From Rediff News. Read the entire article HERE.
After the rush of a small-business launch and the initial influx of curious customers, many small businesses reach a plateau. The proprietors are busy working hard to sustain the business doing what they’ve always done because it’s worked so far, but this approach often means the business acquires and retains a certain customer base and sales volume and then “hits a wall”.
Any business, but particularly a small business, must constantly adapt to changing market conditions, new business tools, and new sales opportunities to continue to grow and prosper. The small business owner must have one eye on routine operational tasks and one eye scanning the horizon for new opportunities. In this article we will discuss 10 breakout ideas for small businesses looking for growth opportunities.
Add complementary products and services
A great way to increase sales and bring new customers to your sales base is adding new complementary products and services. But how do you decide what to add without turning your business into a third-rate Wal-Mart? A great place to start is by reviewing the definition of your business.
For example, if you sell house siding, ask yourself, are you in the siding business or the exterior building materials business? The result may be that you redefine your business and add gutters and downspouts, roofing and other coverings to your product line.
Another surprisingly simple way to build a list of new products or services is to ask your customers what else they might buy from you if your business sold it. A few friendly conversations with customers and staff will likely get you more information than thousands of dollars spent on professional customer surveys.
Be sure to ask how much they would want to buy and how often to get a sense of whether the demand would be great enough to warrant the additional costs of building up this area of your business.
Explore new market niches
One way to find a new market niche is to seek alternative applications for your existing products and services, and we have a Cheez-y example of how this works. Kraft started out with a spreadable cheese product in a jar that could be spread on crackers for snacks – it was called Cheez Whiz.
This was fine, but selling a cracker topping will only take you so far in this world. That’s why Kraft expanded the scope of Cheez Whiz and started promoting it as a base for a variety of dips and food toppings. Soon Cheez Whiz was an ingredient in all sorts of recipes. Kraft wasn’t satisfied with only human consumption though. One of the latest unique uses of Cheez Whiz comes from a California fishing lure and bait company that sells Cheez Whiz in a prepackaged bait application, and it buys Cheez Whiz in 55 gallon drums.
If Kraft had stuck with the spreadable-cheese concept, sure, it would have covered a lot of crackers. But by thinking outside of its original intent, Kraft expanded the market and attracted customers it never would have targeted initially.
Find an unmet need in your industry and fill it
When you talk to your customers and clients, listen closely for this phrase: “If only they made/sold X”. Your job as a business is to find out what X is and provide it. It sounds obvious, but customers will tell you what they want if you will only take the time to listen. And the good news is that if you can find a way to fill that need, breakout sales are virtually guaranteed.
Take, for example, the local lumber yard that feels the heat as big box retailers muscle their way into the lumber business. There’s no way the smaller outfit can compete with the large volume and low prices of the big boxes. Instead the owner listens to his customers who tell him that the big chain stores lack custom or hard-to-find millwork and hardware.
This is an unmet need just waiting to be filled, and it could bring a new client base of suburban do-it-yourselfers who want to buy their unique weekend needs all in one place.
Use Internet and catalog sales tools
If you are reading this article, you’re no doubt aware that that the Internet has more to offer than photos of pets dressed up like humans … or humans dressed up like pets.
Many small businesses limit their sales reach and distribution to on-site, over-the-counter sales, but ecommerce can enhance your market reach, customer base and sales volume. Rather than the standard brick-and-mortar sales front, consider selling from a website, from an online storefront, a blog or from a printed catalog.
Let others sell your private-label products
By allowing distributors, wholesalers, big box stores and competitors to sell your products under their own label (also known as a white label product), you may be able to realise the benefits of increased production volume, including reduced unit cost, increased fixed-cost amortization possibilities, and increased sales revenue, all of which can bring significant bottom line growth to a small business.
This technique also allows the possibility of market segmentation under your own or other labels.
Build a better mousetrap – or at least buy one
We’re all aware of the “build a better mousetrap” strategy as a breakout technique, but many small business owners don’t know how to find technological innovations, patented products and processes in their industry, or how to license needed new technologies. There are a number of proprietary property licensing firms servicing companies of all sizes. These are easily found online if you search for “Technology Licensing”.
There are two types of licensing (in-licensing and out-licensing) and not all firms handle both types. In-licensing involves searching for a particular tech innovation to make a better or different product, or a technique to make it at a lower cost.
In this instance you would ask a proprietary licensing firm to search and acquire a license for your business to acquire the needed, and usually protected, technology. Conversely, if your firm has developed and patented proprietary technology that you want to license to others, an out-license firm will search for businesses interested in buying a license for the technology or innovation from your firm for their own use.
Improve productivity and efficiency through enterprise management software
Enterprise management software integrates your company’s existing and separate business functions and project tracking into one system. This streamlines operations, and can provide a parallel off-site system for backup and access from anywhere in the world. Software like this was once reserved for large firms with large budgets and the only suppliers were industry icons like SaaS, Microsoft and SAP.
These approaches can significantly reduce administrative staff load and costs, enhance productivity, efficiency and project tracking accuracy. This functional improvement can bring your business to a whole new level. The good news is that this software can now be had at reasonable rates from a variety of smaller software companies.
Align your products and services with popular values and trends
You may be able to align your company brand, products and services with local festivals, sports teams, known tourism sites, etc., to piggyback on their advertising, promotions and branding. In some cities local merchants combine their advertising with weekend festivals, the regional NFL and AHL team promotions, and profit from package bus tours to local historical sites.
Your business may also benefit from an association with popular commonly held themes such as an environmentally oriented program. This type of branding can enhance the reputation and credibility of your firm in your region and hype your sales.
A small business can often benefit from identifying with “hot” issues. Rather than offering direct dollar discounts, many auto dealerships and auto companies began offering free gasoline points as fuel prices skyrocketed in 2007-2008. The move spiked their sales and spread their promotional costs over an extended period.
In a similar vein, many small-scale fruit and produce farmers were feeling a price squeeze from the supermarket chains until they banded together to fund “buy locally grown food” campaigns.
Make use of clubs, associations and your competitors
Present your products and services to organizations with members who could be customers. Take advantage of your podium access at local service clubs like Rotary, Lions Club, Elks, VFW and the American Legion.
If you are a chamber of commerce or trade association member, volunteer to be a presenter at some of their seminars. If you can speak directly about your business, that’s always best, but your presence and individual contacts at these meetings are excellent breakout opportunities.
As a presenter at one of the service clubs you are viewed as an expert and an authority on the subject. Your bio will include your company name, and people like to work with an expert.
It may sound crazy, but it also pays to work with your competitors to grow the market in your industry. Rival hotels and golf courses in resort locations often work together closely to bring more customers to their location. They then compete for the business once the location visit is confirmed. It’s called “destination marketing”.
Co-competition and “clustering” with competitors can be a breakout technique that works to increase your business.
Export your products and services
Exporting your products and services takes some preparation in documentation, setting up dealers or distributors in foreign countries, learning the importation rules and tariff schedules for the destination countries and learning something about payment conditions and letters of credit.
Determining your transportation mode, understanding transfer of ownership laws, and being knowledgeable about any cultural issues involved is also important.
Exporting makes the world your marketplace and exposes you to customer populations with huge sales potentials, especially in emerging markets with a growing middle class.
There are many ways to adapt, invigorate and position a small business for a breakout to the next level of sales growth and profitability. It takes owner vigilance, awareness and creativity. It also tends to be the fun part of the business as well as its best chance for continued growth and success. In the business world, the only constant is change.
Adapt, break out and prosper.