Many small businesses reach a plateau following the initial launch and influx of curious customers. One reason for this is that many small business owners, who are already busy enough with the day-to-day running of the business, get stuck in a rut doing what they’ve always done – it’s worked so far, after all. Still, it’s important to find time to work not just in your business, but on your business.
Unless you’re running a lifestyle business – where you make just enough to support yourself while having the freedom to do the things you want to do (and not much more) – you should be focused on growing your business. Of course, that’s easier said than done. To do so, you need to adapt to changing market conditions, new business tools and new sales opportunities. Instead of simply running the business (not to imply there’s anything easy about that), you have to be proactive about finding new opportunities. To get you started, here are 10 breakout ideas for small businesses, in no particular order.
(Just getting started with your own business? Check out Starting a Small Business in Tough Economic Times.)
Idea No.1 – Diversify
One way to diversify is to offer new products and services, which can help attract new customers and increase sales. The key here is to make sure those new items complement your existing lineup. For example, if you sell women’s fitness clothing, you might add a line of children’s clothes (moms like to work out with their kids). In general, avoid adding completely unrelated goods and services since it can dilute your brand and make consumers question your business sense. (Think: the gun, ammo and knife shop located in small-town America that added hand-scooped ice cream to its inventory – true story.) Don’t know what to add? Ask your customers and staff for ideas.
Idea No.2 – Explore New Niche Markets
A great way to create a new market niche is to find new uses for your existing products and services. Take Bubble Wrap. When it was created by Alfred W. Fielding and Marc Chavannes in 1957, it was meant to be a new type of textured wallpaper. The idea never caught on (surprise), but the two men discovered the product’s light weight and insulating properties made it very useful as both a greenhouse insulator and, more important, a packing material. Today, Bubble Wrap is Sealed Air Corporation’s signature brand, and the company has more than 14,000 employees serving customers in 117 countries. Think outside the box to find other applications for your products and services. (Read Find Your Niche Market for more.)
Idea No.3 - Build an Effective Digital Presence
It goes without saying that the Internet is a powerful tool when it comes to bringing consumers and businesses together. Even if you operate a brick-and-mortar location, a digital presence is critical to growing your brand. Research shows that more and more Americans like shopping online (even those who end up making the actual purchase in a store), and consumers are 71% more likely to make a purchase based on social media referrals. Putting forth the time and effort (and expense) to build an effective digital presence – including an e-commerce site and engaging social media channels – can be an excellent way to bring your business to the next level. (To get started, check out Implementing a Small Business Social Media Strategy.)
Idea No.4 – Fill an Unmet Need
If you find yourself saying, “No, I’m sorry, we don’t offer that,” there may be an opportunity to fill an unmet need. Say you own a coffee shop where you are asked dozens of times a day if you have any gluten-free goodies. That’s an unmet need. Or imagine you run an in-person consulting business, but more and more potential clients are asking you if you’ll meet via Skype (or some other digital means). That’s an unmet need. Listen closely to your customers – and ask your staff what they hear – to find out if there’s something missing from your offerings.
Idea No.5 – Think Globally
International trade exists because one country has a supply of something that is in demand by another. If you think there may be a demand for your products and services overseas, it’s worth looking into – you can cast a bigger net and potentially grow your business exponentially. Exporting takes work: You’ll have to prepare documents, set up dealers or distributors abroad, and learn about rules, tariff schedules, payment conditions and letters of credit. Not sure where to start? Try contacting trade groups, foreign chambers of commerce in the U.S. and branches of U.S. chambers of commerce in your destination market.
Idea No.6 – License Your Product
Licensing your product can be a relatively low-cost way to grow your business. When you license your product to a third-party manufacturer, it’s possible to get your product to market with little to no capital investment. You can avoid many of the manufacturing startup costs, including those for raw materials, tools and packaging – and you won’t need to develop marketing, sales and distribution networks. To get started, research companies that provide products or services similar to yours. Then, before reaching out, hire an experienced licensing attorney who can help you navigate the process. (For more, read Using Licensing to Rent Your Ideas to Large Companies.)
Idea No.7 – Franchise Your Concept
Some of the best-known brands are franchises – 7-Eleven, McDonald’s, Dunkin’ Donuts and The UPS Store, to name a few. Franchising is a proven route to rapid growth that can require less upfront capital than growing your business through company-owned units. Still, it’s not as easy as simply making the decision to franchise. Your business needs to have a good track record when it comes to sales and profitability, and you’ll spend considerable time (and money) completing the required paperwork and working through any regulatory/legal issues. Start by finding a good franchise attorney and actively networking within the franchise community.
Idea No.8 – White Label Your Product
A white label product is one that’s made by one company and packaged and sold by other companies under various brand names. White labeling works well for a variety of products, from electronics to cereal. If you allow distributors, wholesalers, big-box stores and other competitors to sell your products under their own label, you may be able to reap the benefits of increased production volume, including reduced unit cost and increased sales revenue – both of which can help grow your business.
Idea No.9 – Merge with Another Business
A wise business merger can help you tap a new market, reach new customers, freeze out a competitor or fill a gap in your company’s offerings. It also makes it possible to gain new products, technical knowledge, distribution channels and infrastructure – not to mention cash – to launch your business to the next level. In general, it takes a year or longer to get a company merger-ready, and you’ll need to clean up your balance sheet, drop underperforming products and/or services and have at least two years of audited financial statements on hand. (Check out Why Do Companies Merge with or Acquire Other Companies?)
Idea No.10 – Win a Government Contract
“The best way for a small business to grow is to have the federal government as a customer,” wrote Rep. Nydia M. Velázquez, a member of the House Small Business Committee, in August 2003. That statement still holds true today: The U.S. government awards nearly $500 billion in government contracts each year – making it the world’s biggest customer. Securing a government contract requires a significant amount of research and effort, but it could be well worth your time. To get started, work with your local SBA and SBDC offices, as well as your local, regional or state Economic Development Agency.
The Bottom Line
Many small businesses reach a plateau shortly after launching, once the initial buzz has died down. The good news is that there are lots of ways to adapt, invigorate and position your business for a breakout to the next level. If you’re willing to put in the time, effort and creativity, you could shape your business for continued growth and success.