Creating a business is one of the most difficult tasks to handle. There are a lot of uncertainties involved, and if you’re not thorough in formulating your plan, it can fail. This is why many people choose to work for someone else rather than build their enterprise.
Fortunately, there are several market strategies you can employ to increase the chance of success for your business. In this article, we will discuss several business growth strategies that will reduce the risks surrounding entrepreneurship.
Table of Contents
Why are More People Starting Their Own Businesses?
1. Decision Making
One of the main advantages of having your own business is that you get to make decisions by yourself. Your ideas can come first when it comes to things that affect your business. For example, if you decide to go with a specific business growth strategy over the others, your decision is final.
Another benefit that goes along with this decision-making is independence. When you can decide what direction your business should go in, you have a certain level of autonomy that enables you to stand by your words and actions.
Having independence and an ability to make situations (both tough and easy situations) are other benefits to having your own business, and it builds confidence.
2. Flexibility
Another benefit of running your own business is flexibility. Business owners are not tied down by the 9-5 work hours. Flexibility creates versatility as it gives you time to focus on other areas of your life.
For example, women business owners have enough flexibility to focus on other areas of their lives, like family. Running your own business allows you to grow in other areas of your life without compromising your source of livelihood.
Many people go into entrepreneurship to reap the benefit of having a flexible business that wouldn’t hold them down in a particular spot. At the same time, some retirees venture into their companies to keep themselves busy in a way that is not as demanding as a regular job.
3. Financial Benefits
One of the most important advantages of having your own business is that you reap all the financial rewards. It is an important benefit because the sole purpose of having your business is often to make money. So when your business begins to be profitable, you get to enjoy all of it.
Many people steer clear of running their own business because of the financial risks that come with it, but when you employ the best business growth strategies, it’s possible to turn those risks into rewards. When you follow the right methods to get financial rewards from your business, it can be long-lasting.
4. Creation of Employment
Creating employment is another benefit of having your business. Although your business might be a small one of 10-20 employees or less at first, you will help tackle unemployment in a small-scale area. For example, if you employ ten people from your community, you’ve helped to reduce the unemployment rate.
5. Creative Outlet
Running your own business creates a creative outlet where you can think outside the box and make decisions concerning your company. This creative freedom allows you to tackle problems as you see fit. Also, it can improve your learning experience.
One unavoidable factor in running a business is making mistakes. So as you make mistakes, you solve them creatively and learn from them. Doing things your way gives you a certain level of satisfaction and confidence to run your business.
What are the Risks of Having Your Own Business?
Certain disadvantages come with running a business, and they include:
1. Financial Risk
Creating a business venture requires initial capital and the amount of money you will need depends on the type of business you want to have. Most people invest huge capital in their business in the hopes that, in the long run, they’ll regain it and more as profit.
This is an incredible financial risk because there is no certainty that the business will be profitable to repay your initial investment and more.
Financial risk is a downside of owning a business because every business owner has to keep in mind that their business might not be profitable, especially in the beginning, to yield profit.
2. Commitment
Business owners must be committed to their business and their role as heads of the company. In a regular job, you have one function to perform, and you’re not responsible for the part of others and how they play out. As a business owner, you need to be committed to every area of your venture.
This huge responsibility can take a toll on you. Also, you cannot shy away from your responsibility, so you must take up the ones you dislike. Running a business requires a time commitment, and it can become stressful.
3. Risk Bearer
It’s not just the financial risk you have to bear as a business owner. Anything that goes wrong with the business is a burden for you. In a regular job, you’re only responsible for your role, and if you underperform, you can be relieved of your position, and someone else will fix your mess.
As a business owner, you cannot escape any problem whether it was your doing or not.
4. Lack of Experience
Most people lack the knowledge of having a business before they get into it, which causes them to make certain mistakes along the way. Even if you have an idea of how to run your business, there are certain areas where you’ll lack experience.
People learn from their experiences and mistakes in business. This can be a disadvantage because building experience comes with a price, and these mistakes can be costly.
5. Uncertainty
Another downside of owning a business is the uncertainty that comes with it. Usually, a company is built with the hopes of becoming profitable in the long run. There’s uncertainty in the risk it will bring, profit, longevity, etc. All these uncertainties make it difficult to predict if the venture is going to be worth it or not.
6. Fluctuation in Profit
There’s no set profit when running a business. You can have good days and bad ones. There’d be a period of impressive cash flow, and there would also be a drought period.
The shift in profit usually happens suddenly, and if you don’t have plans for rainy days, it can be detrimental to your business.
Most of these risks are avoidable when you have good business growth strategies.
What are Business Growth Strategies?
Business growth strategies are a company’s basic plans to overcome weaknesses and build strength. These strategies are methods that a business employs to launch itself in the market and create a stable environment.
Business growth strategies serve as a map that will take the organization to its destination. Every business has goals, and for them to be achieved, one or more strategies must be implemented.
Examples of Business Growth Strategies
1. Diversifying
The diversification strategy is one of the business growth strategies you can employ to boost your venture to the top. However, it involves certain risks. When you diversify your business, you venture into other services, so your business doesn’t focus solely on one area.
It could be bringing new products, exploring other markets, or targeting potential customers. This strategy is great for growing your business because it yields more profit and introduces your organization to other customers.
One of the major risks involved in diversifying your business is that you may make the wrong choice.
For example, your new product might not suit your existing customers. Also, the time and method of diversification might be off, which will cause more problems for your business. For diversification, you need to analyze and strategize for effective implementation.
2. Partnership
One of the ways struggling businesses boost their growth is by using the partnership strategy. This strategy involves linking up with a more successful business to put out a product or service. It helps the struggling company with exposure to other audiences outside existing customers.
The partnership doesn’t have to be between businesses with the same area of focus – as long as the products/service complement each other, a partnership can be one of the best business growth strategies.
It’s not just struggling businesses that benefit from partnerships. Big companies do it to bring their venture to other consumers in a less risky way.
The advantages of using the partnership strategy include business growth, new consumers, and an increase in profit. Understanding what consumers want plays an important role in this business growth strategy.
3. Business Acquisition
Acquiring other businesses is another great business growth strategy. This strategy involves acquiring a business with a similar area of focus to complement the existing business.
This method is used mostly by small businesses to boost the growth of their venture tremendously. Big organizations also use the technique to enter a new market and target new audiences.
Business acquisition is an investment because it involves buying another company to grow your existing one. Therefore, it needs thorough analysis before actions can be made. It involves certain risks, and it’s similar to the diversifying strategy, but it’s safer.
The advantages of using this method include squashing competition, acquiring new products and services, and taking your business to new customers.
4. Expansion of Products
It is also called the product development strategy. Companies need to constantly expand their products and services to meet the demands of the market.
You might notice your business is delivering products that are becoming outdated, and that’s when you decide to expand your products while maintaining the old ones until the demand for them drops.
This phenomenon is common in the tech business. Technology changes often, so it’s necessary to expand your product to meet the changing market.
Also, businesses might decide to try out a new location, especially in areas where those services are high in demand, but there’s little business to satisfy those wants.
It’s very hard for this strategy to go wrong, which is why it makes the list in this article. You need to study the market and the consumers, so you don’t put out a product that does little to boost the growth of your business. If you cover all the angles thoroughly, this strategy has little to no risk.
The biggest names in entrepreneurship use this strategy all the time. For example, a food chain company might add a menu corresponding to a festival during the week. Although it’s for a short while, the innovative products will bring new customers and boost their growth.
5. Market Penetration
The market penetration strategy can work as a replacement for the expansion of the product strategy. In some situations, expanding your products and services might not be ideal or possible, so as a backup, you can penetrate the current market using your current product.
This strategy aims to use your current product to maintain old customers, win new ones, and eliminate the competition.
This technique involves market development, and there are several ways you can do this, including brand promotion. If you can get your business across to the majority, you’ve already increased your chances of getting new customers, leading to business growth.
Another method that works is reducing the price of a product so consumers can leave your competition and come to you. Market penetration requires effort, but in the long run, it causes rapid growth.
6. Customer Care
Customer care is perhaps the simplest strategy to grow your business, yet it is often the most overlooked. People love to feel appreciated, and when they speak, they want to be listened to.
Using your people skills can be an advantage in growing your business. Creating an environment where your current customers can feel good is enough to boost you to the top.
People will talk about the coffee shop that gave them a “thank you” package at the end of the week or the tech store that fixed their problem in less than 15 minutes. This strategy entails ensuring every interaction an individual makes with your business ends on a positive note.
7. Market Disruption
Market disruption is another great strategy you can use to grow your business. You disrupt the market by finding a consumer-needs hole and filling it. The method involves entering an already-dominated market and finding ways to make your product stand out from the rest.
You can disrupt the market by reducing the price of your product, making your services easier to reach, or giving your customers more say.
Skills That Make Business Growth Strategies Work
Business growth strategies are effective in taking your venture to a higher level. However, if you do not possess most of these skills, it won’t be easy to implement them efficiently. They include:
1. Ability to Analyze
As a business owner, one of the important skills you should have is the ability to analyze. You need to study the market, your customers, your products, and your competition. Researching and understanding a situation allows you to know what actions to use and when to use them. This skill is essential for business growth strategies to work.
Some strategies work for certain kinds of businesses while others do not. When you analyze, you reduce the risks of using these methods, and you grow your business.
2. Ability to Make Decisions
As a business owner, it’s up to you to make decisions concerning the direction you want your company to go. Decision-making is an important skill in entrepreneurship because not everybody can take action under pressure or in tough situations without knowing if it’s going to work in their favor.
Decision-making is not as easy as it seems because, as an entrepreneur, you bear the consequences of any action you take. Deciding which of the business growth strategies will work best for your company is your responsibility, and when it doesn’t go the way you want, you have to fix it.
However, every entrepreneur should be able to make decisions and stand by them.
3. Commitment
Another skill that makes business growth strategies work is commitment. Many people have described building a business as watching a baby grow because it takes time, investment, and commitment.
A skill that also goes in hand with this is desire. You have to want to see your business grow to the top. These qualities will motivate you and allow you to choose a strategy with a clear head.
4. Vision
Another important factor in determining if the business growth strategy will work is your vision for your company. It is a very crucial skill that will help you in choosing what’s best for your business. Every entrepreneur should have a vision, business goals, and growth objectives for the next five years.
If you do not know what level you want to see your business in a year, how will you know which business growth strategy will be good? A business owner with a long-term goal can think ahead, strategize, and create a map of action to tackle obstacles that come their way.
5. Perseverance
As we’ve said before, building a business takes time. Most of the top entrepreneurs today failed before getting to where they are.
If you cannot persevere, there’s little chance your business will succeed. As a business owner, you cannot run away or give up on your cause. This skill is what separates an entrepreneur from a 9-5 worker.
You must not give in to pressure. There’s a chance that the business growth strategies might not work for you, and that is where your skill of standing firm during tough times comes into action.
6. Interest
One of the aims of owning a business is to make a profit. If that is your only drive, it will be difficult for your business to grow, irrespective of how much strategy you use. Entrepreneurs are passionate about what they do, and they turn passion into drive.
It would be best if you had a full interest in what you do, and as the years go by, it should grow even more. Building a business in the hopes of making money is a rookie mistake. If you do not love what you do, it will be hard for other vital skills to come in, like commitment and perseverance.
7. Critical Thinking
A business owner should be able to think critically because that is what strategizing entails. The ability to think outside the box, be creative, and be rational is essential for any organization to grow.
The skill to think outside the box and find opportunities where others see a dead end is critical for business growth strategies to be successful.
Reasons Why Business Growth Strategies are Important
1. Create Awareness
For your business to grow, consumers need to know what products and services you offer. It is the function that business growth strategies provide.
Through online advertising and billboards, you make people more aware of your business which brings them to you, then grow your business and create profit.
2. Build Business
The purpose of these strategies is to grow your business, and it does that. The process growth strategies work by gradually taking your company to a level that lasts for years. The best thing about these strategies is that you can use more than one at the same time or set aside a method for backup in case one fails.
You can say that they are the nourishment your business needs to grow. It doesn’t matter how big your business grows; you’ll still need these strategies to maintain its position.
3. Longevity
Every business owner’s dream is to have an enterprise that will last for generations, and business growth strategies ensure that they only grow higher and higher. It is the reason why top companies still look for ways they can make their products stand out even more.
Using business growth strategies ensures your enterprise lasts long and becomes a favorite among the population.
4. Reduce Risk
It’s impossible to avoid risk (both internal and external) altogether as a business owner, but when you use these business growth strategies, you can reduce them significantly.
For example, using the business acquisition strategy, you can eliminate competition in the market and mitigate external risks.
5. Encourage Analysation
The ability to analyze is important in making business growth strategies work. When a business owner does this, he looks deep into his enterprise to determine his strengths and weaknesses. This analysis shows which approach to use to overcome disadvantages and improve stability.
6. Yield Profit
Business growth strategies yield more profit because your enterprise grows, and so do your customers, investors, and partners. The gain of a business is unpredictable, but when you use these strategies, it’s guaranteed that you will boost your income level in the long term.
7. Expansion
As your business grows via these strategies, you will expand to other areas. The reason why small businesses choose to stay in one place is that they do not have enough exposure, resources, or customers to create additional branches.
But when the strategy you select begins to work, everything you need to expand your business will fall into place.
8. Creation of Employment
As your organization gets bigger and expands, you will employ more people and reduce the rate of unemployment. It is another reason why business growth strategies are important – it allows you to contribute positively to the economy of your area.
Frequently Asked Questions
Do business growth strategies work?
Yes, business growth strategies work. Many firms use these methods to bring their business to more people. You might notice more billboards of a company in a particular area or rebranding a specific product.
Some businesses might introduce a generous offer for a while. All these are strategies that help the business grow by creating exposure to the population.
What’s the most important business growth strategy?
Each strategy is important depending on the business. No method ranks above the other. The system a small business employs may differ from the ones big businesses use.
For example, it will be difficult for a startup tech company to acquire a business, but big tech companies often buy out other companies to reduce competition.
What works for company A might not work for company B. So rather than focusing on which strategy is more important, focus on which one is going to work best for your business.
Does every business use strategies?
Yes, every business uses some strategy or the other. For example, on billboards, you see advertisements, rebranding, the introduction of new products, and collaboration. These are all strategies to improve growth and create products.
Strategizing is an important skill for an entrepreneur. It allows you to determine how to get the market to work in your favor. It is important because, without a strategy, entrepreneurship is empty.
Do business growth strategies yield results immediately?
Whether business growth strategies yield results immediately depends on the method you use. Acquiring another company is not as easy as it seems and can take time. Also, developing a new product will take planning and strategizing, analyzing.
Creating ads, on the other hand, requires less effort. Just because the results of using business growth strategies are not immediate doesn’t mean they are not working.
Conclusion
Business growth strategies are important for every enterprise, but they won’t be effective without the necessary skills and mindset required of an entrepreneur. For continued growth, these strategies need to be carefully utilized.
I’m a blogger and entrepreneur. I want to help you in your journey to build your business online.
