The Best Way to Grow
What’s the best way for your business to grow?
Business growth can take many different forms. The following might be among your goals:
Sell more to your existing clients
Getting more revenue from your current customers is usually a low-risk, low-cost strategy – whether you offer incentives on volume purchases or target existing clients with a new product. To make it work, you may need a new sales strategy, additional marketing or more competitive pricing.
Increase profit margins
Is there a gap between what you’re charging and what people are willing to pay? You may have identified a potential revenue growth opportunity. Similarly, if you can reduce your costs while holding sales prices steady, you’ll generate more revenue.
Expand your distribution area
Should you open your retail store in the new mall across town? If you have been successful selling in your existing market, you may want to consider opening a location in a new market. However, the potential for a high payoff might be offset by the high risks of entering an unknown region, such as managing performance from afar and the costs of entering a new market.
Find new client segments
Is there a market segment you’ve overlooked? Suppose, for example, you currently sell organic skin-care products to women. Maybe there is a market for men as well. Be prepared for increased marketing costs, however, in order to promote and sell your idea.
Purchase a competitor or complementary business
If you own a café, for example, perhaps you could purchase the magazine shop next door. Caution is the watchword with this complex strategy, but the payoff can be high.
Develop a new business model
A strategic alliance, such as partnering with another business to cross-sell products or services, can be an excellent way to expand. For example, if you are an interior designer, you can form a strategic partnership with a contractor and refer business to one another.
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RBC has developed a series of guidebooks that offer concise, practical information for all stages of your business. Click here to obtain a complete set of all our guides.
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