Small businesses play a vital role in the healthy functioning of any economy in the world. In the United States, small businesses account for over 99 percent of all companies and employ over half of the nation’s workforce. The growth of small businesses is due to the rise of digital technology that has enabled smaller companies with tighter budgets to reach a mass audience through social media. Expensive advertising costs are no longer the dominant barrier to entry preventing small businesses from capturing a part of the market.
Hence, it is the perfect time for budding entrepreneurs and new company owners to work towards expanding the reach of their products and the scale of their businesses. These five tips will assist them in achieving steady and sustainable growth, which will allow for the long-term expansion of the organization.
Focus On Employee Development
Employees are the backbone of any small business. Unlike large corporations, small businesses cannot rely on the departmentalization of the workspace and instead often have small teams working on multiple projects and assignments. Small businesses must retain this core of hard-working employees who have a nuanced understanding of the business and its needs if they are to achieve long-term growth.
This task of retaining employees is made difficult by the allure of larger businesses, which often have a higher salary budget, better network connections, and more non-financial benefits. For small businesses to retain employees, they must offer strong leadership and employee growth and development opportunities.
Company owners can learn these strong leadership skills while still being able to attend to their business responsibilities by enrolling in an online MBA management program. This course helps familiarize its students with various leadership styles and their effectiveness in different workplace contexts. Research has shown that small businesses that prioritize employee development and retention have a 24% higher profit margin than those that don’t. Small businesses that want to achieve growth must keep their core employees happy.
Identifying Your Target Audience
One of the major impediments to the growth of small businesses is their desire to be universally appealing. It results in products, marketing, and brand visions that come across as generic and aren’t compelling to any specific group. Instead of cultivating universal appeal, businesses should focus on understanding and identifying their niche and target audience. It involves understanding who your most common customers are, their needs, and how much money they are willing to spend on these needs. Research shows that companies that target their marketing to specific buyer personas are more likely to see an increase in revenue.
The role of technology in the growth of small businesses can’t be overemphasized. It can help organizations streamline their operations, reach a new audience of potential customers, and improve their bottom line.
Technology can help businesses increase efficiency by automating and streamlining processes that reduce manual labor and allow employees to focus on creative tasks. It also increases productivity, with work like accounting and information gathering, which would previously take days and multiple employees to finish. Furthermore, technology allows companies to offer better customer experiences, expand their reach into the digital market, and access data analytics, which is critical to understanding customers.
Focus On Developing Customer Loyalty
Businesses are always looking to expand into new markets and have access to a broader range of potential customers. They often end up undermining the importance of customer quality in a desire to increase the quantity. Research shows that an increase in customer retention rates by just 5 percent can increase a business’s profits by as much as 95 percent. And while only 15 percent of customers, on average, stay loyal to a brand, they represent 75 percent of that business’s profits. Focusing on fostering loyalty among their existing customers is an essential and overlooked tool for small businesses looking to grow. It is much cheaper to appeal to your existing customer base than to attract new ones, and having loyal customers is a form of advertising itself. These customers are likely to promote your business amongst their friends and families and can help your business reach new faces.
One of the strategies for attracting loyal customers is incorporating loyalty cards into your business. These cards act as a source of motivation towards making repeat purchases to attain a reward and also make the customer feel valued. Other steps include providing excellent customer service, engaging with customers on social media, and asking for feedback.
Create Strategic Partnerships
Strategic partnerships refer to collaborative relationships between two or more businesses working towards a common goal that will give them mutual benefit. Relying on strategic relationships with other companies in your market is an excellent way for businesses to achieve significant growth despite their limited means. Creating this culture of collaboration can give businesses access to new markets that were previously difficult to penetrate. They can leverage each other’s customer base, distribution channels, and brand recognition to expand into new markets and attract new customers. It can provide the business with increased access to resources, such as financial expertise, capital, and technology. Finally, where the strategic partnership is with an established business within the industry, it can give the smaller business increased credibility in the market and amongst customers who are likelier to see it as a legitimate business with good prospects for growth.
There are two clear benefits to starting a small business today versus one in the past. The first is the rise of social media which allows entrepreneurs of modest means to reach a market of over a billion people thanks to digital advertising. The second is the growth of the digital marketplace, where small businesses can advertise and sell their product catalog. Businesses no longer have to reach expensive agreements with large retail corporations to stock their products, with customers being able to buy them on E-commerce websites. It is easier today than ever to market and sell your products. Given this context, new small businesses are entering the market at an unprecedented rate. You can stay competitive in this saturated space by following the five tips outlined in the article.