- There are almost 28 million small business
- They have generated over 65% of the net new jobs since 1995
- And, they employ over 50% of the working population
Small business continues to be the source of most net new jobs each year. It appears that more small business are succeeding than those of decades past.
- Approximately 543,000 new businesses get started each month
- 7 out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years and a quarter stay in business 15 years or more.
That’s around 25% percent, then, that make it past 15 years. I know if you are a small business owner, you want to be one of the 25%. Staying in business takes a strong vision and requires growth to combat rising costs and to enhance stability.
So how do you grow strategically so that your business will be healthy and profitable for years to come?
How Most Small Businesses Grow Initially
Most entrepreneurs start their business on the side because it is a passion or out of necessity because they need a job. Off the top of my head, my clients began:
- as a consultant after being laid off from a job.
- in their garage with all of the initial parts and equipment charged on a personal credit card.
- frustrated leaving a family business and starting a new business on their own.
- as a private practice in a field that they loved.
- taking over a family business they had been working in for a few years or many years.
They either began to practice what they loved on their own or fell into the business because they needed to work or keep working.
To grow, many small business owners begin to accept any work that a customer needs and that they can do. However, this results in “one-offs,” a single job or project that is rarely if ever repeated.
This becomes a difficult model to maintain growth, as you have to replace most of the revenue each year with new work, new projects, and new processes.
Staying Focused Will Increase Sales More Quickly
I am a big fan of establishing core products or services within a niche. The niche could be the industry or type of client or it could be the service or product itself.
The more focused the products or services, the more opportunity for efficiencies in your processes and consistency in your service. You and your team can create high quality goods and services that you become known for in your niche.
Once a small business owner is ready to grow it feels like we are being called to start adding new and different products and services. You aren’t being called to do that. That is Satan trying to tempt you to get off track.
5 Efficient Strategies To Grow Your Small Business
There is another way. Actually there are several ways.
- Grow geographically. You can take your products and services and grow your territory. If you are growing your territory physically, with bricks and mortar or people on the ground, it is important to create a specific strategy for growth. Usually contiguous geography, the city or state right next to home base is the best way to go. It costs less and can be better managed if it is close by.
- Cross-selling. Even Chick Fil A, with their singular focus on chicken, has chicken cooked many different ways. They also offer fries and fruit and incredible desserts. I am sure that every store manager checks average ticket daily. Are they selling more to each customer? Look for selling more to your current customers by offering them everything you sell.
- Grab more market share through marketing. If you are a small business, less than 500 employees, chances are you do not have the majority of the market share even in your niche. Go after new customers through getting your name out. Marketing has become more affordable with the advent of social media and online marketing. It is a way to get the message out more quickly than you can do on your own.
- Grab more market share through targeted sales strategies. Let’s face it. We all know that the ‘build it and they will come’ is not a winning sales strategy. To grow market share you may need to add sales people, focus on sales blitzes for a specific product or service for a given time, or find alternative sources of sales through other distributors or affiliates.
- Add synergistic products or services. Staying in a niche doesn’t mean you will only sell one thing in the same form forever. There are related services that go hand in hand with each other. It makes sense for a CPA to add tax consulting to their tax preparation services. It is efficient for an equipment repair service to sell extra parts or to add a service that travels to you to repair your equipment.
All of these are strategies that can be used to grow wisely and efficiently. These strategies focus on core competencies of your business that you have developed and can sustain.
Use These Strategies to Plan Growth for the Coming Year
As we approach the new year, which strategies make sense for your business? Is there one above that you can focus on in the new year? Can you sell more to your current clients? Are you getting the word out through marketing?
I want to challenge you to write down each of these growth strategies and jot down 2-3 ideas of how you could implement these in your business. Which one is the strongest strategy for you to start with? Use this one strategy to build your budget and plans for growth in the new year.