Recession - Now Is The Time To Grow Your Business

May 9, 2008

Let’s talk about growing your business. Wait a minute,” I hear you saying, “in this economy I’m lucky to keep my business afloat. How can I think of expanding?”

Here is a newsflash: Now is exactly the time to consider growing your business.

Why?

Brainstorming and actively working on growing your business drives you to also figure out how to survive.

The same principles apply: You have to determine how to use limited resources to achieve the greatest results in terms of customers and dollars. Moreover, your competitors might be putting the brakes on their business growth and might be cutting back on marketing, making it easier for you to woo their customers to your business now. After the early 90s recession, the management consulting firm McKinsey and Company did a study that revealed that companies that commit to business development in down times come out stronger when the economy rebounds. When our economy is in a rebound stage are you going to be ready?

Many businesspeople especially those who run small companies don’t give much thought to their growth process. They just go out there and sell. They scatter their limited resources on too-diverse efforts, producing less-than-optimal results. So what you need to do is focus on how to grow your business.

Key choices:

New products: You add to your lineup of products or services. This can be aimed at your current market and at new markets.
New markets: You offer the same products or services to a wider, more diverse market.
Increase market share: You go after the same market with the same products or services, but you market more aggressively.
Opportunistic: You respond to opportunities as they come along.

Most business owners truth be told grow their businesses opportunistically. The caveat is that doing so can be hit or miss more than a sure thing. Imagine this scenario: You take on a client that was referred by a business associate because you want the income, but it means spending a lot of money developing specific products you can’t sell to anyone else. Not necessarily the best use of your time! Instead, by planning your growth, you have a better chance of succeeding and of getting a better “ROI” return on (your) investment.

Consider this: If you’ve been in business some time, you have ostensibly invested considerable resources and valuable time in your growing your company to this point. You’ve developed or sourced products or services, created marketing materials, established contacts and customers, set up administrative procedures, perhaps hired employees. Financially, the most advantageous way to grow is by getting more business using existing resources, rather than having to spend additional money. Once you start evaluating growth options from this perspective, you’ll probably find it doesn’t make a lot of sense to create a lot of new products (unless, of course, your product is out of date and the markets for it are shrinking). The cost factor can become prohibitive and it takes too much time. And, you still have to market these products to recoup your costs and time in some manner.

Going after new markets for existing products is a good way to leverage your current resources, although you’ll have to invest in marketing. You may even have to create marketing materials especially for the new markets. However, this outlay of cash and time is far more effective and will produce positive results for your present and growing business. If your current market is large enough, if your competitors are less visible in their marketing efforts, and your product or service good enough, the best way to grow may be to just become more determined and consistent in your marketing. That way, you get the most out of your existing assets and assure your business of staying in business while you are simultaneously growing it.

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