HomeBUSINESSTop 8 Lessons on How to Grow your Business

Top 8 Lessons on How to Grow your Business

In layman’s terms, a business means an organization where people work to make and sell their products or services for a profit. Businesses of any size and type are constantly looking for ways to expand their market share or increase their revenue with time. Growing your business is not easy! There really isn’t an easy one-fit strategy to grow your small business. But there are a few strategies you can implement to give your business the best chance at growing. It includes a lot of planning, taking calculated risks, conducting sophisticated market research, etc.

Business growth is said to be achieved at a point where – your business expands its production or manufacturing, its customer base, diversifies its products or services, or increases its brand value. There is no one way to grow a business, but identifying the right opportunity is crucial. That requires a complete understanding of your business and its performance. Growth is important for long-term survival in the market.

In this blog, we have put together a few key strategies to grow your business or start-up.

1. Use Market Research to Grow Business

One of the first strategies for the growth of your business or start-up is market research.

Market research not only helps you better understand your target market, or existing customers, but also your potential market and customers, and most importantly your competitors! Knowing your competitor’s strengths and weaknesses can also help you drive your decisions accordingly.

Market research is all about gathering consumer feedback on your product or service and collecting information to determine whether there’s a fit for your idea and whether it’s something people will pay you for.

Market Research
Market Research

Gathering primary data and secondary data on your Business and Industry to conduct fruitful market research is a good starting point.

As you dive into market research, it’s essential to understand common start-up terms to effectively communicate and navigate the business landscape. Our blog, ‘21 Start-up Terms You Should Know About,’ provides a glossary of key phrases and concepts that every entrepreneur should know. This foundational knowledge will help you make informed decisions and speak confidently with potential investors and partners.

What is Primary Data?

The data gathered from the customers or the general public directly. It helps you to determine your product or service’s pros and cons. It serves as a guide in deciding how to price your product or service.

What is Secondary Data?

Existing data that can be used to retrieve customer information. It includes government census data and surveys done by other companies and organizations. Secondary data gives us a macro view of the marketplace.

Conducting market research eases the decisions to be taken for the betterment of the business, and deciding the right market for your product or service. It helps in knowing your competition and the ways to beat it.

You can use social media for cost-effective analysis, such as gathering feedback on a new product with Twitter polls, testing ads on Facebook, and even finding brand ambassadors on Instagram.

2. Focus on Customer Retention Strategy

This strategy accelerates business growth as well as reduces cost.

Customer retention tells us that it’s not enough to just get new customers for your business. You also need to hold on to your existing customers. When you increase customer retention, you’re building customer loyalty, which can then increase sales.

It costs more to get new customers than it does to keep your existing ones. So, focusing on retaining customers will decrease the cost spent on something that is not a guaranteed investment.

Customer Retention to grow business
Customer Retention

Enhancing customer retention strategies can significantly benefit from additional insights and advice, which you can find through various online resources. Check out ‘YouTube Channels for Business Owner and Entrepreneurs‘ for a selection of expert channels that offer free, valuable advice on growing your business and retaining customers. These resources are ideal for entrepreneurs looking to expand their knowledge and find new strategies to implement.

Follow These Steps to Increase Your Customer Retention

  • Prioritizing your customer service
  • Building trust with your customers, so keep your promises!
  • Taking customer feedback
  • Offering unique services and promotions to your existing customers
  • Using a Customer Relations Management (CRM) System
  • Creating customer loyalty programs
  • Engaging with customers on social media

Customer retention helps you understand how loyal and satisfied your customers are, how strong your customer service is, and if any red flags may turn off your potential customers. Focusing on customer retention pays dividends in the long run.

Use this formula to calculate your Customer Retention Rate (CRR),

CRR = ((Customers at the end of a period – new customers during this time period)/Total customers at the start of the period) x 100

3. Consider Merger (Strategic Partnerships)

This strategy includes the merger between two different businesses, thereby forming strategic partnerships to increase your brand value and visibility in the market. A strategic partnership with another business can give you the chance to reach a broader network of customers.

A merger is an agreement that unites two existing companies into one new company. It is commonly done to increase the business’s reach, expand into new segments, or gain market share.

When considering strategic partnerships or mergers, it’s crucial to understand the different business structures that can influence these decisions. Our blog, ‘Sole Proprietorship vs LLP vs Private Ltd: Business Basics,’ explains the benefits and limitations of each type, helping you choose the best structure for your expanding business. This knowledge is key to making informed decisions about mergers and strategic partnerships.

Types of Mergers

Horizontal MergerBetween 2 companies operating in the same industry. It is typically between 2 or more competitors offering the same products or services.
Vertical MergerBetween companies operating at different levels within the same industry’s supply chain that combines their operations.
Conglomerate MergerBetween companies engaged in unrelated business activities. A pure conglomerate involves unrelated companies and a mixed conglomerate involves companies that are looking for product or market extensions.
Congeneric Merger (product-extension merger)Between companies in the same market that sell different but related products or services.
Market ExtensionBetween companies in different markets that sell similar products or services.

4. Explore Acquisition

Acquisition means when one company purchases more than 50% or all of another company’s shares to gain control of that company. This is one strategy where one company acquires the other company to accelerate growth and expansion by increasing its resources.

It is primarily done to diversify, gain market share, increase customer base, reduce cost, seek economies of scale, and for the advancement of technology. It is also done to eliminate competition and to enter into foreign markets in the long run.

Acquisitions have their cons too, as they can also be time-consuming due to complex legal procedures and paperwork. It is also subject to internal and external negotiations, investigations, audits, and reviews. It can cost a lot of money other than the actual buyout, legal fees, tax implications, etc.

Acquisitions can offer significant opportunities for growth, and understanding diverse perspectives can be incredibly beneficial. ‘Women Entrepreneurs in India‘ highlights the unique challenges and successes of female entrepreneurs in the business world. This blog can inspire and provide valuable insights on overcoming obstacles and thriving in competitive environments.

Types of Acquisitions

Horizontal AcquisitionWhen a company buys another company that offers similar products or services.
Vertical AcquisitionWhen a company buys another company that produces a product in its existing supply chain.
Congeneric AcquisitionWhen one company buys another company that offers different products or services but caters to the same customer base.
Conglomerate AcquisitionWhen one company buys another company from a completely different industry.

5. Diversification to Grow Business

This strategy is to grow your business by diversifying your products or services into new markets by creating new products or services.

Diversification is the practice to introduce a new product or service into your supply chain to increase the profits of your existing business. The new product or service could also be a new segment of the industry.

Offering new and different products or services can help you get new customers. But do thorough market research prior to diversifying. This will help you identify the right opportunities for new products or services in the market you want to expand your business in.

As you consider diversifying your business, it’s also important to ensure you have the essential skills to manage this growth effectively. ‘Do You Have These 7 Basic Skills for Becoming an Entrepreneur?‘ discusses the crucial abilities every business owner should develop to handle new challenges and opportunities effectively.

Types of Diversification

  • Horizontal Diversification – when you create new products or services that are complementary to the existing products or services.
  • Concentric Diversification – when you create new products or services that are similar to your existing products or services.
  • Conglomerate Diversification – when you create new products or services that are entirely different and unrelated to your existing products or services.

6. Why Networking is Important?

Networking as a growth strategy is to increase your brand visibility to attract new customers!

The Art of Networking
The Art of Networking

It is for those working in the social impact is the best growth strategy. It should include a plan to build and manage a network with individuals or firms to achieve desired yet shared goals. Networking will lead to an increase in your customer base and your brand visibility which will in turn grow your business! 

You can participate in events, to meet similar business owners. Networking will take up your time, money, energy, and other resources. But its ROI (Return on Investment) pays off by finding the right opportunity to help you grow and expand your business. 

There are Two Ways of Networking:

  • External – to seek opportunities outside the organization, the right individuals, or firms.
  • Internal – looking for growth opportunities within the organization.

7. Consider Franchising

This strategy is less about hustle and more about growth! It’s a growth strategy for small as well as large businesses.

Franchising simply means selling your business rights to an independent owner, who then operates their own franchise of your business. It is a commonly known business expansion strategy. A franchise increases the number of locations of your business, which ultimately increases brand visibility. Hence, it leads to more sales and revenue!

Two parties enter into a franchise agreement, allowing the franchisee to use the franchisor’s brand name and value. The sale of products or services is primarily due to the associated brand. This essentially amounts to the franchisor leasing out its intellectual property rights to the franchisee. 

In return, the franchisee pays a fee to the franchisor. Franchising rights can be granted to one or many individuals or firms. If one individual or firm gets these rights, then he or she is said to be the exclusive seller of the franchisor’s products or services or intellectual property rights.

Grow Business
Grow Business

Franchising is a way to expand the business without incurring additional costs, as all expenses of selling are borne by the franchisee. This also helps build a brand name, increase goodwill, and reach more customers. The basic disadvantages of it include that it does not give direct control. Moreover, a royalty amount has to be paid to the franchisor on a routine basis.

8. Adaptability to Grow Business

This strategy is a soft skill that is very crucial for business growth. It simply means to adapt according to the market environment changes. Adaptability opens up your mind to new ideas, makes you question the status quo, and gives you the willingness to go against convention. It prepares you for the dynamic market environment changes from time to time, to avoid lacking behind in the competition and to stay afloat in the current marketplace. Businesses that don’t keep up will eventually fall behind.

In Conclusion

Expanding your business requires a mix of strategic planning, in-depth knowledge, and continuous learning. Hence, by leveraging the resources provided in the blogs linked above, you can gain valuable insights and practical advice to guide your business growth journey. Stay informed and adaptable to navigate the complexities of today’s dynamic business environment.

Furthermore, to keep up with more insights and updates on growing your business, subscribe to our newsletter. You’ll receive regular updates, tips, and resources directly in your inbox, helping you stay ahead in your entrepreneurial journey. Subscribe now and take your business to the next level!

FAQs:-

Market research is the process of collecting information about your target customers, potential new customers, and competitors. It helps you understand what people want, market trends, and what your competitors are doing.

This information allows you to make better decisions about your products, pricing, and marketing. Good market research can help your business find new opportunities for growth and ensure that your products or services meet customer needs.

Why is customer retention important for business growth?

Customer retention is important because it’s cheaper to keep existing customers than to attract new ones. Loyal customers are more likely to buy from you again, spread positive reviews, and provide steady income. By offering great customer service, loyalty programs, and staying connected with your customers, you can keep them coming back, which is essential for long-term business success.

What is a merger, and how does it benefit a business?

A merger is when two companies join together to become one. Mergers can help businesses by expanding their reach, increasing their brand recognition, gaining new customers, and becoming more competitive. Partnering with another company through a merger can also save money and improve how the business operates.

What is an acquisition, and why do companies pursue it?

An acquisition happens when one company buys more than half of another company’s shares to take control. Companies do this to expand their products or services, get more customers, reduce costs, and grow bigger. Acquisitions can also help a company remove competition or enter new markets.

How does diversification contribute to business growth?

Diversification means offering new products or services in different markets. This strategy can attract new customers, reduce risks by spreading business efforts across different areas, and bring in more money. However, it’s important to do thorough market research to make sure that these new products or services fit what customers want and what your business can deliver.

What are the eight lessons to grow a business?

Here are the 8 lessons:

Use Market Research: Understand your target market, potential customers, and competitors to make informed business decisions.
Focus on Customer Retention: Retaining existing customers is cheaper and more profitable than acquiring new ones.
Consider Mergers: Joining forces with another company can help expand your reach and increase competitiveness.
Explore Acquisitions: Buying another company can help you grow by gaining more resources, customers, and market share.
Diversify Your Offerings: Expand into new products or services to attract more customers and reduce business risks.
Leverage Networking: Build relationships with others to increase your brand visibility and find growth opportunities.
Consider Franchising: Grow your business by allowing others to operate under your brand, increasing your market presence.
Be Adaptable: Stay flexible and open to change to keep up with the market and remain competitive.

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