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How to Grow Your Small Business
Kody Wirth | Oct 24, 2023
Getting your business off the ground is challenging. Continuing to grow your business is just as difficult.
If your sales have recently hit a plateau, check out these proven ideas on how to grow a business.
1. Understand why you’re not growing
To determine the best way to grow your business, you need to know why performance is stagnating or falling. Here are some common reasons:
- No clear vision for growth
- Inadequate or outdated market research
- Operational inefficiencies
- Financial mismanagement
- Poor customer relationships
- Ineffective marketing
Unfortunately, issues and growth opportunities aren’t always obvious. We recommend starting with a thorough financial review to avoid wasting time and effort in your analysis.
Look at your current sales, expenses, and cash flow. Compare results to a previous time to understand how your business has changed. If you have forecasts, compare actual results to what you expected to determine where things may have gone wrong.
Maybe sales have declined, certain expenses have increased, or cash flow has been slower. Reviewing your finances should provide you with an idea of the actions you need to take.
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It may be worth reviewing these common issues if you’re struggling to understand why your business isn’t growing.
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2. Know your customers
Whether through a quarterly survey, user reviews, or direct customer service communications—you must ask for honest feedback. Take note of consistent grievances amongst your customer base and use those to launch new features, make internal adjustments, or any number of fixes.
And while direct feedback from your customer base is invaluable, you must also pay attention to the market and your competitors.
Conducting a market analysis regularly ensures that you’re aware of any competitive moves and how different economic events may affect your customers. Combined with the insightful feedback from your customers, it provides a full picture of potential avenues for growth.
8 ways to get more customers
You likely aren’t serving everyone in your target market. If acquiring new customers has become challenging, try these recommendations.
3. Focus on customer retention
Customer churn is part of doing business. That doesn’t mean you should ignore retention efforts—especially if you offer a recurring service. If too many existing customers decide to leave, it can negatively impact your bottom line and potential customers’ perception.
After all, it is far less expensive to retain a customer than to acquire a new one.
You need to leverage the information-gathering methods mentioned in the last section to reinvigorate your relationships with current customers. Understand why they are leaving, what’s missing in your product/service, and what it will take to make them stay.
Tip: Focusing on quality customer service can be a direct avenue for growth. If your current customers are treated exceptionally, they’ll be more likely to leave positive reviews, recommend you to their friends, and purchase from your business again.
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Don’t wait to retain your customers. Learn what you can do to make your new customers come back.
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One indirect way to better retain customers is by improving your internal process. The more efficient and effective you work, the more you can focus on your customers.
4. Extend value from current customers
When looking for growth opportunities, it’s common to immediately try to attract new customers. But what about your current ones? You’ve built credibility with them, meaning they’re more likely to purchase from you again or even pay more for additional services and new products.
Explore opportunities to extend the value of your customers. Add a new product line that compliments previous purchases. Test increasing service prices in exchange for additional features, hands-on direction, or other additions that your customers find valuable.
Just because you’ve possibly hit the limit of growing your established target market doesn’t mean you can’t pull more value from it. And who knows, any changes you make to increase the value for current customers may be a springboard for bringing on new ones.
5. Expand your reach
Sometimes, to grow, you need to look beyond your current scope. That may require you to explore a new:
- Customer base
- Geographic territory
- Business model
If expansion appears to be your best option, you need to treat it like starting a new business. You must research, test the idea, understand legal requirements, etc.
The point is, don’t just jump into launching a new location, targeting a different customer, or adapting your business model. Do your research, test as much as possible, and expand slowly. That way, you can avoid this perceived growth opportunity becoming an incredibly costly failure.
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It may be a good time to expand your business if you’re turning down business opportunities, surpassing your goals, and have strong cash flow and minimal risk.
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Learn how to use your previous experience and business plan to create a detailed expansion plan.
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If you’re unsure what expansion efforts make the most sense for your business—check out these tried and true tactics.
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6. Grow your team
Growing your customer base and sales typically means growing your team. And just as you need to focus on providing exceptional customer service, you need to focus on the quality of the people who join your team.
Focus on finding diverse voices that fulfill the role’s duties and provide unique perspectives that challenge your own. Having a staff full of “yes men” is harmful and can lead to poor internal culture and self-serving decisions. Having a vast range of employees who differ in experience, background, beliefs, and specialties brings new perspectives that would be nonexistent without them.
As you look to hire new employees, you’ll also want to focus on your current staff’s professional development. Show them that you value them and their contribution to your business. Give them more opportunities to lead and collaborate, involve them in the goal-setting process, and even foot the bill for them to attend seminars and trainings.
How you treat your employees will be reflected in how you treat your customers. Start by optimizing internally, and your business will grow from there.
7. Eliminate risks
Starting and running a business is inherently risky. That doesn’t mean you can’t minimize and even eliminate risks. Doing so will help you better understand your business and remove blockers to business growth.
Now, eliminating risks isn’t as simple as creating a list and checking them off. It has more to do with active management. Here are a few things you should do:
- Regularly review and update your forecasts.
- Create worst-case forecast scenarios.
- Focus on strengthening your cash flow.
- Avoid taking on unnecessary debt.
None of these actions will remove risk. They will make your business look less risky to potential investors and make you more prepared to handle a crisis. Both of which remove potential barriers to growth.
8. Showcase your expertise
You must showcase your expertise to continue building authority amongst your customers and other businesses. This means providing resources, hosting webinars, conducting research studies, and even running Q&A’s through your social channels. Find opportunities to share what you know and present it as a free opportunity to learn and grow.
Just be sure to gather contact information or provide a link to a specific promotional page when you host an event or give access to a download. You’re showcasing expertise and using it to grow an audience that will hopefully one day turn into customers. Follow up and provide valuable insight, and you can turn it into consistent growth.
9. Support your community
Giving back to your community and being socially responsible is a great way to grow your brand and showcase your business values. Sponsor or donate to nonprofits, provide free products or services for initiatives you care about, or host community events. You could even partner with businesses that have similar nonprofit interests to promote greater change.
Aside from donating and sponsoring, you can also look internally and promote socially responsible business practices. Maybe this means moving production to renewable energy, giving employees paid time to volunteer, or only purchasing supplies from local vendors. Do the right thing and grow your brand reputation around sustainability and responsibility in support of your community.
Part of growing your business is making the right partnerships and knowing your business community. Take the time to network and build relationships that can help you grow your business. It’s a great way to share industry insights, emerging trends, and best practices you wouldn’t have found otherwise.
A strong network can lead to new customers, employees, investors, and partnerships. And if you’re seeking a potential partner, you have a pre-vetted selection to reach out to. Remember, whoever you partner with should have a shared vision, complementary skill set, or some other strategic benefit you don’t currently have access to.
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Learn from real-world experts how to successfully approach and establish a partnership with other small business owners.
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11. Develop additional income streams
Developing additional income streams may be necessary if you’re struggling to grow revenue from your core business model. This could include a new product or service offering, separate pricing models for different customers or subscriptions, or even passive income from ads and sponsorships.
Treat any new income stream as an expansion of your business. You’ll likely want to develop a one-page business plan to ensure the new initiative is viable and your current business can support it. Consider startup and operational costs, your goals with the expansion, and how long it will take to break even.
Lastly, be sure that your new initiative makes sense for your business. It may start as additional income to support operations but may need to transition into a separate business.
12. Measure and iterate
However, if you try to grow your business, ensure you actively measure and track success. It can be really easy to simply make a change and let it run without any goals or key results in mind that determine success. Without them, a growth initiative can easily become a costly idea that sinks your business.
Set your organizational goals upfront, and don’t be afraid to kill or pivot projects if you’re not seeing positive results. You can always set up new iterations and run again, refining your approach to identify the most successful path to success.
And even when you have hit a home run, continue to measure and iterate. A series of webinars or new product lines may lead to growth for a time, but that could easily change if you’re not paying attention.
13. Leverage social media
Diving into social media can be daunting. But here’s the thing, you don’t have to have experience with it to leverage social platforms. It can be as simple as opening a business profile and beginning to grow a community of customers.
You don’t need to post every day or create incredible-looking images and videos but establish a consistent schedule your followers and customers can expect. From there, it’s up to you to actively engage with your followers, read comments, answer messages, and build your social brand.
Overall, it’s a great way to identify customer trends and insights. You can even use the insights you gain and try running social ads. It’s easier than you think and is an inexpensive way to test promotions, gauge the interest of a new customer base, or even run a full-fledged digital campaign.
14. Invest in yourself
Your growth as an entrepreneur directly influences your business. While running a business is often the best way to learn, that doesn’t mean you shouldn’t explore improving specific skills.
Key areas worth focusing on may include:
- Leadership and management
- Financial literacy
- Digital marketing
- Strategic thinking and planning
- Time management
Remember, as you grow, so can your business. You’ll be better equipped to run your business by continuously enhancing your skills. Your education can even impact your employees, making them more confident in your leadership and inspired to grow their own skills.
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To develop yourself professionally, focus on the following growth opportunities.
15. Consider a relaunch
A relaunch might seem drastic, but there are valid reasons to consider this route:
- Rebranding: Your current brand image or reputation may have been compromised or no longer align with your vision. In this case, a clean slate approach may help you redefine brand perception.
- Change in business model: Are you significantly altering your operations or value delivery? If so, launching a new venture rather than transforming your current business may make sense.
- Financial challenges: If your business is burdened with debt or financial obligations—closing and relaunching may provide a more feasible path to profitability.
- Market evolution: If your business no longer aligns with current market demand, a relaunch can be an opportunity to pivot and cater to the evolving needs of consumers.
Closing and relaunching is not an admission of failure. When done correctly, it’s a strategic move that helps you adapt and reposition your business for growth.
5 ways to relaunch your business
Learn what options you have to relaunch from these real-world business examples.
Continue to look for growth opportunities
Your business will consistently transition between growth and stagnation. The key is to keep searching for new growth opportunities, not be afraid to get creative, and have measurable results in mind to avoid turning potential growth into a severe misstep.
If you’re unsure whether to pursue a growth opportunity, revisit and update your business plan and forecasts. It can help you determine if your initiative is viable and that your business can manage potential costs or negative cash flow in the short term.
You can do this manually or try out a planning tool like LivePlan to make updating and tracking results accurate and easy.