09 May 5 Ways To Grow Your Small Business
Growing your small business can be an overwhelming task, so here we have broken down five ways to expand your business with ease.
1. Increasing Sales to Existing Customers
The simplest way to increase your sales, and grow your business, is to sell more of the products or services you’re selling at the moment to the customers who are already buying them. For most businesses this involves:
- persuading one-off customers to become repeat customers
- finding customers who’ve stopped buying from you and trying to win them back
- selling more of the same products or services to your regular customers – known as cross sell and upsell
By keeping a record of who your customers are, and what you sold to them, you can work out who’s stopped buying from you, and who might consider buying more. Targeting these customers is often a cheaper and more effective way to increase sales than trying to find new ones.
Also, you might want to consider reviewing your prices. Regularly reviewing your prices and checking them against your competitors can be an effective way of increasing your business sales, profits or both.
You should try to estimate the likely effect of different price changes on the sales, cash flow and profitability of your business before making any changes. To do this successfully, you need to understand:
- the ‘cost structure’ of your small business (including regular ‘fixed’ costs, and ‘variable’ costs that change according to your business’ activity)
- the value your customers place on your products and services
Small changes to pricing, like providing loyalty schemes or bulk discounts, can increase sales to both existing and former customers.
2. Attract New Customers
It is generally agreed that it is harder to attract new customers than to sell more to existing ones. However, at some point you will need to grow your customer base in order to grow your small business. Here are some strategies you might want to consider:
- Referrals – Landing referrals from networking and current customers could be debated as the cheapest and smartest word-of-mouth tactic to acquiring new customers. Referrals are a great way for SMEs to gain access to the network of their customers’ colleagues, friends and family. Many are too shy to ask for referrals – but don’t be – they may be the best way to get highly qualified leads. Referral customers also tend to purchase more over time and have high retention rates.
- Partnership Marketing – This means partnering and forming relationships with established businesses that target a similar audience to yours. Through their database, you promote your products and services with a special offer as an incentive to customers of the established business. It’s mutually beneficial as you can reach large numbers of highly qualified prospects which you may not have had access to prior to this relationship. The partnering business benefit as well as it’s a special offer and incentive to their existing customers without incurring any extra costs. For extra incentive to the partner, you could offer a commission scheme or offer to do something similar in return.
- E-mail Marketing – the average return for email marketing was £24.93 for every £1 spent in 2015. Increasing in popularity, revenue from email marketing has increased by 28 per cent in the last year. Targeting the right people with the right message at the right time. To be as efficient as possible and get the most return back, your marketing lists should be carefully segmented and selected.
3. Develop New Products & Services
If your small business is planning to develop new products and services, you should test them with your customers, with just as much care and attention as a new business going to market for the first time. By making sure there’s real demand for what you’re planning to sell, you can find out about any problems and fix them before you’ve wasted too much time, effort and money.
Talk to existing and potential customers and find out about their needs. If you can, develop a prototype as quickly and cheaply as possible. Work out the minimum investment that lets you find out if you’re meeting a real need.
Test it with customers and get feedback. Find out what they’d be willing to pay for it. Try out different prices with different customers in a consistent, realistic way to see what people will really pay. Can you make enough money for a return on the investment you’d need to develop your new product or service?
If there are are other businesses competing for your market, think about what will make you different. Can you provide something better than what’s already available? And is it significantly different or better to what you’re already offering?
Benefits of development:
By developing new products and services, you can:
- sell more to existing customers (making the most of existing relationships is cheaper than finding new customers)
- spread fixed costs like premises or machinery across a range of products
- diversify the products you offer so you’re less reliant on certain customers or markets
4. Select and Train Good People
The people that you hire, particularly in the early stages of your business, will be the most important decisions that you will make. However, all too often recruitment is done as a reaction to events rather than proactive decisioning.
The following tips will help:-
- Be clear about who you want to hire and why – create a job description for the role including the skills required and competencies expected.
- Ensure once you have hired that you put the new employee through an induction programme to help them to adjust and acclimatise to their jobs and working environments
- Set clear performance objectives – and make sure you review those objectives on a regular basis.
5. Get Organised
Firms of all sizes lose out on sales simply because they are not properly organised. Do you have comprehensive policies and workflows in place to help you keep track of leads and to ensure that nothing slips through the cracks? If not, this should be a priority.
Technological solutions like Customer Relationship Management (CRM) software can help you keep on track of the sales process throughout a customer’s life-cycle. You can also keep hold of the details of leads that are not converted, and set yourself reminders to contact them again at a certain time. This can be a vital help in ensuring that you make the most of every lead. Ultimately, this will help to expand your market share.