Tips on Growing Your Small Business
As a small business owner, your primary goal is often about survival. And, while this is essential, directing your efforts to business growth strategies, whether it’s diversification or marketing, is the best approach to ensuring long-term financial stability.
Remember, there’s no “one-size-fits-all” method for growing your small business. However, there are several best practices for business expansion you ought to consider.
1. Identify the Most Suitable Business Entity Type
Your business structure can significantly affect your business’ growth hence why it’s always a good idea to seek guidance from tax professionals. For instance, let’s say you operate your business as a sole proprietorship. Here, you’ll only have to worry about few compliance regulations.
In contrast, choosing to be a limited liability company (LLC) could mean more filing fees. Also, if eligible, an LLC can select the S Corporation taxation requirements or the default tax expectation.
2. Be Informed About Your Customers
Understanding your customers’ needs is a proven way to ensure whatever your company offers becomes a hit. Studies have found that existing customers are often the easiest way to improve sales. Besides that, improved customer retention by 1% tends to increase company value by up to 7%.
Asking for feedback from your customer base can help you understand their needs. Some standard methods include online reviews and surveys.
3. Prioritize on Customer Service
As you grow your business, we recommend focusing on customer satisfaction by providing excellent customer service. Once you know their desires, your next goal should be to make them feel valued.
For instance, you could work on improving your call center agents’ customer service skills. We live in an age where customers hold power. So, what does this mean for your business? A 2020 Sprout Social index found that “40% of consumers anticipate brands to respond in less than one hour after they reach out on social platforms, while 79% count on a response within the first 24 hours.”
Several ways to improve customer service exist. These include building your employees’ capacity, personalizing your communications with customers, and leveraging technology to improve customer relations.
4. Ask Your Existing Customers for Referrals
Your active customers are a gift that keeps on giving. These users can be instrumental in bringing in new customers. While they may already be recommending your products or services to people in their circles, it’s crucial to ask them for referrals.
Referral or word-of-mouth marketing is one of the most effective tactics when you want to generate new leads. According to a New York Times report, 65% of new customers result from client referrals. Also, a 2013 Nielsen survey of over 29,000 people revealed that 84% of participants were more likely to purchase if the referral came from a loved one.
Here are some of the proven referral request approaches.
- Create value through unmatched service
- Offer incentives such as a discount code
- Request customers to tag your products or services in their social media posts
5. Limit Your Business Costs
Another valuable tip when expanding your business is to reduce your costs, specifically those relating to business operations. Doing this can increase your cash flow and promote stability. Two standard approaches for reducing these costs exist, namely:
- Terminating low-performing products or services
- Boosting your sales through improved marketing strategies
6. Build Company Values and Communicate them With Employees
Every business has its core values. These values set the tone for how everyone from the leadership team to the entry-level staff treats each other. Your company values also ensure your employees understand the company’s unified goal and their roles.
Besides creating these values, it would be wise to develop clear employee policies and procedures. We recommend hiring an employment lawyer for counsel on the state and federal laws connected with these policies and procedures.
7. Expand Your Reach
Expanding your reach means improving access to your services to reach an untapped consumer base. It would be a good idea to:
- Set up shop in a new location
- Identify and share various applications for your products and services
- Aim at a new demographic
Diversification is yet another business growth strategy that could boost your sales and create new revenue channels. One company that has been successful in adapting to the pandemic is Johnny D’s casual diner. Last year, when the restaurant had to close, David Bartlett, the owner, adapted by converting his bus into a private dinner spot for couples
9. Listen to Your Employees
As you may well know, your staff can make or break your business, so you should show them that their inputs matter. Ensure you listen to them and involve them in the decision-making process.
10. Carry Out a Competitive Analysis
You must understand your competition for you to grow your business. By performing a competitive market analysis, you’ll know what your competitors are doing and gain a keen insight into consumer needs. And as a result, you’ll know which areas you need to improve
11. Seek Funding
Finally, you should consider applying for funding if your current resources can’t fuel your intended growth. If you’re wondering where to begin this search, the U.S Small Business Administration is an excellent place to start.
Growing your business requires patience. But most importantly, business expansion requires you to implement practical strategies such as asking for referrals, improving your customer experience, and valuing your staff. Remember, every business is different, and several factors such as entity type and location come into play. Therefore, you should find what works and use that strategy to grow your business.