Tips to help grow your small business
BY KAREN E. SPAEDER & OKECHUKWU NNODIM
Entrepreneurs, who have survived start-up and build successful small businesses, need to take further steps to expand their ventures. Okechukwu Nnodim outlines practical steps to help grow your business beyond its current status
It’s no doubt that many entrepreneurs carry out series of research before starting up their businesses. As a small business owner, you may have sought help from advisors, gotten information from books, magazines and other readily available sources and invested a lot of funds, time and sweat to get your business off the ground.
However, after all these strides, what next? If you have survived the hurdles of starting up and building a thriving business, you may be wondering how to take the next step and grow your business beyond its current status.
Small business consultants and owners of notable firms say there are many possibilities or ways on how to grow your business. According to them, the apt application of a particular procedure will determine the extent which an entrepreneur may go. They note that choosing the proper one or ones for your business will depend on the type of business you own, your available resources, and how much money, time and sweat you are willing to invest all over again. The Chief Executive, Solomon Hunt Limited, a business strategy and consulting firm, Mr. Tobenna Okoli, says an astute entrepreneur must have clarity of thought when it comes to growing his business.
He says, “An entrepreneur must be adept at discerning what is important, and what is not, in today’s mad world of information overload. Clarity of thought sets a successful entrepreneur above his peers by helping avoid distractions while distilling the key areas of focus.” He notes that when you have been able to decipher what to invest and how to go about your business expansion shrewdly, implementation should be done meticulously. Okoli calls for humility while trying to grow your business after recording success as a small business entrepreneur. He says, “Another trait is humility. Pride and business do not mix as oil and water. An astute entrepreneur must show humility in seeking out advice, in accepting failure and in relationship management. The world of business is filled with tough lessons and only a humble heart is suited for its vagaries.” Below are other useful tips to help you grow your small business to greater heights, according to experts:
- Open a new location
Some entrepreneurs may not consent to this, but once you’ve been fully established in a particular area, the next step should be to move to a new destination. This should be after meticulous considerations and research of the new location. Experts note that this might not be your best choice for business expansion, but that’s what often comes to mind first for so many entrepreneurs considering expansion. They note that physical expansion isn’t always the best growth answer without careful research, planning and number-planning. According to professionals, while opening in a new location, make sure you’re maintaining a consistent bottom-line profit and that you’ve shown steady growth over the past few years.
You should look at the trends, both economic and consumer, for indications on your company’s staying power and ensure that your administrative systems and management team are extraordinary, because you will need them to get the new location up and running. You can also prepare a complete business plan for a new location and determine where and how you’ll obtain financing. Also, choose your location based on what is best for your business, not your wallet. These tips will help you do well in the new place.
- Deal on licensed products
It is important that you license all your products, if possible. Experts say this can be an effective, low-cost growth medium, particularly if you have a service product or branded product. According to professionals, you can receive upfront monies and royalties from the continued sales or use of your software, name brand, etc, provided they are successful.
Experts say licensing also minimises your risk and is low cost in comparison to the price of starting your own company to produce and sell your brand or product. To find a licensing partner, start by researching companies that provide products or services similar to yours. But before you set up a meeting or contact any company, find a competent attorney who specializes in intellectual property rights. This is the best way to minimise the risk of losing control of your service or product.
- Establish an alliance
Professionals say aligning yourself with a similar type of business can be a powerful way to expand quickly. Learn how to develop you products and form alliances within your industry as this will help grow your business greatly when applied wisely. Form similar alliances with other businesses that deal in your product line and you can agree on commission to pay after any deal is struck. If the thought of shelling out commissions or any of your own money for the sake of an alliance makes you uncomfortable, experts advise that looking at the big picture, if you want to keep all the money to yourself, you’re really shooting yourself in the foot.
You need to align with other businesses that already have lists of prospective customers. It’s the fastest way to success. Alliances will help grow your business as customers who may not know you as an entity may know your partner. Once they buy your products from your partner, you will be recording sales and this will impact on your turnover. Good alliances make businesses grow. It provides room for you to grow your be venture as well as your partner. So form alliance and see your business grow beyond its present status.
- Diversify
One major way to grow your venture after its being built into a successful small business is to diversify. You can diversify your products or services. In diversifying, you may consider selling complementary products or services, teach adult education or other types of classes, import or export yours or others’ products, or become a paid speaker or columnist. According to professionals, diversifying is an excellent growth strategy, as it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins.
Experts say once you’ve been able to establish a loyal customer base and have achieved some retail brand recognition, you can broaden your product base with additional line extensions. This can broaden your target audience and can increase your presence in the marketplace, giving you the credibility to approach much larger customers. Meanwhile, you should make necessary research on the product or service line you wish to diversify into, so as to avoid making severe losses.
- Aim other markets
Since you are in the process of business expansion, you need to be visionary and aggressive. Target markets that you think your products can thrive in. Your current market is serving you well. Are there others? You bet. Other markets may fetch more income for you. Experts say if your consumer market ranges from teenagers to college students, you should think about where these people spend most of their time. Could you introduce your business to schools, clubs or colleges? You could offer discounts to special-interest clubs or donate part of your profits to schools and associations. This, in a way, will help woo some customers to you.
- Apply for government contracts
Though this may not be easy, experts say one of the best ways for a small business to grow is to have the government as a customer. The government is among the largest buyers of goods and services. If you can market some of your products to government agencies, and can complete a deal, this will impact on your turnover positively. It is therefore important to seek ways on how to work with your local government agencies as well as state and federal parastatals, as this will help you determine the types of contracts available to you. However, you must realise that a fair amount of patience is required in working to secure most government contracts. Experts say that requests for proposals usually require a significant amount of groundwork and research. If you’re not prepared to take the time to fully comply with their terms and conditions, you’ll only be wasting your time. This might sound like a lot of work, but it could be worth it. According to small business consultants, the good part about winning government contracts is that once you’ve jumped through the hoops and win a bid, you’re generally not subject to the level of external competition of the outside marketplaces. Therefore, if you have the opportunity to go for a government contract, please seize it. Tender your request and work hard to get it granted.
- Merge or acquire smaller businesses
This is another useful means that will help grow an entrepreneur’s business. Once you’ve successful grown your business to an enviable height, and you can comfortably acquire smaller ventures that operate in your sector, do not hesitate to do so if you have the opportunity. Also, if there are chances to merge with similar businesses, you can go ahead and strike the deal. Experts say by successfully acquiring or merging with another company, your customer and your firm will grow considerably. However, before acquiring or merging with any firm, make sure you do thorough research and consult with experts and legal practitioners to guide you on the terms and conditions that should be established.
- Expand globally
You don't need to acquire another business to expand globally. You just need to prime your offering for an international market through integration of new technologies.
You'll also need a foreign distributor who'll carry an inventory of your product and resell it in their domestic markets. You can locate foreign distributors by scouring your city or state for a foreign company with a Nigerian representative. Trade groups, foreign chambers of commerce in Nigeria, and branches of Nigerian chambers of commerce in foreign countries are also good places to find distributors you can work with.
- Expand to the Internet
Source: Punchng.com, entrepreneur.com
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