There are certain tactics that can be used for business growth and expansion because of the fact that every company’s strengths and weaknesses (and threats and opportunities) are different, there really isn’t a cookie-cutter approach to recommend for successful growth and expansion.
But there is one thing that almost all growing businesses have in common, it’s that they’ve dealt with their cash flow issues. They’ve done what they can to avoid unpleasant surprises; they’ve put systems in place to make sure their customers are paying on time.
Perhaps most importantly, they’re regularly reviewing all their business financials, but especially their cash flow analysis. Specifically, they’re comparing their actual cash flow against their forecast so they can make smart, strategic spending decisions, and see when challenges are on the horizon.
If you aren’t familiar with cash flow what it is, and what you need to know about how monitoring it can help your business start with Cash Flow 101: The Basics.
When your cash flow is looking solid, you’re well-positioned for growth.
With that in mind, let’s take a look at four ways businesses can grow. Hopefully, you’ll be inspired to find the path that makes the most sense for your specific operation.
4 Tactics for Business Growth and Expansion
Continue growing your business with these 4 tactics:
1. Expand to new locations
Whether you’re running a retail shop, a medical practice, a restaurant, or even a business-to-business tech company, you may be able to generate higher profits by expanding your organization to new physical (or even digital) locations.
But, it’s important to remember that you can’t expect to simply open a second location, sit back, and watch your bank account get fatter. The success of your first (primary) location doesn’t really have any bearing on additional locations there are many variables at play, even if you’re paying keen attention to your financials. So before branching out, you need to consider a host of factors.
A few questions to guide you:
- Does your current location operate like well-oiled machines are they profitable and are your customers and employees happy?
- Would operating in a new location allow you to serve the same target market you’re serving now? Would you be attempting to reach a different target market? If so, how will you need to adjust your product or service? Have you done market research into the new area/market segment you’re considering?
- What economies of scale can you take advantage of like staff positions that you need whether your business employs 5 or 500 people, or lower prices on larger inventory/supplies orders, for example?
2. Develop new products
Starbucks started as a small local coffee shop. Now, it’s an international juggernaut that sells an eclectic assortment of beverages, as well as pastries, snacks, sandwiches, CDs, stuffed animals, and all sorts of other merchandise.
No matter what your business is selling, chances are you’ll be able to sell at least one more complementary product. For example, if your business is a copywriting agency, you might want to think about hiring a graphic designer so that you can sell infographics, logos, and other visual assets.
Simply put, developing new products assuming they’re the ones your customers want will almost assuredly result in new revenue streams.
Here are a few easy ways to figure out what your customers want:
- Routinely solicit your customers’ feedback and suggestions
- Keep an eye on your competitors’ product lines
- Run an MVP “sale” where you see if a low volume of a new product sells, or if it just sits
3. Look for new partnerships
Being a small business owner can be difficult, particularly when you’re trying to make a go of it on your own. But the good news is that by establishing partnerships with other like-minded businesses, you may very well see your profits increase as your brand is exposed to a whole new community of supporters.
Food delivery services like DoorDash were founded on this premise they could help restaurants that wanted to avoid running their own delivery services still offer that option to their customers.
Another example are SaaS companies that rely on (or are augmented by) an API with another company’s software. If there’s a partnership in place, there’s the opportunity for both companies to co-market or promote each other’s solution.
So how exactly might your business stand to benefit from partnerships? Once you figure that out, it might be time to pursue a few.
4. Launch new marketing campaigns
With more money in your company’s bank account, now is probably as good a time as any to go back to the drawing board and figure out whether your brand stands to benefit from embarking on new marketing campaigns.
From time to time, any brand no matter how well-known it might be needs to remind its customers that it’s still relevant.
Case in point: Old Spice, the long-established deodorant and fragrance maker targeted to men. While the company could choose to rest on its laurels trying to milk its name recognition and track record for all they’re worth instead, it chooses to invest in clever new marketing campaigns.
Check out this popular commercial, for example. Not only is it pretty hilarious (at least in terms of a commercial produced by a brand that makes fragrances for men), but at the time of this writing, it has generated more than 56 million views on YouTube.
It’s true that your small business might not have as much cash in the bank as Old Spice (which, by the way, is owned by Proctor & Gamble). But when done correctly, new marketing campaigns could generate interest from potential customers while also reminding existing ones why they should continue to support your brand.
Not sure where to focus your resources? Consider doing a SWOT analysis. It’s an in-depth look at your strengths, weaknesses, opportunities, and threats. From there, take a look at your sales forecast.
At its root, your sales forecast is a representation of your goals and aspirations for your company. Build your new marketing plans around strategies and tactics that will help you meet those sales goals.
Remember, successfully growing your business won’t happen overnight it can be a long, tiresome, and stressful process. But with the right plans in place, you’ll be able to grow organically.
Keep in mind that these four tactics aren’t remedies for cash flow problems. They’re really geared toward businesses that are demonstrating solid financial performance.
Trying to fix a cash flow issue with one of these tactics, without addressing some of the common cash flow pitfalls (like out of control accounts receivable, or not getting paid on time) can be harmful to your business.