BBB Business Tip: 7 small business growth strategies to adopt now

If you took on the challenge of launching a small business, you will likely be incredibly motivated and determined. Running a small business can be difficult, usually because you rely mainly on yourself. You often need to be your marketing team, operations manager, accountant, CEO, and secretary. You also have to be the one to drive new business and growth.

On average, in the United States, small businesses had a growth rate of 12.2% in 2022. Considering that companies (of all sizes) typically aim to achieve a growth rate of 15-45% annually, it would make sense that small businesses are slightly below this range.

Keeping an annual growth rate of at least 12% or higher will ensure that you can keep up with inflation while also having leftover profits to continue to invest in your business to facilitate future growth.

Business growth is essential in any year, but the last few years produced unique difficulties. Now more than ever, small business owners need to try new approaches to see continued growth and success.

If you need to know where to start, BBB has seven fantastic business growth strategies every small business owner should adopt now.

1. Market penetration

The most popular growth strategy is market penetration. This option doesn't require altering your product, service, or target audience. Instead, gain a larger market share by competing with others in your industry.

You can implement a market penetration growth strategy in a few ways:

• Price your products lower than your competition.
• Provide a better quality of products or services.
• Provide a better customer experience.
• Improve your local pull strategy with increased promotions and discounts.
• Analyze what your competition does to acquire customers and use similar strategies.

2. Customer loyalty program

Customer loyalty programs have grown in popularity in recent years for a good reason. Simply put, customer loyalty programs work. Customers enjoy signing up for them and will go out of their way to shop at businesses that reward their loyalty. Also, they'll often mention the program to others, increasing your chance for referrals.

Some exciting customer loyalty program statistics include:

• 90% of American companies have some sort of customer loyalty program.
• 52% of American customers will join a company's customer loyalty program if they are regular visitors to that business.
• 71% of customers say a customer loyalty program is integral to their relationship with a brand.
• Adding a loyalty program to an e-commerce business can increase the average order quantity by over 300%.

A customer loyalty program doesn't have to be complicated to implement. You can easily create a program that integrates with your online business sales tool. If you want to start small, you could simply hand customers a card that requires ten stamps to get a reward. Design a program that works for you and your business.

3. Market development

With market penetration, the size of your target market doesn't change. You're simply trying to capture more sales from the same group you've always been targeting.

On the other hand, a market development growth strategy looks to sell your product or service to a new pool of customers that only interacted with your brand after. Market development requires finding new places or ways to sell your product or service.

Some examples of a market development growth strategy include:

• Having a booth at your local farmer's market.
• Making a move to sell your products online if you've only been selling through a physical location.
• Going to fairs and markets in nearby cities or towns.

4. Strategic partnerships

An excellent growth strategy is to form a strategic partnership. If you can find another small business to partner with, you can benefit from giving each other access to new clientele. Could you partner with a company that complements your business without being a competitor?

Some examples of strategic partnerships could be:

• A nail salon and hair salon partnering for package discounts.
• A bakery supplying their pastries to a local cafe.
• A coffee shop selling its beans at a local grocer.
• A furniture store and an interior designer partnership.

5. Product expansion

Another growth strategy to consider is product expansion. Can you produce and sell complementary products or services in addition to your already existing business model? Many businesses implement product expansion because it allows them to upsell to their current customer base.

If you're a restaurant, you could sell at-home meal kits. Salons typically sell products for their clients to take home. A gym might start selling protein bars and healthy snacks for its customers. These are opportunities for you to get more from your customer every time you interact with them.

6. International expansion

Many small businesses focus on their local market. However, considering how well-connected the world is now, this can be something other than the default anymore. Could you determine if you have something that you can offer the international market? If the answer is yes, you've substantially increased your potential customer base.

International expansion will take some setup. You'll need to update (or create) your website, establish shipping costs, consider international duties, set a return policy, and start global marketing efforts. However, the potential is endless once you have the logistics figured out. You can now literally connect with the whole world and sell to anyone!

7. New sales and marketing tactics

Once you test it out, you'll only know how effective or ineffective something is. For all you know, the key to your success lies with a marketing campaign you've never even considered.

Some popular opportunities for small businesses include:

• Buy now and pay later plans. If you're selling products, you can offer your customers the "buy now, pay later" option. This trend has been growing rapidly lately and allows customers the flexibility to pay in installments.
• Subscription models. For services, a similar approach is the subscription model. Companies providing services, such as waxing or oil changes, offer customers the opportunity to pay one annual price for a predetermined number of appointments in the year. The subscription model allows you to lock your customer in for an extended period and ensure repeat business.
• Influencers. If younger generations use your product or service, consider getting a local influencer to promote your business. You can send a free product or a coupon for a free service to influencers in your area and ask them to review it with their followers. It's essentially free advertising that may get you a lot of local attention. Learn more about how social media influencers are changing the marketplace.
• Digital Ads. Take a course and learn a little about online paid and social media ads. You can play around with a small budget to see if it gives your business any results.

These are just a few ideas a small business can use to see growth. If you have a tried-and-true marketing strategy, that is great. However, it takes significant risks to see big rewards, so trying new things is always important.

Moving forward

Your small business can continue to grow if you have the plan to get there. Using these seven strategies, you can help your business grow year after year and continue improving.

Getting accredited is a great way to establish yourself as a trustworthy small business. Visit BBB.org to learn more about BBB Accreditation and how it can help your business.

 

BBB of Southern Piedmont and Western N.C. contributed this article.