Most financial experts consider growth to be one important measure of business health, but you might feel some reluctance to take risks that could possibly either hurt or help your company. On the other hand, doing nothing might be riskier than making calculated moves that can improve profit and revenue. Take a look at some strategies that can help you grow your business without a lot of risk.
4 Low-Risk Ways to Grow a Small Business
- Open a Second Location
If you own a local establishment that has already proven it can do well, you already have a model for business growth. According to the Small Business Administration, opening a second location is actually one of the most common ways that small businesses grow into larger ones. To minimize your risks, you might try to select another location that has similar demographics and traffic as your first location.
If you need to obtain cash to operate your expanded business for a while, you can always demonstrate that your first location has succeeded. That first location should make lenders eager to grant you access to working capital for your business. You already have solid proof that you know how to run a business.
- License or White Label Your Product
One very common way for software and other product developers to increase business is to offer a way for other distributors to license their product. In some cases, you may even allow companies to white label the product, which means they can sell it under their own brand. You can enjoy more revenues without having to actually engage in any more marketing to your end customers.
The licensees often require you the payment of a fee, so you can come up with a licensing system that fits your particular model. You might also charge one fee if the distributor keeps your brand and then a higher fee if they decide to market it under their own company’s name.
- Market Products Online
All sorts of companies have benefited from the chance to market their products far beyond their local Main Street. You can establish a website and other aspects of an internet platform for much less money than it would take you to open a brick-and-mortar storefront. In addition to sales from foot traffic, you can enjoy online orders.
You also have the chance to use your local business and your online business to help market each other. For example, you should make sure that in-person visitors learn about your website, and you might even offer online discounts. At the same time, you can promote your physical locations online to help increase foot traffic from people who are visiting your town.
- Diversify Your Offerings
If you intend to diversify too much and too quickly, you run the risk of trying to manage aspects of your business that are out of your normal comfort zone. Still, you should be able to offer some complementary products and services that your customers are likely to need. If a customer has enjoyed the experience with your company in the past, he or she is more likely to buy other products that you offer them.
For example, you might add tires to your oil-change and auto inspection business. If you sell auto and homeowners insurance, life or health insurance are natural products to add to your line. Seasonal companies can really benefit from adding products that appeal to consumers at other times of year. For example, you might add ski items to your online swim shop. If your luxury products don’t sell well when times get tough, you may consider adding some budget products.
Why Focus on Small Business Growth?
New business owners may solely focus on growth because they are starting from nothing. However, most small business owners hope to earn more revenue as time passes. Additional streams of revenue can protect companies against risks, ups and downs in the economy, and even the fickle moods of certain consumers. While you may want to move carefully into unfamiliar territory, you can probably find some excellent ways to grow your small business without taking a huge risk.