business is a great opportunity if you have offerings they don’t, and they have the audience for the things you offer.
Participate in events
Never take the opportunity to promote your small business in an event for granted. Local events are a great funnel to introduce your products to more potential customers and scale your sales. You can increase your brand visibility and attract new customers. You can participate in events by attending events, meeting with other business owners, putting up a booth for your own business, and speaking as an industry expert. Attending events can help you meet more people and talk to your customers in person, get to know other business owners, and have inspiration for your brand identity and business strategy.
Practice corporate social responsibility
Customers don’t just shop from businesses. They tend to form a relationship with you and learn your story. Your prospects will become buyers when your business aligns with their values. So it is essential to practice social responsibility in your business strategy if you want to grow your business. CSR or corporate social responsibility is your business’s impact on the community. You should define What values you have in your brand identity, what importance those values have for your brand, and how you work towards them. These are some examples of corporate social responsibilities your business can practice:
- Going green
The benefits of having a green business are showing your audience that you know what impacts your business has on the environment and how serious you are about reducing that impact. Some examples of running a green small business are reducing your carbon footprint, being animal friendly, and not including any animal testings in your productions.
- Giving back to the community
There are local activities you and your team members can do to ensure your audience that you are serious about investing in the community and its people. You and your coworkers can volunteer in the community you live in, whether it’s working at a food bank or cleaning up open spaces.
- Producing sustainable products
Promoting a waste-free or plastic-free lifestyle is always a great idea to show your audience how much you care about the environment. Find ways to create environmental-friendly products and packaging such as fabric bags instead of plastic shopping bags, bamboo toothbrushes, shampoo bars, glass containers instead of plastic containers, and much more.
Other Tips and Tricks on How to Expand Your Small Business
I listed the most effective tips for you to consider about expanding your business. As I have mentioned before there are tons of tips and tricks to help you expand your business. The following tips are also suggestions you can consider as well when scaling your business.
● Use new sales and delivery channels
You can also expand your small business by tapping into new sales channels. Small businesses usually sell online or at local events. If you have a good cash flow you can consider opening a shop. Thorough market research will provide you a good perception about the location you can open your shop in. most highlighted factors you need to consider in your market research is, target audience availability in your desired location, public transform, easy access to your store location, and rent and tax fees. Once you have a physical store, you can form a better relationship with your loyal customers. Your store decor has also a huge impact on your sales. Use your branding style guide to design your store and provide an instagrammable vibe for your store. This way customers and influencers visiting your shop will be motivated to take pictures and post them on social media channels and promote your business.
● Launch an e-commerce website for your business
This is your sign if you haven’t considered going online yet. Launching an online shop for your business is the new black. We live in the era of digital marketing. If you manage to sell your products online with the help of a website and social media platforms, you can reach a pool of your niche market who are not necessarily in your area to shop in person. You can build a website on an e-commerce website platform and work on your SEO and digital advertising.
To Wrap it Up
I know how stressful or scary expanding a small business can get. There will be doubts and fears but with the right information and preparation you can level your business up and have a successful expansion. Now that you know all about growing a small business, you can think of when, how, and what to do in order to expand your business. Do not be afraid of taking risks. If you have high demand and have loyal customers, take benefit of the situation and expand your small business. I provided all the information you need. All you have to do is consider which of these suggestions are in favor of your business and how you can implement them in your business strategy!
