If you’re a business owner, chances are you’ve heard of the four key growth strategies. These are important because if you aren’t following best practices that can help your business grow, your small business will always be that: a small business. Small business owners should take these principles to heart in order to keep the good news coming in, though there’s a tip for all the entrepreneurs out there.
Market penetration
Compared to other forms of growth, this doesn’t involve you tying your financial statements and bookkeeping to new markets. Instead, it focuses on increasing market share using current products and services. Often this is done through an increase in your marketing efforts, be that through social media, web design, or general digital marketing efforts. One of the business decisions you need to consider to draw in potential customers and amp up your marketing strategy is whether or not to bring on a digital marketing agency. They can boost your online presence, improve your web design and SEO, and amp up your social networks and content marketing. A full-service digital marketing agency can take a lot of the heavy lifting off of your plate. Often, the expense to your credit card or bank account pays itself off in the returns that digital marketing can provide.
Product development
Whether your own business is producing office supplies or offering website design, it’s important to continually see what draws customers to your products. Often, you can review a balance sheet or financial reports to see what it is about your products and current assets that resonate with your consumers. From here, you can find areas of opportunity and devote some of your finances to product development. Through this method, you can improve your client relationships and attract new customers without necessarily branching into new markets. It helps keep your cash flow positive without overhauling your operations.
Market development
This is somewhat of an extension of product development and is a bigger risk for a business owner. You end up taking an existing product and working to develop a new market for it, allocating finances where necessary. You may need team members familiar with online business and accounting software at this stage. Accounting software includes the need for a chart of accounts for ecommerce company operations and bookkeeping. The chart of accounts will keep listings for the names of all the accounts your own business has made visible in your general ledger. This can include an income statement, financial reports, and payroll information. You may need team members to work full-time on a project like this so they’re able to answer whether you ever have an inquiry about something like sales tax in a different market.
Diversification
Diversification is often considered the riskiest growth strategy because it can impact your financial reports in ways you may not have anticipated. Your financial reports could blossom or suffer strictly because of how uncertain diversification can be. It requires you to learn about a new market and also develop a new product for that market. If you sell office supplies, for instance, and decide to branch out into digital media or mobile phones, you’re going to have a hard time establishing yourself and recouping the costs on your financial statements. A digital marketing agency can help here, but it’s still a fairly risky endeavor. If you choose this route, leverage digital marketing and have robust social networks because it can mean the difference between success and failure.
With the number of growth strategies there are to pursue, you need to consider which ones make the most sense for your financial statements. Do you pursue something that requires a full-time commitment, or choose a safer option that may provide smaller returns? The choice is ultimately yours to make, as long as you’re doing it for the health of your business.
