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Personal Finance

How SMEs step into big business league

Attracting new customers to your business is
Attracting new customers to your business is never a bad approach. FILE PHOTO | NMG 

Small businesses do not always stay small. Large companies, such as Goggle, WallMart, Alibaba and Ford, started small and grew to become major players in the national and international marketplace.

Many computer-industry leaders began as one man briefcase business working on hand-assembled machines out of their homes, restaurants and vehicles. Microsoft and Amazon are prime examples of how a small business idea can change the world.

Learning how to grow your business isn’t just a worthy goal, it is a necessity for its survival and your economic well-being. What can you do to get your business beyond the bare sustenance level? What can you do to turn it into the income-generating powerhouse you thought of. Try one or more of these growth strategies. All have been successfully used by other businesses and, with some planning and investment, will work for you.

Diversify your products or services

The key to successful growth through diversification has a basis on similarity. You want to focus on the related needs of your already established market or on market segments with similar needs and characteristics. For instance, an artist might also sell frames and framing services.

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Extend your market reach

There are several ways of growing your business by making your product or service available to a new pool of customers. The most obvious is to open stores in new locations. New locations can also be virtual, such as a social media, website with an online store.

Another approach is to extend your reach through advertising. Once you’ve identified a new market, you might advertise in select media that targets that market. If your new market consists of a younger demographic, you may want to use social media for advertising.

Penetrate your existing market

When you think about how to grow your business, the first thing that probably comes to mind is getting new customers, but the ones you already have are your best asset for increasing your sales.

It’s easier and more cost-effective to get people who are already buying from you to buy more than to find new customers and persuade them to buy from you. So focus on ways to get customers coming back.

Innovate your product or service

Discovering and promoting new uses for your products or services is a great way to attract existing customers to buy more and attract new customers.

Think petroleum jelly (Arimis) women’s favourite cosmetic jelly and at the same tome a milking jelly and how few of these would actually be sold if they only had one use.

Exporting

Expanding into international markets can also be a powerful boost to your business’s bottom line. Like franchising, this is a way of growing your business that requires a major commitment of time and resources, but it can be extremely rewarding.

Ask for referrals

Of course, attracting new customers to your business is never a bad approach. One of the easiest ways to do this is to ask your current customers for referrals.

Having good products and great customer service and just assuming that your customers are passing the word about your business isn’t going to do much to increase your customer base; you have to actively seek referrals.

During or after every job or sale, ask the satisfied customer if they know anyone else who would be interested in your products or services.

Participate in trade shows

Trade shows can be a great way to grow, too. Because trade shows draw people who are already interested in the type of product or service you offer, they can powerfully improve your bottom line.

The trick is to select the trade shows you participate in carefully, seeking the right match for your product or service.

Contain your costs

Bear in mind that when we’re talking about growing your business, we’re actually talking about growing your business’s bottom line. And the difference between pre-tax and post-tax money can make this a very effective growth strategy. There are two main approaches to cutting costs; liquidating your loss making products and improving your inventory turnover.

Conquer a niche market

Remember the analogy of the big fish in the small pond? That’s essentially how this strategy for growing your business works. The niche market is the pond; a narrowly defined group of customers. Think of them as a subset of the larger market, whose needs are not being met, and concentrate on meeting those unmet needs. A nursery, for instance, might specialise in roses while a home design business might focus on window treatments.

Franchising

The stories of entrepreneurs, who have become both well-known and well-heeled due to franchising their small businesses are legion, and not just stories. If you have a successful business and can develop a system that ensures that others can duplicate your success, franchising may be the fast track for growing your business.

There you have it, how to grow your SME business. Don’t let this list overwhelm you. Pick one or two of these ideas that are suitable to your business and your circumstances and get busy developing your growth plan

While you probably won’t experience growth right away, whichever way of expanding your business you choose, you will see progress if you keep at it, and will successfully transform your business into all you want it to be.

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