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8 ways to grow your small business
Compare tips to expand — learn how to tell when it's the right time.
8 strategies to grow a business
You might want to consider some or all of these strategies when you’re ready to take your business to the next level.
1. Research new niches in your market
Even if you’ve already done market research, take another approach to refresh the angle you’re taking. Market research can help you find gaps that your competitors aren’t filling. This can give you an idea of how to better serve your current customers, who might buy more of your products or services in return.
2. Find new uses for your product
If you have a product that can be used more than one way, make sure customers know about it. You might want to conduct a focus group or survey to find out if customers are already using what you sell for something else if it’s not obvious. Then invest in a marketing campaign highlighting this new use to expand your customer base.
3. Open a new location
Expanding to a new location can allow you to up production and serve new customers. This plan can come with some major costs, like hiring new staff, buying or renting real estate, purchasing equipment and more. Run some financial projections first before you make such a large investment. In some cases, it’ll more than pay for itself.
4. Invest in customer service
Another way to keep customers coming back is to build your reputation for customer service. Invest in a dedicated team, consider setting up more channels to get in touch — like adding live chat to your website — and respond to complaints on sites like Trustpilot and the Better Business Bureau. Also consider investing in trainings for any employees who deal with Providing a good experience can build a loyal customer base.
5. Harness the power of social media
If you haven’t already, consider developing a social media strategy to reach more customers and promote your content. You might want to explore paid and non-paid content, working with influencers and what types of content you’d use to promote. Also consider which platforms are best for reaching your customer base. If you’re selling something visually appealing, for example, instagram or Pinterest might be the way to go.
6. Collaborate with other businesses
Businesses that innovate through collaboration are more likely to report increases in productivity, as well as, develop solutions that are new to the world. Four necessary factors for successful collaboration within and between businesses are:
- The ability to recognize and apply external knowledge
- Having a shared purpose people believe in
- Mutual trust
- Strong leadership
If you can identify an opportunity, such as efficiency benefits from combining supply chains and can engage another business with similar needs in line with the four factors above, then you might have an opportunity for collaborative business growth. You can also collaborate internally. The more your team members work cross-departmentally, the more opportunities there’ll be for new ideas to come to light.
7. Wait for the right time
At the end of the day, the problem might be boiled down to your business not maximizing its profit potential and expansion may be a solution. An increase in profitability is a type of growth, too. In all cases, it’s important to know when it’s time to expand your business.
If there are no specific problems which can be solved by growth it might be better to hold off. Make sure your business can afford the costs or is set up to pay it off on time if you have to get financing.
8. Don’t be afraid to finance
Expanding your business often takes an upfront investment. If you don’t have the cash on hand, you might want to take out a loan. In fact, growth is one of the top reasons businesses borrow. View the table below to compare online business lenders have to offer.
These aren’t your only options. If your business has a promising financial history, there are many financing options for small- and medium-sized businesses.
Factor in the costs before expanding
No one can ignore the factor of cost. It’s sensible to expect considerable costs and reduced profits while your business adjusts. Consider costs like:
- Additional training, hiring expenses and other human resource costs
- Extra maintenance costs
- Increased overhead and logistics costs
- The potential loss of customers
- Loss of revenue as you transition
- Increased marketing expenses
- Financing charges like interest and fees
Subtract these expenses from the projected profits to get your return on investment
Should I expand?
Examine your business’s cash flow carefully and be ready for potential problems. Your expansion plan should include a clear timeframe and a budget forecast in line with predicted industry movements over the next few years. Here are five questions to ask yourself to prepare:
- Will growth improve my quality? If you suddenly have more customers than you can handle, hiring a larger team can improve quality. But if you scale production without hiring staff, it could suffer.
- Could growth increase my presence in the market? If your products are highly regarded and well received, that may indicate that you’re able to increase your market presence.
- How will growing impact my efficiency? Sometimes investing in new equipment or training could make your company it more efficient. But adding more steps to the process could slow you down.
- Is my industry changing? If your competitors are expanding in a way that threatens your current operations expansion might be a means of survival. It can also help you get a leg up on a new market.
- Have I reached capacity? Businesses that are struggling to keep up with demand might need to expand in order to stay afloat. It also can help you secure larger, more profitable contracts.
Business expansion should ideally provide a solution to a problem that your company faces. When the problem is that you’re running out of office space and your staff is running on empty, an expansion might be the solution. Low profits can also be a problem, business growth is one way of fixing it.
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