Business Growth Strategies Manufacturing – This makes perfect sense, as statistics often tell us that sustaining a business—without scaling for massive growth—is difficult in and of itself.
According to the United States Small Business Association (SBA), about 20 percent of businesses fail before one year, 50 percent fail to reach five years, and 66 percent fail to reach ten years.
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So what’s the secret sauce behind those business growth success stories where small startup owners belong in the glamorous millionaire life?
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But with some valuable market research, a strong understanding of your opportunity, and a killer business development plan, the imagination doesn’t have to be so far-fetched.
In this article, we’ll explore the concept of a growth strategy, some types of growth strategies, a game plan for driving a growing business, and some examples of growth strategies from smart and successful brands.
A growth strategy is an umbrella term for many—if not hundreds—of ways to grow your business and generate more revenue and profit.
Your business growth strategy should be tailored to reflect the unique circumstances of your business, such as:
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In many cases, the growth strategy is as simple as increasing your marketing efforts to reach your customers
There are different types of business growth strategies We will look at five of them: market entry, market development, product development, diversification and acquisitions.
The first four of these are part of a general business growth theory called the Ansoff Matrix or Ansoff Model.
To get a better picture of each of these five business growth strategies, let’s use the example of a makeup shoe company called Shoe.
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One of the most common business growth strategies is market penetration, an internal growth strategy that involves increasing your market share (or acquiring more customers from your current market) with your existing products and services.
Consider Nu Shu’s example: A market penetration strategy would like to reach more millennials to purchase the company’s existing sneaker collection.
Market development, also called market expansion, is an internal growth strategy that involves selling your current offerings to a new market.
Building on Nu Shu’s example, a market expansion strategy might try to sell the same handmade sneakers to a different market, such as Gen Z.
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Naturally, this will involve tweaking the company’s marketing and sales strategies to appeal to this different audience without losing its appeal to its millennial audience.
Product development, also called product expansion, is another internal growth strategy that involves expanding or developing your product line to sell more to your existing market.
Product expansion for Nu Shu may include adding a new line of sneakers to meet different needs of its millennial audience, adding additional features to existing sneakers, or introducing sandals to shoe inventory.
If you have a dropship store, a simple product development strategy can be to add new products in your niche or related niches until you find something that appeals to your audience.
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Diversification is an internal growth strategy that comes with some major risks because it involves selling new products into new markets—a double whammy of uncertainty.
Say Nu Shu decides to sell handmade shoes on Jane J’s Marketplace If you have no experience selling shoes or marketing to Gen Z, you can see how this can be tricky.
This is why diversification is not recommended as a small business growth strategy. If you don’t have a lot of experience in a particular market, and you don’t have additional resources to burn, it’s best to try a “safer” way to grow your business.
An acquisition is an external growth strategy in which you buy another company to expand your operations. It can be almost any type of company that aligns with your long-term business development plans and goals.
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A successful growth strategy involves more than just choosing a direction for your business to follow. It also needs a roadmap that outlines your long-term growth goals and an action plan to achieve them. Below are some tips to help you get started
Of course, setting goals is a common practice in the business world, but with high-level growth goals, you take it a step further.
Basically, you’re mapping out goals that require a five- to ten-year commitment, but each goal is tangible, exciting, and anyone interested “gets” it without the need for any detailed explanation.
How many people do you see yourself employing in the next ten years? How many customers do you expect to get by then? How much do you expect your business to make?
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Set limits for a while and let your imagination lead; Your growth goals seem unattainable and overly ambitious
In ten years, the brand in question expects to generate $10 million in annual revenue and hopes to hit that number with a team of 20, highlighting the amount of market expansion needed to get there. In addition, the brand outlines the key activities needed to achieve its goals
For most growth goals, you don’t need to think about the current state of your business. You just need to map them out in a quantitative way so that a strategy can be easily formulated to help you achieve them.
For each growth goal, there is a set of core metrics that help identify whether your business will be able to achieve that goal. In most cases, the metrics will have a direct correlation to your company’s revenue and customer acquisition goals
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For example, if we talk about the ride-sharing company Uber, one of its core metrics is the number of trips. Why? Because it has a direct impact on the firm’s bottom line If more trips are being completed, and that number is constantly increasing, it means more customers are switching and therefore contributing to Uber’s overall revenue.
You should also determine your current baseline for this metric, so you know what steps you need to take to achieve business growth.
In the hypothetical example from the previous point, we determined that one of the company’s growth goals is to generate $10 million in revenue, and one step to achieving that goal is increasing organic traffic to 3 million monthly visitors.
So if we want to determine the key metrics for BikiniThatSlays growth goals, we can create an annual baseline of organic traffic and retention rates.
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As you can see, a business needs to increase its organic traffic by 100 percent in the next ten years to reach 5 million monthly visitors and increase its annual revenue as a result.
When building your growth strategy, be sure to know the key metrics for your growth goals and how your bottom line needs to change to meet those long-term goals.
Once you’ve identified your growth goals and their key metrics, the next step is to create a plan that makes it easy to visualize the journey to achieving those goals within your growth strategy. The best growth plan is a combination of a strategy and concrete steps to implement that strategy to help you meet your business goals.
Continuing with the BikiniThatSlays example, the growth plan will highlight the steps the business needs to take to increase its organic traffic and customer retention rates, which have been identified as key indicators of business growth.
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To achieve a ten-year traffic goal of 3 million monthly visitors, for example, a business needs to increase its organic traffic to 600,000 visitors per month. Accordingly, the growth plan outlines the sub-steps Bikini Tattles needs to take to achieve that traffic figure.
Since there are multiple ways to drive organic traffic to a website, this aspect of a company’s growth strategy can include publishing new blog posts, creating YouTube videos, and partnering with influencers or guest bloggers to meet its goals in the traffic.
When putting together your own growth plan, be sure to list any small-scale steps you can take to positively impact your primary growth goals. Additionally, conduct a quarterly assessment of your progress to ensure you’re on track and continually drive your growth strategy. Examples of growth strategy
When it comes to fashion, clothes can be yesterday’s news as soon as they appear on Instagram, so what clothing brand Black Milk has done is completely ignore the conventions of the industry – not following trends or seasons, or even joining fashion trends. parades.
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Instead, the brand pursues an internal growth strategy of diversification by creating leggings, swimwear and dresses featuring popular movies, franchises and comic books. It also pumps out a few new designs every month, and most of those articles are based on what’s popular with the company’s prospects.
In terms of marketing, Black Milk Clothing allows its community to spread the word about its business For example, if you search, you’ll find tons of user-generated content