Starting and launching a business is just half the challenge you face when you decide to work for yourself. Over time, it will become more important to focus on growing your business to drive greater profitability and achieve specific goals.
While you could just keep doing what seems to have worked so far, you may soon discover that those tactics only work for so long. A growth plateau tends to emerge, or the environment changes. Nothing stays static, particularly in business.
Instead, consider these five ways to grow your business's bottom line:
1. Commit to selling more than your competition. While it may sound obvious to do this, especially when you're already so passionate about your business, you still may not have been doing enough. Devoting yourself to the sales process means setting aside a designated number of hours each week for you and your team members to just work on selling.
This isn't just about cold calls or email blasts; it means focusing on building relationships with prospects and existing customers by getting to know them, spending time in conversation rather than a sales pitch, and identifying the best ways to provide value. This sales focus also involves working more closely with marketing to share your sales experiences and analytics to better support each other's shared goal to grow the business.
Also, consider ways of engaging with your current customer base to make them salespeople on behalf of your brand, influencing others to buy your products or services.
2. Fuel business growth with additional alternative funding methods. Behind every growth stage is the need for greater funding than you may currently have available. Getting to the next stage often requires more talent, equipment, marketing and product development.
One approach is to do asset financing, leveraging the equipment and other viable assets you currently have to add more. Using the value you've built already keeps you on track to repay the financing while you have a short-term funding vehicle.
Selling ownership in your company may also be a viable option. Depending on your business structure, you may be able to exchange part ownership for a capital investment if you have an LLC or partnership. You could sell shares in your company as a corporation, following your bylaws and articles of incorporation.
3. Add locations and channels. With the aforementioned funding, you can also open another location or expand into a new channel. If you offer a product or service, another location gives you an opportunity to reach an entirely new audience of future customers. Additionally, if what you offer works in an e-commerce environment, you may consider selling through an online marketplace or social media site in addition to your website.
In either case, make sure you have the supply chain, logistics and distribution reach in place to handle a larger territory. It may be advantageous to seek out strategic partners who can help you create a larger distribution network. Alternatively, outsourcing the development of locations and channels may also help you get up and running faster in new market areas, building on the network that others understand or have already established.
4. Create a new revenue stream through a subscription or franchise business model. If you've got a great idea that worked well in your local market, another option is to replicate that idea across geographic markets as a franchise model. This provides the opportunity for others to get up and running in a proven business while you reap the growth rewards of a percentage of each franchise location. The capital expenditure to add those additional locations comes in the form of a payment from the franchise buyer, allowing your brand to spread.
Alternatively, if you offer other types of expertise through your existing business as a thought leader, you might be able to create a subscription model to package that knowledge into learning or courses that your audience wants.
When deciding to enact either of these growth strategies, it's important to do the due diligence necessary, similar to when you started your original business. This means checking for sustainable demand, researching key markets and assessing the competition.
5. Shrink your expenses. Too often, small business owners focus on making money as the pathway to business growth. In reality, you can grow your business just as effectively by reducing outlays. When you tackle both, you'll pad your bottom line even more.
You may not need to be counting paper clips here; you could be assessing the inventory you carry to align it more effectively with seasonal demand. Or you could finally let go of making those products that are going nowhere. Of course, you'll also want to question all spending to ensure it makes the best business sense rather than just cut costs across the board.
While many advisors admonish small business owners to take it slow when they scale, the better approach is to scale thoughtfully. Speed isn't necessarily wrong. When you look at how to grow your business and spend the time and effort to research, plan and strategize, your next step up could come quickly because you've put all the pieces in place already.