Growing a small business in a sustainable and scalable way is far from a simple thing. On the one hand, growth indicates that things are heading in the right direction, but without being able to manage this growth, the company might be heading towards an uncertain future.
For instance, encountering a workload that you can’t currently handle could put you in an awkward position. Do you reject and lose potential clients or accept and risk breaking a promise/commitment? What about your relationship with your customers – who has the priority, return customers, or potential new customers? Lastly, how do you grow your staff in the way that generates the most value in the long run?
Let’s try to answer some of these questions!
1. Focus on Customer Retention
Retaining your customer base is the most profitable course of action for a small business for several reasons. First of all, it’s the most cost-effective. You see, it takes five times less to persuade someone who already did business with you to return for one more purchase than it is to convince someone to buy from you for the first time.
Second, you need the most impactful strategy right away, something that will give the greatest immediate impact. Well, it’s known that over their customer lifecycle, just 8% of your return customers generate about 40% of your entire profit. This means creating a strategy where you put the most focus on those who generate the most profit. It’s that simple.
Then, there’s the matter of creating momentum. After a single purchase, the likelihood of a second purchase is 27%. If someone buys from your brand two times, there’s a 45% chance that they’ll return for the third time. If they buy from you three times, the chance of them returning for the fourth time is 54%. In other words, once you complete those two purchases, your profits might just start snowballing.
Lastly, you don’t have to focus on the best-spending customers. Sure, your 1% of best customers spends five times more than your 99%, but the fact remains that your average-spending customers are quite profitable on their own. The thing is that the more times one returns, the more likely they are to increase their average spending with your business. This means that all you have to do is keep them returning for more.
2. Base Your Infrastructure on Outsourcing
Delegation of tasks is the best alternative to micromanaging everything and generally the right way to go. You don’t have to delegate to people within your organization when you have the option of basing your infrastructure on outsourcing instead. This way, you’re keeping your internal organization simple, boosting your overall capabilities, and allowing your team to focus on the core tasks.
So, what should you outsource? Well, one of the first things you want to outsource is specialized tasks like your accounting services. This lowers the time and cost of the hiring process, which can be quite demanding, seeing as how this is the field in which you have to hire specialists. The same goes for any other highly specialized department like IT, HR, etc.
Scalability is another major reason for outsourcing. After all, we’re discussing the concept of business growth, and once it happens (once your workload increases), you’ll find yourself in a position where you need to introduce some changes. With scalable solutions (like outsourcing), you’ll have access to the flexibility that can help resolve this issue quite efficiently.
Also, keep in mind that if you’re a first-time business owner, you’ll need all the counsel you can possibly get. In this instance, one shouldn’t disregard the fact that your accountant is also your advisor. The same goes with other types of experts that you decide to do business with. Hearing them out when it comes to some of the bigger business decisions could potentially save your business.
3. Create a Great USP
The main reason people will choose to do business with you and keep returning is your unique selling proposition (USP). Creating one is not an easy task, and there are a couple of things you need to do first.
First, you need to make a persona of your potential customer. Then, you need to imagine a scenario in which they decide not to do business with you after all (an average example of shopping cart abandonment). Next, you should ask what made them decide this way. There are a couple of possible culprits:
- The cost (the fact that someone else offers a better price)
- The belief that they don’t need your product/service
- Inadequate payment options
- Issues regarding delivery (distance, waiting time, etc.)
Once you know the problem, you have something to base your USP on. Remember, all of your competitors are in a similar predicament. This means that resolving this issue means that you’re simultaneously becoming more appealing and more innovative.
In most cases, what people focus on is convenience. Your site needs to save time. The product needs to be simple, easy to use, and easy to get access to. Paying for your product should take as few steps as possible, and your customer service needs to be out there 24/7. Once you address all of these bases, it will be a lot easier to start making some connections.
Also, never lose from sight the fact that a unique selling point is exactly what it sounds like – a point. Don’t make promises that you can’t keep. Your product doesn’t have to be superior in every way conceivable. It needs to do one thing better than others, and this is the card that you’ll play on.
4. Leverage Online Influence
There are a couple of things you can do in order to get the most out of your online presence. First, you need to start with a great site. Regardless of what kind of digital marketing you decide to go for, later on, this will definitely be your starting point. Every link, every potential customer, virtually any connection in the digital world eventually ends up on your site.
Second, you want to think about boosting your online visibility through SEO. You want people to find you effortlessly, even when they’re not looking for you directly. This form of connection is described as organic, seeing as how from the perspective of your audience, they were just looking for someone to help them with their X need, and the search engine presented them with you.
You also want to put more emphasis on your social media activities. Using social media platforms to interact with your target audience is one of the ways to establish your small business as a household name. It helps boost your brand recognition and improve your brand awareness. Also, it’s important to understand that not all social media platforms are used equally by your target audience. What this means is that you need to identify the most popular platforms with your target demographic and focus your efforts there.
Lastly, you need a good blog. Your content marketing is a way to get the attention and offer something of value to your audience before actually doing business with them. Figuring out your way around this is one of the keys to your success as a small business.
5. Grow Your Team
Having the right team on your side is pivotal for the long-term success of your enterprise, but it’s not something that can be done overnight. It’s not just about hiring the most qualified people. It’s about running a cost-efficient and quick hiring process, efficiently onboarding people, and finding mechanics to retain the most promising of your new recruits.
Bear in mind that the trend of working from home gives a whole new dimension to this phenomenon.
The thing is that hiring people for the long run means looking at more than just their previous work experience and their qualifications. It also means finding people with the right personality and values that match those of your corporation. In other words, you’re not just looking for the right person for the vacant position. You’re looking for someone to fill that vacant position in your company. There’s a big difference there that you’ll have to address.
One more thing that you’ll have to do is make as accurate a job description as possible. This way, you’ll attract the right type of people and have a much more targeted hiring process. It’s also great when it comes to establishing the right relationship with your target audience. If people know exactly what their job in your company will be, they won’t be surprised or let down after they get started.
Remember that sometimes, your employees will have to “grow into” their position in your enterprise rather than start there right away. Instead of bringing managers from the outside, one of the best ways to scale your small business into a medium-sized one is by grooming employees for leadership positions. This way, you have someone who is loyal and understands the company from the inside out in the right position.
6. Diversify Your Income
Putting all your eggs in one basket was never a sound strategy. Instead, you need to diversify your income. There are a couple of things you can do to diversify your revenue. This makes you less reliant on a single source of income which, as a result, gives you more possibilities and makes it less likely that your business model will crumble under external pressure.
The first one is to take your physical sales to the digital world. It goes the other way around, as well, seeing as how the majority of people check the product online before committing to an offline purchase.
One of the best things in digital sales format is the availability of choice. You give people a chance to choose a plan that they’re going to use. You also allow them to use a subscription service or a one-time purchase. This is not just there for the sake of their own convenience; this is also a way to make yourself more financially resilient. Once the income starts coming in different forms and formats (and at a different pace), everything will add up far better.
You must always be on the lookout for new opportunities. For instance, there are a lot of “odd” client requirements that you may not be able to fulfill today but which may make a difference in the near future. Then, there are untapped resources in your industry. Some of these are untapped for a reason, while others show great potential. Overall, finding a new angle makes a world of difference.
7. Focus on the Local Market
While it is true that you never before had an opportunity to make your business an international success, as you do today, at the same time, focusing on the local market is still your first priority. Proximity is a huge factor for several reasons.
There’s the matter of convenience. Even if you do a worldwide delivery, being closer to the source means that the item will get there faster. Also, having a chance to go to the headquarters in person is always a huge plus, not to mention the fact that the proximity of the field team makes a world of difference on its own.
So, you need to put a special emphasis on your local marketing effort. Local mobile SEO is especially important, even if you are primarily an offline resale place. In fact, almost 80% of offline sales are a result of a previous local mobile search. People want to compare the cost of your inventory against your competition or just confirm your physical address.
All in all, while going overseas is a great potential venue, for the time being, local efforts must come first.
Overall, growing a business takes time, patience, and strategy. You need to foresee all the future bottlenecks and take timely action. For this, you need to be aware of the direction that your enterprise is going to take in the near future. Sure, the majority of people have a contingency plan, but you also need to make plans in the case where things go just right.