Small Business Basic Strategies – According to the World Bank, small businesses account for approximately 90 percent of all global businesses and more than 50 percent of the global workforce. In addition, SMEs in developing and formal markets account for 7 out of 10 jobs.
Although their combined share is small compared to large global enterprises, they help create new jobs, increase the tax base and promote development, boost local and national economies, and are a powerful force for innovation.
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So, is it any wonder we rarely see small business growth stories? What stops them?
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Several research studies on small business growth (and failure) over the past three decades have attributed this to factors such as regulation, economic conditions, access to technology and business practices.
Without a growth strategy, your business and sales team may simply be reacting to changing market conditions and not prepared to ride the tide or grow sustainably.
Although small businesses face deeper resource constraints than larger enterprises, they have the agility to help them execute growth strategies more easily.
To that end, this article focuses on 4 key growth strategies that can help small businesses pursue ambitious growth.
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Innovation is where you come up with your business idea and turn it into an innovative solution to deliver value to your target audience.
Radical innovation involves applying new ideas to new markets, sometimes even leading to the creation of new industries.
Architectural innovation involves taking an existing idea, strategy or solution from one industry and applying it to a new market.
Disruptive innovation involves creating new solutions to serve existing markets. Because the market already exists, practical solutions can be better tested for scale.
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Basically, an idea is the formation and delivery of originality of thought, and innovation is the choice of the right business idea, its refinement and implementation in business.
Innovation is the basis of industrial progress. Small businesses can work on ideas and innovations within the organization to keep R&D costs low. They can do-
Revenue generation is the successful conversion into money of the value a business provides to its customers. Access to new and dissatisfied revenue generation groups can be achieved by reconfiguring existing revenue models or introducing new models.
It is common for businesses to focus on improving or changing existing revenue generation strategies to stay in the current market and keep things simple.
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A subscription model where customers pay a recurring price for goods or services at regular intervals, month to month or month to month or quarter to quarter.
Pay-as-you-go or transaction-based revenue generation models are where customers pay for usage or pay for bulk or limited usage.
Here, the business outsources all or part of its revenue to a third party. In practice, the third party is reimbursed from income that has been established as a partnership business agreement.
Similar to licensing, but the difference is that the entity can use the parent company’s branding and marketing strategy. The parent company earns revenue by allowing multiple entities to offer its products or services to customers.
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Maintaining the stability of entrepreneurship is a major problem. However, in a volatile market, it is more important to invest in growth than trying to hold on to stocks that are declining. They can do-
A frequently used growth strategy, strategic partnerships help expand opportunities without the hassle of investing in internal talent and assets. In addition, businesses can reduce risk, operate more efficiently and adapt more quickly to changing market scenarios.
A business agreement is where two or more entities enter into a legally binding agreement to form an independent business entity that works toward a collective goal.
– A joint venture is a structured partnership formed for a contractual arrangement to combine resources, assets, talent and products/services for a specific purpose.
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In a joint venture, a small business can partner with another business entity to create an entirely new business entity to expand its capabilities.
– Microsoft health intelligence products with Sony and Ericsson for telecommunications, General Electric GE to form Caradigm with health technology
Mergers and acquisitions (M&A) are where two businesses combine to form one company. While a merger, also known as a “merger of the same,” is where two companies come together, an acquisition involves one company acquiring another.
Small businesses often lack capital and their growth plans depend on their financial situation. Today, small businesses have access to many financing options for business plans and growth strategies.
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Bootstrapping – Raise capital by selling personal assets, applying for low-interest government loans or borrowing from family and friends to finance your plans.
Seed Funding A trend this decade, seed funding is where businesses seek investors by selling equity or starting a business. Seed funding is classified based on capital required and track record.
– GGV Capital invests in Airbnb and Slack, Sequoia Capital invests in Indigo Paints, SoftBank invests in OlaCabs and WeWork
Bank Loans – This may be the preferred model in this list, bank loans are offered to small businesses to generate income that help them overcome obstacles such as investment and loan origination time.
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Investment and financing options are the new norm. This is because: “As long as my innovation and revenue generation strategy is right, I will look for any investor. This is a better option than taking a loan from the bank or selling my assets.”
This strategy focuses on existing products or services and business development in the current market. The difference between this strategy and point 2 is how it faces competitors.
Here, the business expands into new geographies and targets new customer segments to sell current products/services. They innovate or enter markets where there is less direct competition for their existing products/services.
Therefore, the direction of growth requires restructuring not only to improve planning and management operations, but also to try to solve the challenges faced by its employees.
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Essentially, restructuring exercises mean facilitating change by bringing in neutral talent. Hiring a consulting firm or private consultant may be expensive, but this is not uncommon.
No matter what business you’re in, you want to make sure your business thrives. But this is not a matter of short time. Business development is an ongoing process and requires hard work, patience and a smart approach to keep your business running. So let’s look at some tips you can use to give your business the best chance to grow.
Market research helps you understand not only your existing customers but also your potential customers. You need to understand your target market and understand their needs. This will help you determine how your business can grow and make changes to meet those needs. In addition, study your competitors, their strengths and weaknesses to decide how to grow your business.
Before you can expect your business to grow, you need to make sure you have the right team in place to achieve your business goals. When your employees are engaged and committed to a common goal, your business will stay on track and continue to grow. Plus, by delegating tasks to the right people, you can free up your time and energy to focus on tasks that help you push your business to new frontiers.
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A sales funnel is a customer’s journey with your business. When they enter your business, they are at the top of the funnel. When they buy something or sign up for a service, they’ve successfully passed the funnel. As a business, it is your responsibility to move your customers through the sales funnel. You can send them updates about your business, offer discounts or contact them regularly to increase their interest in your business.
What your customers say about your business can make or break your business. As you strive to deliver the best service/product to your business, you should focus on delivering a quality experience to promote your business on social media and other websites. If you screw it up, they’ll let the world know sooner rather than later. Your current and potential customers should be happy. Improving customer retention techniques can do wonders for you.
Networking events are a great way to connect with industry insiders and increase brand visibility. Such events allow you to attract new customers and develop your business. Such a relationship can benefit you for many years. So check out your local professional organization to learn about upcoming events and spread the word about your business. Take the opportunity to promote your business by meeting other business owners, speaking as an industry expert, or setting up a booth.
Nowadays, many consumers are more interested in brands that align with their values. Corporate social responsibility (CSR) means being aware of how your business affects society. When you show people what your business does to positively impact society, you automatically win customers. For example, running a green business shows society that you don’t want your business to damage the environment.
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You definitely want to sell your core product or service
