Want to scale and grow your business, but have limited resources? READ THIS!

Growing and scaling are crucial to the long-term survival of your business because they will drive business performance and profit. But many businesses find themselves in a paradox where the business needs more money (for investments) in order to make more money. This becomes even harder when you have limited profits coming into the company and you desperately need to find a way to make the best use of these limited resources. Being able to navigate these rough waters can make the difference between running a successful business or letting your dream die. Now you might wonder, how can I do this? Well… read on to find out different strategies you can employ to scale and grow your business when you have limited resources!

First, we must make a distinction between growing and scaling a business. Wait, there is a difference? Yes, there is! In general, growth refers to adding new resources to the business, such as people or capital, which then results in increased revenue. On the other hand, scaling refers to increasing revenue without making any substantial increases in resources. This difference needs to be understood because if you only keep on adding investments to your business in order to grow it without thinking of how to scale it, you will soon run into the problem of stagnating growth in revenue coupled with high costs! And we seriously do not want that to happen. 

That’s why you need to make a strategy about growing and scaling your business that is focused on increasing revenue AND efficiency. This is especially crucial if you have limited financial resources. So, let’s look at a few strategies that will help you grow your business and offer scaling opportunities too. 

Growth Strategies:

The best growth strategies in business can be derived from the well-known Ansoff Matrix. The Ansoff Matrix is a tool used by firms to determine growth strategies based on a product/market expansion grid. The matrix below outlines the four proposed strategies that help businesses grow. But remember, you must pick only one of the four above mentioned strategies because you have limited resources and do not want to stretch yourself too thin. 

Source: read here more about the Ansoff Matrix

However, in this blog we will only look at three out of the four strategies (Market Penetration, Market Development and Product Development). Now, let’s see some practical ways that you can implement these strategies:

  1. Market Penetration
    1. In order to penetrate the market deeper you need to become the most competitive player on the market. This is usually done by lowering your prices. However, if you cannot cut down prices any further because you are approaching your break-even point, we suggest an alternative way. Offer unique coupon codes. For example, if you see your customer leaving your website with a full basket and no purchase, you can send them a follow-up email after a few days offering them a unique coupon code they can use to purchase the basket at a lower price. That way you can incentivize more people to buy, whilst letting them know that this is only for a limited time and so, your customers won’t expect these lower prices to last forever. 
      1. Cost associated with Growth: connecting your website with professional data trackers of customers and an autoresponder for your email.
      2. Scaling: once you make the initial investment you can scale as much as you want. But it is important that you attract many new visitors to your website as well – this can be done by leveraging your Social Media accounts.
  1. Market Development:
    1. Small businesses’ budgets may prove to be limited for following such a growth strategy, however it is possible to achieve! You can branch out and find new uses for your current products or branch out into similar markets. For example, if you own a restaurant you can try to expand your market by offering private catering boxes that will be delivered to people’s houses directly (e.g. for celebrations). You might wonder, how is this different from food delivery? Well, you will decorate the food better and give specific instructions (or pictures) on how the customer can set up their table by themselves. This is market development into a new branch of catering.
      1. Scaling: the way to scale your business after you spend more time in the new market is to use your newly acquired  expertise (in catering) to educate people online by selling digital courses on catering, for example. This will require only a small investment but the gains can be significant.
  2. Product Development:
    1. Product development is an excellent strategy that can be used for scaling afterwards as well. You can simply add a few new features to your existing product or service. The best way to engage in product development when you have limited resources is to segment your customers. See which segment of customers is most profitable and adapt your product more towards their needs. For inspiration you can always send out a survey to your customers to fill out and see what new feature they would like. Or, you can decide what product to invest in by using the BCG matrix we talked about in our previous blog post.
      1. Scaling opportunities after developing a new product are huge. You can hire new salespeople, sell through more channels, etc.

Takeaway

Growing your business when you have limited resources is hard, but it can be done. You just need to pick one of the strategies discussed in this blog and be fully dedicated to achieving it. You must have a clear vision on what you would like to get from pursuing the specific strategy and plan your business operations with utmost detail. This way you can adopt a laser-like focus that will help you understand the importance behind every single dollar you spend and how this will reflect later on. After you make the initial investment to grow your business and the revenues increase, you can, of course, use the strategy of reinvesting part of this profit to scale the business further and earn more.
BIBO is a thriving business, media, and entrepreneurship community that fully embraces and encourages the practice of health and wellness practices for the entrepreneur! Be sure to join our growing Facebook group (www.facebook.com/groups/BIBOBusinessClub) and check out how we can help you get very affordable online media exposure and awareness for your product or service: www.biboweekly.com/services

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