When you start a new business, often you have many goals in mind and benchmarks you're striving to achieve on your entrepreneurial journey. However, if you're running a successful start up growth often occurs quickly and rapidly and before you know it, you're operating at a scale that exceeds your expectations and are ready for your next stage of growth.
The question then becomes, "what are the new opportunities, or opportunities I'm missing that will help me to continue to expand?".
The answer? There are a number of ways in which you can strategically generate growth, no matter what kind of business you're running, all while mitigating risk and retaining the essence of what makes your business tick.
Here are our top five opportunities to grow and expand your business, as well as a few tips on how to go about them! If you have any questions at all, don't hesitate to drop us a line.
1. Nurture and re-sell to existing customers
You've probably heard the quote before, it's a lot easier to sell to existing customers than it is to generate new ones. In fact, statistics say that the probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new prospect is 5-20%.
With this in mind, the very first growth opportunity to look for with the lowest risk attached, is to find ways to nurture and sell to your existing customer database. They already know you, they already love you, so naturally, they're your biggest advocates and are interested in hearing what else you have to offer.
The best way to do this is by creating a last connection with your customers beyond their purchase. These connections can be cultivated through:
- Nurture series emails
- Newsletters and EDMs
- Social media channels
- Traditional media such as mailers
- Customer loyalty programmes
This will increase your customer's familiarity with your brand, and nurture them into a space where they know and trust you. Once you've built up trust between your business and existing customers, the next step is to segment your database and identify opportunities.
Identify the customer segments that are more likely to buy so you can focus your sales and marketing efforts on these customers, and perform a gap analysis to better understand where there are opportunities to resell or upsell, and better serve these customers with new products and services.
2. Market to new areas and territories
The next opportunity for growth is to expand into unchartered territories and offer your product or service in a new area, and in turn, a completely new segment of customers. There are two ways to achieve this depending on the kind of business you're operating.
- Based on physical premises:
This is mainly for retail stores that offer a point of sale at a physical premises, or alternatively a scalable hospitality business, and involves setting up a new store in a new location. - Based on digital footprint:
If you're a SaaS business or selling a service that doesn't require a 'physical' presence, this is about expanding your digital footprint and where you offer your service through online search targeting.
The common denominator for both of these strategies is to invest both time and money into researching the new markets your wishing to enter, in order to understand whether there is a enough demand for what you offer and who your key competitors will be.
From there, you'll be able to make informed decisions on how you're going to market to your new audience and tailor your products or services to suit your new customers.
“When you are thinking about expanding into new areas, the first thing you need to do is to determine how to specialize your advertising for your new market,” - advises Tri Nguyen, founder and CEO of Network Capital Funding Corporation.
3. Tap into new sales delivery channels
The third option for growth and expansion is to look for opportunities to transition into a new sales delivery channel to generate more revenue off the same product or service.
What do we mean by this? Well, it's all about taking what you already have and repurposing efficiently. We've seen a lot of the type of growth occur off the back of the COVID-19 pandemic out of necessity, but it's actually an excellent diversification and sales strategy in and of itself.
- If your store is offline: this might involve turning your retail shopfront into an online e-commerce platform where you can sell your same products through an online sales channel. This opens your products and services up to a whole new range of customers and also provides a world of opportunity for marketing.
Beyond e-commerce, we've also seen restaurants and cafes pivot quickly into new sales delivery channels right here in NZ, when our favourite in-store restaurants utilised uber-eats for the first time ever and offered menu items as takeaway selections. - If your store is online: a brilliant way to shine the light on your online store in the real way is to transition into a shopfront. We understand that the overheads involved in a full-blown retail store are significantly more than online, which is why things like pop-up stores and temporary locations are a great way to make this transition.
Alternatively, setting up market stalls and promoting your product or service at industry events (like a home and garden show) are a great opportunity to find a new channel to sell through.
4. Growth through internal hiring
This should go without saying, but a surprising number of businesses don't back themselves enough to hire more people and add to their team as a viable strategy for increasing revenue.
"Hiring the absolute best people you can is a surefire way to ensure fast growth - it's all about having the right team." - Christian Lanng, CEO and chairman of business software provider Tradeshift.
If you're hit the point where you've taken on too much work to manage as an individual sole trader or your small, in-house team is swamped (we're talking to you, Saas gurus!), it's time to pull the trigger and expand.
It costs money to hire people, but if you're strategic in your employment strategy - and there are a number of recruiters who can help you with this - you'll be able to better manage your workload, take on more jobs, deliver to a higher standard and, you guessed it, positively impact you bottom line.
This is also true for retail and hospitality businesses too. More staff on hand means you'll be able to remain open for longer hours / more days of the week, and service more customers at any given time. Plus, if you're anything like most business owners we work with in these industries, it'll afford you a well earned break.
5. Acquisition of other businesses
Last but not least, and this one is the riskier of the bunch but possibly the fastest track to growth an expansion - look to acquire or merge with other businesses.
Obviously this strategy requires a high level of capital to achieve and proportionately, a high level of preparation, research and strategic planning. Our biggest tip on this front, is to carefully select which businesses you'd like to acquire and do your due diligence. That includes checking:
- the new companies financial condition
- the strength and depth of its management team
- the breadth of its client base
- natural synergies between the your businesses and the business you're looking to acquire
It's important to emphasise that this strategy can be risky. CEO advisor Robert Sher points out that approximately 50 percent of merger and acquisition deals fail. How ever, like with all risks, a successful acquisition or merger can see your businesses profitability and growth soar - so make sure to do your research and consult advisers beforehand.
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