To achieve steady revenue growth, as a small business owner you must always look for ways to innovate your business to keep it relevant and competitive. This is innovation within your means; focusing on practical advancements that you can pull off.
You may offer additional products/services in your niche or expand to other markets. Either way, you need to reach the target audience, use the right software tools, and implement the right growth strategies. Whatever you need to do, we’ve got you covered with this guide, so read on.
Diversifying Product/Service Lines
Expanding within Your Niche
Your line of offerings is the first aspect to look at through the lens of achievable improvement. To avoid overextending resources, you may expand your product/service line within your niche or closely related areas rather than targeting new markets.
With a broader range of offerings that appeal to your existing customer base, you also encourage repeat business and are in a good position to profit from cross-selling, i.e. offering complementary products/services. And, you reduce dependency on your existing revenue stream.
Let’s take a real example of StudioSuits, a niche e-commerce business that sells custom suits. They slowly expanded their product offerings from just suits to more related products like jackets, shirts, tailored pants for men, and more.
By diversifying their product line within their existing niche, they offered their customers a more comprehensive wardrobe solution. This strategy increased the average order value and enhanced customer retention.
However, to do this successfully, you must know your audience. So, utilize available data to understand your customer base’s demographics, needs, and buying habits.
Such data includes:
- Purchasing data and customer feedback from surveys and social media.
- Data from analytics tools such as Google Analytics, Mailchimp, and social media analytics such as Facebook Insights/Twitter Analytics.
Understand also local market trends:
- Conduct competitive research on your direct and indirect competitors’ business models and offerings.
- Participate in industry events such as trade shows and workshops, which are frequently valuable sources of information about relevant market developments.
- Research industry publications, trade journals and whitepapers, and also government reports that provide insights into economic conditions and consumer spending habits.
You’ll find Google Trends to be a valuable tool when collecting market data. It allows you to learn the popularity and seasonality of certain search terms pertaining to your business.
After you’ve processed this data and learned what your audience needs, you’ll be able to tactically and effectively expand within your niche.
Venturing Into New Markets
Apart from attracting more customers within your niche, however, consider expanding into other (most often preferably) also niche markets. Such markets let you provide specialized products/services that larger businesses don’t provide.
Big companies are focused on producing in large quantities to benefit from lower per-unit costs, and niche markets are frequently too small to be profitable for such companies. There’s your opportunity to profit with less competition, leading to a stronger and loyal customer base.
Again, you’ll need to conduct market research using similar resources to identify emerging needs and gaps in the market. As you know, in niche markets, quality and uniqueness are key. Ensure that your new offerings have a unique selling proposition (USP) that distinguishes them from what’s available in the broader market.
While the market may be new, your business’s strengths in craftsmanship or specialized knowledge aren’t, so identify what they are and apply them to new offerings as well. For example, if you’re known for high-quality artisanal products, consider how this strength can translate into a new niche.
And to minimize risk, start small: test your new products/services with a segment of your audience to gather feedback. It’s an iterative process that allows you to refine your offerings before a full-scale launch and ensures that your high-quality specialized products will find their audience in new markets.
Developing A Strong Local and Niche Brand
So, you’ve got a plan as to what offerings to develop, but you also need to reach the people who’ll be interested in spending money on them.
Parallel to diversifying and expanding, you need a stable community around your brand, that will welcome and attract new customers through word-of-mouth. Easier said than done, as spreading brand awareness is one of the key challenges small businesses struggle with.
So, you must develop a strong local or niche brand that resonates with your target audience. Use your local heritage as a part of your brand story. If your business has been part of the community for generations or is involved in local activities, make that a focal point of your marketing. These activities may include engaging in community service or sponsoring local teams or charities.
Let’s take a look at an example of a niche brand – House of Joppa is a unique shop that sells rosary beads and Catholic home decorations. Besides selling pretty things, they are really connected to their community. They tell a story about their brand from their history and faith. They also use social media to share the owner’s stories and daily faith experiences.
Furthermore, even in the digital age, live events are incredibly helpful in marketing. So, organize community events, workshops, or seminars related to your business. For instance, our artisanal business might prepare a course teaching the basics of the craft.
We do live in the digital age, though, so disregarding your world wide web presence is a recipe for disaster. Small businesses will benefit from a strong local online presence, which includes investing in a good website, using SEO for local search engine results, and engaging with the community on social media. In this case, such an approach is usually more beneficial than organizing a broader marketing campaign.
To make (and keep) the customers loyal, leverage the advantage that small businesses have of forming personal connections with customers. This can be as simple as remembering a regular customer’s usual order.
It may also include personalized email communication, customizable options for your products/services, loyalty programs that reward repeat customers, and referral discounts.
Miscellaneous Growth Strategies
Whether focusing on your hitherto niche(s) or expanding further, keep in mind some general guidelines:
The Value of Sustainable Practices
These days, consumers are looking for environmentally friendly products/services. You don’t want to destroy the ecological living conditions on the planet either, but adopting sustainable practices is not only good for nature, but also cost-effective!
Investing in energy-efficient appliances and lighting, and renewable energy sources like solar panels, will cut energy costs in the long run. Further, you can implement recycling programs and reduce unnecessary material use in product packaging.
Source products and materials from sustainable suppliers, and highlight your sustainable practices in marketing campaigns.
Networking and Partnerships
Networking can open up new opportunities. By joining your local Chamber of Commerce and local business groups, and attending industry events, you can access a critical network of businesses and resources, further leading to partnerships.
Partnerships provide worthy mutual benefits, like shared marketing costs, local market insights, or expanded customer bases. You may, for instance, pool capital and staff, allowing you to undertake larger projects or orders. Or, organize a joint marketing campaign utilizing bundled promotions with a non-competitive business.
Building The Right Team
Ensure you have a team of skilled and motivated employees that can handle the challenges of business growth. Such workers are invaluable in terms of efficiency and innovation.
While you may need to expand it, even a small team will see significant benefits arising due to training programs, so provide regular training sessions to improve skills and knowledge. Conduct performance reviews to evaluate their efficiency.
Don’t forget the role of team morale in making the workforce ready to tackle growth. With this in mind, foster a supportive and inclusive workplace culture, recognize and reward achievements, and organize team-building events.
Flexible Business Planning
The market is always changing, and so should your business plan. Making it flexible will allow for quick responses to market challenges and new opportunities.
This means envisioning different scenarios that might happen in your plan (including developing contingency plans), using tech that can scale with your business and adapt to changing needs, and maintaining a healthy cash flow and reserve funds to handle unexpected expenditures.
We already discussed the need (and how) to be aware of the latest industry trends and consumer behaviors, and this is relevant here as well. You must track the key sales metrics and set a schedule (for example, quarterly), for reviewing and updating your business plan according to the relevant data.
The good news is that small businesses can more easily adapt than larger organizations, with some of the main factors being fewer layers of management, streamlined processes, niche expertise, and the flexibility to open a bank account tailored to business needs.
Utilizing Technology For Growth
Using the right software tools will be of great assistance when it comes to long-term revenue growth planning. However, even something as simple as adopting a new tool that, for instance, improves efficiency may be an important piece in the long-term revenue growth puzzle.
With such tools, you can automate many routine tasks, from accounting (FreshBooks) and inventory management (Zoho Inventory), to customer relationship management (Hubspot CRM) and email marketing (Mailchimp). Through automation, you reduce the labor costs associated with manual processes, allowing you to allocate more resources to growth-focused activities.
Let’s now take a look at the best software tools that will specifically help you with strategizing future growth and were designed with small business owners in mind:
- PlanGuru: A tool that provides valuable insights pertaining to your business’ budgeting, forecasting and financial planning;
- Revenue Growth Calculator: This one is handy for calculating how many leads you’ll need to get where you want to be;
- Excel What-If Analysis Tools: A cost-effective way to model different business scenarios, and you can also use the Oracle Crystal Ball add-in for predictive modeling and running simulations;
- SAP Business One: An ERP (enterprise resource planning) piece of software that integrates functions across finance, sales, and operations, and provides insights for informed decision-making.
Unlocking Growth in Your Small Business Journey
In this guide, we’ve examined the approaches a small business can take to achieve a long-term increase in revenue and the strategies allowing you to pull it off successfully.
There will be challenges but, with careful planning, the odds do work in your favor. You don’t have to be big to make it, as small businesses can leverage their unique advantages, allowing you to effectively place products and build a lovable brand, all the while using small-business-appropriate tools, and finally, grow.
Nina Petrov is a content marketing specialist, passionate about graphic design, content marketing, and the new generation of green and social businesses. She starts the day scrolling her digest on new digital trends while sipping a cup of coffee with milk and sugar. Her white little bunny tends to reply to your emails when she is on vacation.