Growth isn't just a priority -- it's a necessity for your small business.
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But growing a company takes a lot more than good intentions. You need a plan. With dozens of strategies to choose from, here are four that could put your company on the fast track to growth.
Not every growth strategy is appropriate for every small business. The key to finding the right growth strategy is properly matching it to your company and its specific marketplace. Since the wrong strategy can devastate your business, it's important to determine whether you are selling new or emerging products in a new or existing market.
Diversification (New Products/New Market)
Diversification is a high-risk growth strategy, largely because both the products and the market are unproven territory for the entrepreneur. Though trailblazing emerging products and markets can be exhilarating, it can also be terrifying given the fact that neither you nor anyone else can rely on prior experience for reassurance. But if innovation is one of your company's defining characteristics, a diversification strategy will eventually become second nature. To achieve growth, you will need to be realistic about the risks you face and crystal clear about what you hope to achieve.
Market Development (Existing Products/New Market)
A more common scenario is one in which a small business owner attempts to develop a new market for their existing products and services. The new market can be geographical (e.g. foreign export) or an untapped segment of a domestic market. It's even possible to develop a new market for existing products by adjusting the product's packaging or expanding the product's distribution channels. In any event, a market development growth strategy requires a working knowledge of existing markets and the ability to gaps in the marketplace that can be exploited to your advantage. If your marketing skills are not up to the task, you will need the assistance of a skilled marketing professional to achieve growth in your new market.
Product Development (New Products/Existing Market)
A growth strategy based on product development is the mirror image of a market development strategy. Instead of pioneering a new market with existing products, you attempt to roll out a new product(s) in a market with which you are already familiar. Many small business owners are more comfortable working in this kind of scenario because they already possess an awareness of prevailing market conditions. However, a product development strategy can be just as challenging as a market development strategy because it often requires the business to develop new abilities and continuously adapt the products until they achieve marketplace success.
Market Penetration (Existing Products/Existing Markets)
Businesses that find themselves in a situation that involves neither new markets nor new products are forced to grow through a market penetration strategy, a strategy that is designed to give the business a greater percentage of market share. This type of strategy usually seeks to gain a competitive edge through pricing, marketing, or other initiatives. Additionally, market penetration can be achieved by increasing customer usage through loyalty programs and incentives targeting your existing customer base.