A key element of a successful business is understanding the best ways that your business can grow, evolve, and develop – and this includes understanding the basics of growth strategies.
The most common way to think about growth strategies is in terms of how you will increase sales or revenue. This is often referred to as “growth through increased sales”. However, there are many other ways that you can grow your business, including: increasing customer base; improving service levels; expanding into new markets; developing new products and services; and so on.
Wondering “which growth strategy can I apply to my business?” We took a closer look at the basics of growth strategies, and the ways in which this can help your business to grow, evolve and develop.
What Are Growth Strategies?
Growth strategies are essentially plans for achieving future goals. They include all of the activities that you need to do to achieve those goals. These may be things such as:
- Developing new products and services
- Increasing market share
- Improving customer satisfaction
- Reducing costs
- Expanding into new markets
- Acquiring additional customers
- Creating more jobs
- Growing revenues
How Can I Use Growth Strategies To Grow My Business?
A good growth strategy should always be based upon an analysis of your current situation, and then it should also take account of any changes that have occurred since the last time you carried out a similar analysis.
Growth strategies come in two main forms:
- Strategies that aim to increase sales (or revenues)
- Strategies that aim to reduce costs, thereby boosting profit margins and overall growth
The key difference between these two types of growth strategy is that the former involves increasing the amount of money that flows through your business, whereas the latter aims to reduce the overall cost of running your business.
Of course, both of these approaches can be used together. For example, you could try to sell more products, while reducing the price of each item sold. This will help to boost profits, which means you can invest more money back into your business, thereby allowing you to continue growing.
What Are Some Examples Of Growth Strategies?
There are many different ways in which businesses can grow. Here are just a few examples of growth strategies that you might consider implementing in your own business:
- Develop New Products And Services
One of the most obvious ways of growing your business is to develop new products or services. If you’re selling a particular type of product or service, there’s no reason why you shouldn’t offer other variations of that same product or service.
This approach has several advantages. Firstly, it allows you to diversify your customer base, so that you’re less likely to lose customers when something goes wrong with one of your products or services. Secondly, it gives you the opportunity to create new revenue streams, as well as giving you the chance to charge higher prices for your products or services.
- Expand Into New Markets
Another way of growing your business is by expanding into new markets. There are lots of reasons why you might choose to do this. Perhaps you’ve noticed that certain regions within your country are becoming increasingly popular with tourists. You could start offering tours to these areas, thereby creating a whole new source of income. Alternatively, if you’re already operating in a particular region, you could expand into neighbouring countries, where there are currently fewer competitors.
- Improve Customer Satisfaction
Improving customer satisfaction is another great way of growing your business, whether you are selling products or services. If you want to improve your customer satisfaction levels, then you need to make sure that you provide excellent customer support.
For example, if you’re selling products online, then you’ll probably want to ensure that all orders are processed quickly and efficiently. In addition, you’ll want to make sure that your website is easy to navigate, and that it provides clear instructions on how to use any products that you’re selling.
- Increase Your Brand Awareness
Increasing brand awareness is yet another great way of growing a business. By doing this, you’re essentially trying to increase the number of people who know about your company.
To achieve this, you should think carefully about what makes your brand unique. What makes your brand stand out from others? How can you promote your brand effectively?
As you can see, there are plenty of different ways in which you can grow your business, and implementing growth strategies is a great way to get started, and allow your business to reach the next level.
Remember that if you are stuck, there are a number of professional providers of business plan services – such as ourselves here at Practical CFO – who specialise in helping businesses identify the best areas of growth, and the ideal strategies to implement.