How to Grow Your Business

From the first day that you start your company, you are thinking how to grow your business. You are always searching ways to expand your enterprise hoping that you will find the most effective business development solution.

Allow me to help you organize your thoughts, based on the Growth Strategies that exist out there.

Market Penetration

The first growth strategy is to market your existing products in the market that you already operate. In other words, this means to expand your market share, to penetrate even more your existing products or services in the market that you use now. In order to achieve that, one tactic would be to lower your prices in order to be more competitive so that you can increase your sales volume. Another tactic could be to increase the offered quality while you keep the same prices. Do not forget to communicate to your clients those changes. Generally, please keep in mind that the above-mentioned tactics will lower your profit margins, but your overall profitability should be increased due to the growth of sales.

Market Expansion

The second growth strategy is to market your existing products in a new market. This strategy is most appropriate for businesses that cannot expand more in the market that they already operate. Fierce competition might be the basic reason.  Another reason could be, if you are a local small business, to have covered fully the market in the town you operate now. In this case, you can expand into a new market by opening a new store in another town. The growth strategy of Market Expansion applies also to companies that expand from BTC to BTB or the opposite.

Product Expansion

Another strategic option for growth is to expand your existing products or services to the market you operate now. This can be done by introducing new product lines with new features.  In this way, you will increase your sales, therefore your profitability. This strategy requires innovative thinking and culture inside the business.

Diversification

In this case, a business can expand by introducing new products or services to new markets. This is a growth strategy with the highest risk because both variables are new (products/services and markets). It is like if you start a new business. The only difference is that you base this expansion in a pre-existing company that has, at least, an established brand name and the necessary resources. Moreover, a marketing research is essential before any action. Usually, this strategy is not the first choice of growth for businesses. However, this does not mean that you should ignore it as an option.

Acquisition

A company can grow by choosing to buy another company. This strategy is usually an option for bigger companies or at least for companies that have the resources to do that. This strategy has also a risk, but it is lower than the Diversification strategy. In this strategy, a business can buy a business with similar or different products/services in the same market of operation or in a different one.

Merger

Finally, there is also the growth strategy of merging your company with another in order to become larger and stronger. It is not necessary for the two companies to have the same products/services or to operate in the same market. There is also a risk in this strategy due to management, operational and cultural issues.

It is up to you to conduct a situation analysis in order to have a clear picture of your position so that you can decide wisely how to grow your business. Last but not least, after you choose what is best for your company it is extremely important to plan it very carefully.