Growing your business doesn’t happen overnight. In fact, there are many factors that come into play when formulating an effective business growth strategy.
The success of your strategy is what will drive your business to not only be a dominant player in your market, but to continue growing.
Business growth strategies for your business
Business growth strategies will vary from business to business, however the main principles remain the same. Igor Ansoff, also known as the “father of strategic management,” defined these principles in 1957, all of which are still used as reference points for many businesses to this day.
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Market Penetration
This business growth strategy involves utilising existing products and services to grow in your existing market. This strategy involves little to no change in your current every day running of the business.
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Market Development
This strategy is when a company tries to expand into new markets, with little to no development to the products/services.
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Product Development
Opposite to market development, product development sees a change in the product/services targeted to the existing markets.
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Diversification
Diversification is when a business introduces new products/services to new markets.
Market penetration is the business growth strategy with the lowest risk – as it utilises the business’s current products/services and the market is known.
However, it’s important to ensure you don’t get “stuck” solely in this quadrant, as there is a chance that the market will reach saturation – when the product becomes diffused. If and when the market becomes saturated, business owners need to look to other growth strategies, such as market development or product development.
The more unfamiliar the market and products become, the greater the risk. Because of the risk level and chance of saturation, achieving business growth is about spreading your marketing efforts across various strategies and not putting all your stones in one basket. That is, undertaking market penetration, whilst also road testing the other strategies.
Developing an Effective Business Growth Strategy
When determining your business growth strategy, it helps to have the following 5 key pointers to help you:
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Define and establish your unique selling proposition (USP)
What is it that sets you apart from your competitors? Once you have defined your USP you’ll be able to align this with your growth strategy.
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Know who your ideal customer is
Age, demographic, job title, etc. Pinpointing your ideal customer will enable you to choose a growth strategy based on where you will be able to target this customer.
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Understand your business’s finances
Have a full scope on your business’s finances – that is understanding your cash flow, balance sheet and profit & loss. Know the various revenue streams and who makes up these streams.
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Have visibility over your competitors
What is your competition doing to grow their business? How can you be different? Find out what sets you apart from your competitors.
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Focus on your strengths
Once you know what sets you apart from your competitors, focus on your key strengths and what growth strategy allows you to push these strengths out into the market.
Keep Your Strategy Simple
To help you identify the best business growth strategy for you, here are 5 points to keep in mind:
- Product development should always be a logical extension of your core product
- Before diversifying ensure you test, refine and optimise your core business
- Listen to your customers and build products based on the market need
- Growing too fast can be detrimental to your business
- Work out what your business growth drivers are and focus on these
There are a number of ways to fund your business growth strategy. If you choose to access external funding, at Ledge, we have a team of business finance specialists who will take the time to gain a solid understanding of your situation and why you wish to apply for a business loan. They will then talk you through the various financing options and guide you through the loan process.
With our extensive knowledge and expertise, we will be able to help you identify the finance strategy that best suits your unique set of requirements.
