- Growing a business may take time, but there are a few things you can do to scale your company more quickly.
- Calculating the growth rates of various metrics and then comparing them to one another gives you a more complete picture of your business’s trajectory.
- While there is no way to guarantee success, implementing these tips can put your business in the best position to succeed and grow.
- This article is for entrepreneurs who want to measure their business’s growth while continuing the success of their company as it scales.
When you first launch your business, your main goal is to establish your brand and start growing. Unfortunately, this doesn’t happen overnight. Growth is an ongoing process that requires hard work, patience and dedication. There’s no special step or secret way to surpass other businesses in the industry or achieve immediate success.
There are, however, proven ways to reach growth milestones that can catapult a business to success. We asked small business leaders to share their tips for accelerating growth.
How to grow your business quickly
There are plenty of things you can do to put your company on the path to growth. These 13 tips offer tried-and-true methods for scaling up, no matter what your business does.
1. Hire the right people.
Before you can even think about your company’s growth trajectory, you need to have a solid staff to help you achieve your goals.
“Hiring the absolute best people you can is a surefire way to ensure fast growth,” said Christian Lanng, CEO and co-founder of business software provider Tradeshift. “It’s all about having the right team.”
When you have hardworking employees who are dedicated to your company’s success, your business will be better equipped for continued growth. In addition, delegating tasks to focus on important work will free up your time and energy, allowing you to perform at your best and cultivate a collaborative work culture.
2. Focus on established revenue sources.
Rather than trying to acquire new customers, direct your attention to the core customers you already have, suggested Bill Reilly, a Wisconsin-based auto repair entrepreneur. You can do this by implementing a referral or customer loyalty program or trying out marketing strategies based on previous purchasing behaviors to encourage repeat business, he said.
Focusing on your established market is especially important if you’re trying to get funding. “In the past, we would highlight our business goal to become a franchise, which didn’t resonate with banks,” Reilly said. “We learned to emphasize that there is a large market for what we do. This would pique a banker’s interest, because they care about the return on investment more than your business aspirations.”
Maximize your current customer base by implementing a customer loyalty program or trying out marketing strategies based on customers’ purchase histories.
3. Reduce your risks.
Risk is an inevitable part of starting and growing a business. It’s impossible to control everything, but there are many ways to limit internal and external threats to your company and its growth. One important resource to help you accomplish this is your business insurance provider.
“Small businesses need to manage their growth to avert disruptions that can bring business to a grinding halt,” said Mike DeHetre, senior vice president of underwriting and insurance at Preferred Mutual. For example, “the theft of employee data, customer records, and product designs can destroy a small business, generating significant costs and eroding customer confidence and loyalty,” he said. “Not every business owner’s policy covers data breaches or other cyber losses. Small businesses should be prepared by seeking insurance products that help them recover, including those that cover the cost of remediation and lawsuits.”
As your small business grows, you may add space or equipment, create new products or services, or increase your operating and distribution footprint. Therefore, DeHetre recommended reviewing your policy periodically to ensure you have the right coverage.
“It’s easy to forget this step amid rapid expansion, but you don’t want to find out that you’ve outgrown your coverage just when you need it the most,” he said.
4. Be adaptable.
One trait that many successful startups have in common is the ability to switch directions quickly in response to changes in the market. Lanng said an agile approach to development, both in your product and your company, will help you grow more quickly.
“By allowing yourself to adapt and change quickly, you’re able to test different approaches to business and find out what works best,” Lanng told Business News Daily. “It allows you to fail, pick yourself back up and keep going.”
Chris Cornell, founder and CEO of Manhead Merchandise, said his company has found adaptability to be key in expanding its client base beyond its initial focus on music merchandise.
“Look to current pop culture trends for an opportunity to become part of the movement when it makes sense,” he said. “In an era of internet fame, we looked to expand our horizons beyond the music industry. We partnered with ‘The King of Pop Culture’ and Insta-famous pup Doug the Pug to release his new gear. Recognizing the reach and popularity of Doug, we were able to take his merchandise to the next level, extending our business model beyond bands.”
5. Focus on the customer experience.
Customers’ perceptions can make or break your business. Deliver quality experiences and products, and they’ll quickly sing your praises on social media; mess it up, and they’ll tell the world even faster. Fast growth depends on making your current and potential customers happy.
“Compared with large companies, small businesses are nimble and often better able to see, anticipate and respond to their customers’ needs,” DeHetre said. “The most successful small businesses exploit this advantage by bringing new and innovative products and services to market more quickly and developing and nurturing long-term customer relationships.”
Dennis Tanjeloff, president and CEO of Astro Gallery of Gems, agreed. He said listening to your customers and giving them what they want is of utmost importance.
Customer relationship management (CRM) software can help you understand your customers better. Check out our picks for the best CRM software available for small businesses.
“Diversify your offerings so you can best cater to the customers’ changing tastes,” Tanjeloff said. “Remember, you are here to serve the customer — it’s why you are open for business.”
While engaging with your audience is crucial, personalizing the experience can boost and strengthen that relationship. “At Manhead, we come up with unique creative designs, customized storefronts, and pop-up shops personalized for each band [we work with] to help them engage with fans in a new way,” Cornell said.
Small businesses can quickly adapt and respond to customers’ needs. This agility can give them an advantage over larger businesses.
6. Invest in yourself.
In the early stages of your business, you’ll likely see a very lean profit margin (or no profit at all), so any money you make should go directly to helping your business grow.
“A startup’s ability to invest in itself [helps] accelerate growth,” Lanng said. “In those early years, it’s critical to make sure that you’re redirecting any revenues back into the company. It’s vital to invest early and heavily in order to grow quickly.”
While it might be tempting to pocket all of your profits, it’s better to invest in your business’s growth so you can reap bigger benefits later. Determine which parts of your business need more attention. For example, do you need to hire more workers, expand your marketing efforts, or secure additional funding? When you find a crucial area that needs improvement, give that area your financial support.
7. Always think ahead.
While agility is an important quality for a startup, you can’t fly by the seat of your pants when you’re running a business. Planning your next step — in anticipation of all possible scenarios — is the best way to stay grounded and secure as your business evolves.
Thinking ahead is broad advice, but it can be as simple as reviewing all ongoing contracts, like comparing rates with the best credit card processors and seeing if you can negotiate a better deal.
8. Boost your customer service.
Another great method of growing your business is to focus on providing superior customer service. When you exceed customers’ expectations, they are likely to tell their friends, family and followers about your business.
When you go the extra mile, such as by offering discounts if a customer has a poor experience or following up to ensure a client was satisfied with your product or service, you establish a reputation for great customer service. [Make sure you have the best business phone system for your customer service team.]
9. Focus on social media.
Another method to grow your business is to create profiles on all of the major social media platforms, including Instagram, Facebook and Twitter. An active profile helps you market your business and interact with far more potential customers.
When your business has regularly updated accounts on the major platforms, consumers can find your business more easily and are more likely to share your business with their friends. You’ll also create a more engaging experience for your audience, helping them feel more connected to your brand and cultivating trust.
10. Attend networking events.
Networking events allow you to connect with people in your industry, many of whom have unique perspectives and insights that can help you grow your business. The connections and relationships that come from attending networking events can be beneficial for years to come.
In addition, networking events offer you the opportunity to learn from others who operate in your industry or adjacent to it. Whether they’ve had similar problems as you, have heard news that’s relevant to your business, or just have a great network of professionals you can tap into, expanding your network offers a wealth of opportunities.
11. Practice corporate social responsibility.
Consumers want to buy from businesses that are passionate about causes that help make the world a better place. Whether you donate to cancer research or support a nonprofit such as a homeless shelter, look for ways to contribute meaningfully to the causes you support, and share that with your customers.
You could publicly express your support to underserved communities, donate to various organizations, offer your time to fundraisers, and provide sustainable products to help the environment. There are many ways to be socially responsible as a business; find a few that work for you.
12. Host local events.
Although attending events is a great way to grow your network, hosting your own events within your community is even more beneficial, whether it’s running a fundraiser, offering exclusive deals on a holiday, or sponsoring a local sports team. Creating a unique experience for your customers will foster more personal relationships with them.
If you host events in your area, you’ll increase brand awareness and show your community that you are invested in their well-being. When you are committed to them, they’ll feel more loyal to your business.
13. Research your competitors.
Although it might not elicit immediate growth, researching your competitors is one of the most important first steps in launching your business. Ask yourself who your competitors are, what they’re doing (that you’re not doing) that works for them, and how you can differentiate your business from theirs. The answers to these questions will help you form a more productive business strategy that defines the areas of your business that require more attention.
If you want to analyze the competition the right way, read our guide on how to conduct a competitive analysis, which offers key tips that will help you take advantage of opportunities your competitors have left on the table.
How to measure business growth
There are a few factors to examine to gauge your business’s growth. Depending on your goals, you may prefer one factor over another, but analyzing them in context with one another can give you the clearest picture of how well your business is scaling.
- Revenue: Revenue is a go-to metric in establishing business growth; after all, it’s the amount of money your company is bringing in. Revenue growth over time can be good, as it generally means you’re making more sales or higher-value sales. However, it’s important to balance revenue with expenses, because making more often means spending more.
- Profit: A more important indicator than revenue is profit, which is what your company has netted over the course of a given period. When it comes to profit, a positive growth rate is great, but it doesn’t always tell the whole story. If your profit margin is healthy, even a flat profitability year over year might not be bad. But for new businesses, quick profitability growth should be a key focus.
- Market share: Market share describes how dominant your business is in its space compared with competitors. For new companies breaking into an industry, growing market share rapidly is a major concern. Without gaining a significant foothold against your competitors, it will be hard to drive sales to grow revenue.
- Customer acquisition: One of the best ways to grow market share is by focusing on lead generation and sales volume. By getting your brand in front of potential customers and then converting them to make a sale, you can grow your company’s market share and revenue at the same time.
- Customer retention: Acquiring new customers helps you gain market share only if you retain those customers, so focusing on customer retention and improving this metric over time is also key to monitoring the growth of your business.
- Team size: Growing your team is a significant expense, but the size of your team also represents how much you can do. Balancing a team that can meet operational needs with the payroll budget is a key challenge for every entrepreneur, so monitoring the growth of your team over time is particularly important.
How to calculate business growth rate
Did you know there’s a mathematical formula for calculating business growth? Best of all, it’s fairly simple! First, pick a metric, such as revenue. Then, examine two periods: the starting value and the end value. Divide the end value by the starting value, and multiply the quotient by 100. The result is your growth rate. This formula can be expressed as follows:
(End value/starting value) x 100% = Growth rate
For example, if your annual revenue in year one of opening your business was $10,000 and has grown to $50,000 by year two, your formula would look like this:
(50,000/10,000) x 100% = 500% revenue growth rate year over year
Understanding the growth rate of any given metric can show you how your business is performing in each area, and comparing these results in different areas can give you critical context. If your revenue has grown significantly but your profitability has declined, for example, it means your expenses have outpaced your income and your business may be headed in the wrong direction.
Don’t look at any metrics in isolation. Compare key metrics — such as revenue, profitability and customer acquisition — to determine how fast a business is growing and whether that growth is sustainable.
Scaling responsibly leads to long-term success
Growth is important for any business, but it’s important to be smart about how you scale. Growing too quickly can leave you with a sizable payroll burden or customer demands you can’t meet, thereby setting you up for failure in the long run. Incremental growth and deliberate decisions about how to expand your operations and team are the best methods for establishing a business that’s set up for success well into the future. Keeping the tips above in mind is a great way to do just that.
Tejas Vemparala contributed to this article.