Seeing a business through its start-up phase into a sustainable period of earnings and profits is a challenge. In fact, over 80% of new businesses end up failing within their first year of opening. For the lucky twenty percent that survives, only ten percent of those companies will make it through the next five years. To turn your business from a successful start-up into an established business, you need to pursue growth strategies, which increase the value and earnings potential of your firm.
Choosing the right growth strategy depends to a large extent on the type of business you run and what kind of capital and resources you have available to you that you can use to grow. Here are five examples of growth strategies that will bring you more revenue and increase your brand awareness.
#1 Create an Online Marketing Strategy
Leverage the power of the internet and your social media platforms. SEO and social media marketing can revolutionize the reach and effectiveness of your marketing campaigns.
#2 Licensing your Products for Resale
If your company offers an information product or an app technology, consider using a licensing agreement to attract new resellers of your product. Licensees will pay licensing fees and royalties to you for every sale that they make.
#3 Merge and Acquire Partners and Competitors
If your company has earned a large cash pile and you have identified industry partners and competitors, use your money to make an LBO of their businesses. Absorbing your partners and competitors allows you to take the best parts of their business and incorporate them into your business to strengthen your weaknesses.
#4 Opening a Second Retail Location
If you have a successful retail location, then look to other areas in your town or city where you can open another store. Be careful in your due diligence and take care selecting your new venue, as well as the team that will manage it for you.
#5 Launch Worldwide
Get your business to the global marketplace by hiring international trade consultants to introduce your brand and products to overseas markets.
Make Adjustments to Your Business Pan
After you have settled on a growth strategy that you feel will add value to your business, it’s time to update your business plan. Most entrepreneurs create a business plan when they first create their business concept. They then proceed to put it on the shelf and never look at it again. This behavior is a mistake; your business plan should act as a rudder, steering you through your business environment while giving you the foundation you need to continue your business operations. Add your new growth strategy to your business plan and continue to update it with your progress as you roll out your strategy.
Financing Growth Strategies
Financing your growth strategy will be a challenge if you have no acquired any funding during your start-up phase. While remaining debt free during your start-up is a sensible financial plan, it will not serve you in the growth phase.
Banks and other large financial institutions will not loan money to start-ups with no credit record. However, you can find the finance you need with a microlender. If you need a fast business loan bad credit doesn’t have to stop you from receiving the funding that you need. Microlenders will assume the risk of lending to your company and give you the funds you need to execute your strategy.
Every company needs to learn how to leverage debt to grow. However, the company needs to be responsible for its credit agreements and ensure that there is the necessary cash flow available to cover any interest payments.
Growing your business into a sustainable going concern is a challenge that is as demanding as starting the business. Take these five strategies and select the one that you feel suits your budget and your business plan. Your speed of execution counts, the faster you can implement your new business plan, the faster you can recover your investment into your growth.