Growth is a buzzword in business. Every entrepreneur wants year-over-year growth. But without the proper infrastructure in place, your business will quickly crumble.
Imagine throwing more money into advertising to boost awareness of a low-quality product. Customers will probably become disgruntled, hurting your reputation in the long run.
Instead, focus on sustainable growth by developing a strong foundation first.
In this guide, we'll help you assess your core strengths and identify the right opportunities, so you can invest in areas that can deliver the highest returns for your business.
Leverage SWOT Analysis to Identify Strengths and Weaknesses
Before you're ready to hit the turbo jets on your business, you want to assess your business's current "fitness" level or condition. A SWOT analysis is a technique to help you discover your company's strengths, weaknesses, opportunities, and threats.
Here are questions to ask yourself when performing a SWOT analysis:
Strengths:
• What do we do best?
• What features or categories beat our competitors?
• What do our customers like about our company?
• What makes us unique?
Weaknesses:
• What can be improved, and which initiatives are underperforming?
• What resources could improve our performance?
Opportunities:
• What are the market gaps in our services?
Threats:
• What trends or changes in the industry are a cause for concern?
• Where are competitors outperforming us?
Here's an example to help illustrate the SWOTanalysis put into practice:
• Strengths: Customer service is world-class, with an NPS score of 90 from our customers.
• Weaknesses: Our website traffic could be higher due to a lack of marketing plan and budget.
• Opportunities: We'll improve our e-commerce visibility by running advertisements on social media and focusing on brand partnerships.
• Threats: A new supplier could offer a similar product for cheaper.
Once you identify your strengths and growth opportunities, choose which products or services to double down on.
Use the BCG Growth Share Matrix to Determine Where to Invest
Consider the BCG Growth Share Matrix exercise if you're a business offering multiple products or services. This planning tool helps evaluate a company's product portfolio to see which ones are worth investing in.
The BCG matrix is divided into four categories:
• Cash cows: Products with a high market share and low market growth rate.
• Dogs: Products with low market share and low market growth rate.
• Stars: Products with a high market growth rate and market share.
• Question marks: Products with a low market share and high market growth rate.
Cash cows are your most profitable products but require very little upkeep. Stars are products that generate lots of cash but require a lot of costs and upkeep to manage their operations. Question marks are products that are not yet proven but have the potential to become cash cows.
Here's an example of what the BCG Matrix probably looks like for Apple:
• Stars: iPhone, iPad, Apple Watch
• Question Marks: Apple TV
• Cash Cows: MacBook
• Dogs: iPod
Deciding which product types you want to grow as a business owner would be best. Ideally, you want to focus on stars and cash cows. These are the breadwinners of your company. Cash cows have the highest profit margins, so doubling down on these product lines or services can offer enormous growth.
For example, gyms focus on marketing their group fitness classes since they're the most profitable offer. You can have 30 people in a class to one instructor compared to a one-on-one personal training session. Start with your most beneficial offers and scale those products to help grow your company.
Double Down on What's Working: 3 Ways to Grow Your Business
Now that you know what to focus on, let's discuss practical tips for growing your business.
1. Hire the Right People
Business growth starts with hiring the right people. If you're a solopreneur, you'll want to start by outsourcing or finding people to perform tasks that drain you. These can be administrative tasks, client communication, or customer support.
As you grow into a 5- to 10-person business, you want to duplicate yourself. Find people who can do the exact type of work you're doing.
For example, if you're running a digital marketing agency, find other creatives, such as social media specialists, ad managers, and content creators to fulfill client work. As you expand, you can begin hiring employees for different business departments, like sales, marketing, human resources, and operations. The key to hiring is to find candidates who embody your company culture and have the skill set requirements you're looking for.
2. Improve Customer Retention
Poor customer retention is like filling up a leaking bucket. Customer retention is a way to measure customer loyalty over time.
You can start with customer relationship management (CRM) software to keep your customer information organized. When communicating with your customers, you can leave notes about their preferences to constantly tailor your service to fit their needs.
Could you create a customer feedback process, such as sending out NPS surveys? This allows them to provide feedback about your service. 89% of companies believe excellent customer service is crucial to customer retention. Ultimately, giving them a great experience should keep them around for years.
3. Invest in Effective Marketing and Advertising
The right marketing strategies can help expand brand awareness and increase your leads, thus fueling your business growth. Ensure your sales and marketing teams collaborate and do not operate in separate silos.
There are a million ways to go about marketing, and the right strategy will depend on your business model, target audience, and unique strengths.
An eCommerce business might benefit from influencer marketing and partnerships to build trust with its target audience. In contrast, a local brick-and-mortar may consider more traditional approaches like radio advertisements, local PPC targeting, or Yelp ads.
The Takeaway
Growth doesn't happen overnight. Before you gameplan your growth strategy, we recommend assessing your business to identify its strengths and flaws. Understanding your core audience and focusing on the highest leverage points in your business can help you grow more efficiently.
