5 Tips For Growing Your Business
Growing your business will generate the best returns on your investment in your company. Growth can come from various quarters – expanding your portfolio, expanding your customer base, and leveraging new sales and distribution channels.
Growing your business as a return on sweat equity
- Hours of painstaking research.
- Legwork and labour that never seemed to end.
- Endless negotiations over supply and service contracts.
If you founded your business, you know what I’m talking about. Those are the efforts that go into the establishment of a business; any business.
That’s why they call it ‘sweat equity’ – the ownership you hold in the business through your contribution of sweat and tears.
The best return on sweat equity
With your business firmly established, and having gained some momentum, what’s the best way to target a juicy return on that sweat equity?
You could, of course, just keep doing what you’re doing, following the model that’s worked well for you so far.
But, I’d say you’d get a far greater return by growing your business.
It’s only when you reach out for new frontiers that you power up new growth engines that will get you that extra return on your sweat equity that you’re looking for.
Growing your business – the checklist
So, what’s on the checklist of growing your business to a new, sustainable level?
Diversify your product mix
You can diversify via
- Offering products or services that are new, but related with your existing portfolio.
- Starting a new service or subsidiary in an allied field.
- Offering tutorial classes or educational material based on your own credibility in your field.
Before deciding on a diversification plan, you should
- Take a look at your bottom line and decide whether your finances will support diversification.
- Ask your current client base whether they would like to receive the new products or services you’re going to offer.
- Conduct broader market research to see how much demand there is for your proposed offerings in the broader market.
- Check your supply logistics to ensure that it will be able to handle your expansion.
Enter a new geography
You retain your existing portfolio of offerings, but try to capture market share in a new geography.
This can prove a real shot in the arm for business with non-digital offerings since if you’re an online business, geography won’t be much of an issue in the first place.
Say you’re an interior design firm based in Dhaka, the capital city of Bangladesh.
Once you’ve established yourself as the top interior design firm in Dhaka, you can leverage that brand credibility to expand to other Bangladeshi cities like Chittagong, Narayanganj and Gazipur.
Understanding the local market is absolutely critical to making a success of expanding into new geographies.
For example, the once-global fashion retail chain Forever 21 moved into Germany without even knowing that stores in the country typically closed on Sundays. Such slipshod research into local markets and failure to ensure supply logistics were big factors in the collapse of Forever 21.
Bid for public contracts
Public contracts are
Now, what do I mean when I say public contracts are ‘character testing’?
When you bid for a public contract, your firm will be closely scrutinized.
Things like your brand image, your finances, and your track record all play a factor in determining whether you get the contract or not.
When you do qualify for a public contract, it’s a sign of professional success for your firm.
Typically, governments have a department dedicated to small businesses within its jurisdiction. These departments can help you prepare the groundwork for a successful bid.
Leverage the power of the internet
Whether it’s creating new sales channels, or it’s expanding your services, the internet can be a very useful enabler.
So, utilize it to its fullest extent.
For example, an interior design firm in Bangladesh could offer interior design consulting online to clients in Boston or in Botswana.
This is a huge opportunity waiting to be tapped…and one that doesn’t need the extensive financial investments that physically expanding to new geographies does.
Acquisition of other companies
When you acquire another company, you gain a new portfolio, a new talent pool (the employees of the company you acquired), and a new customer base.
You should carefully study the potential synergy from the acquisition before going ahead.
- Can you ensure customer loyalty of the company you’re acquiring?
- Can you successfully handle workforce integration?
- Is the portfolio of the company being acquired a real value addition to your own?
Finally, check the financials and any liabilities of the company and make sure you can handle them.
Finally, when should you pursue your growth plans?
First of all, you should pursue growth plans when you are ready to pursue them.
That being said, if you had a choice, what should you do?
Warren Buffett said ‘Be greedy when others are fearful and be fearful when others are greedy’.
While he said that in the context of investing in the stock market, you can apply his wisdom to growing your company as well.
All economies go through peaks and troughs.
The time to execute your growth plans is when the economy is not doing so good.
It’s when the economy is not doing well that the weakness and problems you may have to face are clear, enabling you to plan for them.
Plus, it gives you a chance to get your growth plan done by the next economic peak so you can reap the full benefits of the generally strong economic conditions.