Ultimately, every small business wants to grow and develop. However, owners need to pick spots and choose to develop their operations in a way that is sustainable and beneficial in the long run. Growing simply to expand the business’s footprint doesn’t always make sense from a financial or operational standpoint.
How can your business increase in stature in an effective and positive way? These pieces of advice can point you in the right direction.
Pick your spots
Theoretically, any small business with available funds could purchase or lease a larger building, hire more staff or order more inventory in a relatively short period of time. However, this scattershot approach to growth offers little in the way of benefits and plenty of downsides. Without a strong plan for how your small business will grow and a deep understanding of the changes required, there are few reasons to push forward.
As the business owner, you have the most information about operations, finances, market conditions and other critical pieces of information about your organization available to you. Use this wealth of knowledge to determine if, when and how your business should expand. By being somewhat conservative in approach and only engaging in expansion efforts when a clear path, goal and benefit are in mind, your can shield your company from the negative effects of unchecked or poorly planned growth.
Differentiate your business
Market segmentation can be an effective path toward targeted growth, as the American Express Open Forum pointed out. Segmenting your market – essentially deciding which customers you’ll target and invest resources in attracting – means more specificity and less uncertainty when it comes to expansion. With your market segment properly determined, your business can make growth decisions intended to create positive results in a more focused fashion.
Defining a market segment for a small business isn’t always easy, but it can provide positive returns in the long run. To understand the advantages of such an activity, consider the example shared by Open Forum: Pepsi’s efforts to move out from under Coca-Cola’s shadow. As Pepsi realized it couldn’t compete with Coke’s broad-based popularity, it moved to target a specific market segment, in the form of younger adults and teens.
Instead of Pepsi fighting a losing battle over the No. 1 cola spot in the country, it decided to become No. 1 in a specific market segment – consumers under age 30. While Coke is still the most popular cola overall, Pepsi has done well for itself within its chosen demographic and has focused more on building its reputation with that audience.
While the differences between multinational soda makers and your small business are many, the basic concept rings true: Focus on the types of customers that are the most loyal, provide the most revenue and have positive feelings for your brand. For restaurants and pubs, as just one example, that could mean catering to a late-night or early-morning crowd, or emphasizing fine dining or family-friendly fare.
Understanding your market and targeting the demographics you want to serve creates the opportunity for targeted and effective growth.
Draw on feedback from numerous sources
Sometimes, addressing a need is the best way to plan for expansion. If customers want your business to enhance its operations in a given area or offer a previously unavailable service, it’s certainly worth considering. You shouldn’t let feedback dictate the path you take toward expansion, but it can serve as a valuable piece of the overall decision-making process.
It’s important to seek feedback through a variety of forms, as only providing one avenue for customers to share their likes and dislikes could skew results. Informally gathering feedback from customers while inside the building, soliciting it on social media and using surveys in person are all viable methods, according to The Houston Chronicle.
Another source of feedback to consider is employees who work directly with customers and inside your facility. Do they recognize any significant issues with processes or workflows that could be streamlined or otherwise fixed? Do they notice any common requests or concerns among customers? Tapping into employees who regularly have their eyes and ears on the ground can offer another valuable viewpoint.
Line up the financials
No expansion effort is possible without the right financial backing. Consider a business cash advance to help make your business development plans a reality.