It’s easy to make the mistake of chasing continuous growth when your business is still small. After all, we all dream of running a successful company. However, to ensure that your company doesn’t fold in only a couple of years, it’s essential that your growth strategy is set for long-term success.
So, how can you achieve sustainable growth and safeguard your business while maximising revenue (and without overwhelming your organization)? Let's explore the top 5 sustainable growth tips for success.
But before we begin, let’s define sustainable growth.
What is Sustainable Growth?
Spending more money than you earn seems like a crazy idea. You might live in a nice house or eat fancy meals now, but when the credit card bills start to come, the reality hits very hard. The same idea applies to small businesses, too. Sustainable growth is the key to avoiding financial hardship.
Sustainable growth is the rate at which you can comfortably expand your company without any significant problems, such as a decrease in resources, insufficient cash flow, or human resources. While your growth strategy should take into consideration all the ins and outs of your business, it should also plan for the unexpected, such as an economic crisis, inflation, or geopolitical issues that can affect how you operate.
Sustainable growth rate (SGR) can and should be calculated with the help of an external financial advisor or your in-house accountant team. SGR represents the rate at which your business can evolve, maintaining its current level of financial fitness without any outside help, such as debt or ventures.
5 Sustainable Growth Strategies for Small Businesses
1. Get Your Sales Channels Right
In our increasingly digital environment, finding low-cost or free sales channels is easier than ever. With most people spending an average of 2 hours and 28 minutes daily on social media, most of us stumble upon products and services online while endlessly scrolling through feeds and internet searches.
Investing in paid social media or search engine ads can be a quick win for small businesses. Explore influencer marketing opportunities or set up social media channels to attract new customers. If in-person sales are your cup of tea, seek new opportunities in your local area, and markets or partner with other small businesses.
While branching out your sales channels can be a relatively easy way to boost your sales, be mindful of experimenting with new sales strategies to ensure you can accommodate increased sales numbers without any issues.
2. Don’t Ignore Your Existing Customers
While solely focusing on chasing new customers can be tempting, don’t forget about your already loyal audience. With 65% of an average company’s business coming from existing customers, customer loyalty is one of the most essential weapons in your arsenal.
Remember, convincing a happy customer to use your services again is a much easier challenge than ‘cold calling’ new ones.
Besides boosting your cash flow, customer loyalty is also a significant growth strategy because your buyers can often become advocates for your small business, utilising word-of-mouth advertising and free product placements. Levelling up your customer service or offering referral or multi-buy discounts can all be great tools for success.
3. Reduce Your Costs
While the ultimate goal is expanding your business, cost reduction can sometimes be a very important growth strategy. Cost reduction can help weed out unnecessary expenses and give you a bigger budget to focus on your customers and products. Stay away from compromising on quality, however. Otherwise, you can quickly lose your hard-earned customer base.
There are easy ways to lower your spending, from going paperless and automating processes wherever possible to changing marketing strategies. Outsourcing can be a helpful solution if you can’t maintain your financial department but want to maintain high standards.
4. Use an External Financial Advisor
Maintaining an in-house financial department can often be a costly expense. Paying benefits, payroll, training, and holidays can quickly mount a steep bill. Using external financial advisors can be a great solution to get expert help with your business without breaking the bank. After all, they cost only a fraction compared to hiring in-house.
With 37% of small businesses outsourcing at least one business process, you are not alone in this decision. Outsourced financial departments have access to the latest software and information, ensuring your business is in good hands while guiding you through sustainable growth strategies and effective cost-reduction processes to speed up success.
5. Don’t Be Afraid to Partner Up
The small business landscape can often feel like a lonely place, but it doesn’t have to be. Partnering with fellow small businesses or larger companies can be a great way to increase your reach in the market while building a meaningful relationship.
An ideal business partnership should complement your products and services, share your vision, and attract similar target audiences. Sharing the workload on sales and marketing can be an effective cost-saving strategy, but more importantly, it can make the work less stressful. Sharing skills and resources is a great way to ensure sustainable growth and give you fresh ideas to expand your company and your products.
Growing a business can be a fantastic journey that can fill you with excitement, but often, it ends up being one of the most stressful experiences. With the above growth strategies, you can set your small business up for sustainable growth to reach its maximum potential. That said, you might need external help to get your business on track.
Here at Sanay, we’re dedicated to assisting small and medium-sized enterprises in their growth journey. We provide outsourced financial services that are designed to empower your business to expand and thrive. Our aim is to be your reliable partner in navigating the financial aspects of your SME's development.
Our team can help you figure out the ideal sustainable growth rate for your business and help you bring out the most of your company.