Growth Strategies for Small Business Owners

People who muster the courage to put up their own business are perhaps the biggest of dreamers. They are bold, and undaunted by the intrusive “what if it doesn’t work out” thoughts.

A lot of small businesses that, over years and decades, have become one of the most beloved household brands, have assisted the nation’s economy and kept it afloat in the most trying times. They have helped provide jobs, and kept the flow of money which really just aids the economy. To the innovators and owners of these companies, we tip our hats.

The ones who are bold enough to take this path in life hope to make it big. To break even, and to constantly be in the Survival Stage of small business growth is not the goal. The goal is to make it big, to own a brand that needs no introduction.

If you are one of these brave dreamers, congratulations. We hope you make it someday. While dreaming is great for putting a smile on your face, to be serious about your aspirations means you have to study your chances. Today, we’re going to help you get one baby step closer to accomplishing your goals.

Wishing for growth for your small business? It starts with a strategy. Today, we’re going to talk about small business growth strategies. And what are small business growth strategies? Scroll down and learn what they are!

Effective Small Business Growth Strategies

Before we go into our entire list of small business growth strategies, let us first define: what are small business growth strategies?

Finance Glossary defines a growth strategy as “an organization's plan for overcoming current and future challenges to realize its goals for expansion”. It adds examples of growth strategy goals and these include the following: increasing market share and revenue, acquiring assets, and improving the organization's products or services.

Used in the context of small business growth, Finance Glossary’s given definition still applies. Now, you asked what are small business growth strategies? Let’s check out our list of examples below!

#1 Price-Skimming

This strategy is used by many start-ups, especially when introducing their product for the first time in the market. This is most effective when implemented by companies whose trade is mostly avant-garde technology, or by an establishment that’s considered the  only one of its kind because it offers services that you cannot find elsewhere.

To give a better understanding of this, think of the newest technology we have been introduced to in the last few years, and how they were mostly priced at exorbitant amounts. Small start-up businesses use this strategy to recover faster from the cost of production and marketing.

The drawback however is that new technology is almost always copied quickly. If another company, or worse, a bigger company could come up with almost the same quality and price it lower, then you can expect a cut on your sales almost instantly. Then again, if you can have an ROI, expand your business, and come up with more products that consumers also love, all before a new competition cuts your market into half, then you’re all set for mighty success.

#2 Product Expansion

While Price-Skimming is pricing your avant-garde products expensively, product expansion on the other hand is creating variations of a similar product to capture another or a larger chunk of the market. Think of that time when Apple came up with those multi-colored iPhone models that were priced lower than previous iPhones.

Some market analysts would argue that, at a time when Apple was struggling to maintain their status in the market after Steve Jobs’ passing, they thought of coming up with more affordable models. Of course, almost as if it was an experiment, the turnout was that people buy iPhones for what they represent: quality, status, style.

Nevertheless, this strategy works for other types of products. A shampoo brand can come up with a conditioner variant, a product that sells toiletries for babies can come up with a soap, shampoo, cologne, and lotion package that consumers can buy all together as one product.

#3 Diversification

Next is Diversification. One look and you’d think it’s just the same as product expansion, but no. Diversification is a growth strategy where new products or services are marketed to a new audience. Among examples of this are the creation of a new product line for one’s current customer base, the creation of a seemingly new product that’s actually similar (albeit has subtle new features) to an already existing product or service, and the creation of new products or services for an entirely different target audience.

#4 Market Development or Expansion

While product expansion meant selling a slightly different product or set of products to the same market, market development or expansion on the other hand, is a strategy that allows a growing company that is still struggling to find its footing in its market, to sell existing products to new markets in order for them to increase or widen their market share.

This can mean selling products to another country, a different target audience, or franchise the product or service brand in order to garner higher revenue.

#5 Market Segmentation

Think about this. A small convenience store sells the same products as bigtime groceries. While they both cater to people needing basic commodities, a small convenience store that’s just been starting out, can target graveyard shift workers who may need stuff in the wee hours, when groceries have not even opened yet.

That’s what this strategy is, it is, essentially, picking fights you know you can win.

#6 Market Penetration

Market penetration is a growth strategy that allows you to increase your market share through selling your products at a lower price than the competition, offering big discounts, selling in bulk with enticing discounts, and inviting more distributors to sell your products.

#7 Cost Reduction

This strategy is pretty straightforward. When you are starting out in your business, you want to cut costs, this way, you can operate with limited funds as you attempt to earn revenue.

You can cut costs through many ways such as going paperless, go for online marketing instead of paying big bucks on outbound marketing strategies, and hiring part time employees while you are still finding your footing, financially speaking.

#8 Implementing an Inbound Strategy

Inbound Marketing, Inbound Sales, and practically the entire Inbound Methodology is an inexpensive, but absolutely effective strategy that small business owners who are still just starting out can implement in their operations.

The expenses in its implementation are very cheap, and it drives  home sales and creates revenue long after you have first implemented it.

See more here: (Insert Link to Inbound Methodology)

Final Take: Why Consider Small Business Growth Strategies?

We have given you a lot but perhaps this is really just the one question you need answered: why consider small business growth strategies?

We can discuss this at length, but we can only really give one answer to those small business owners who are asking themselves the same question. One answer, that will be sufficient enough and encourage small business owners to implement one of these. Here it goes.

Why consider small business growth strategies?

No rational business owner will ever refuse growth.