According to a recent survey, 26% of small and medium-sized businesses are diversifying to give themselves a competitive edge in the market. In this article we take a look at 10 ways you can grow your business by entering new markets or selling new products and services.
Collaboration is a way of bringing the skills and experience of your business together with those of another complementary business that has a similar customer base to yours.
By joining forces you can raise awareness of your brand with customers in your target market that might never have heard of you.
2. Open a new location
If you've already established a successful business in one location, one option for expansion is to set up shop elsewhere.
This needs to be carefully considered though - ask yourself, is your business successful because of it's current location and could it run without you if you had to spend most of your time setting up elsewhere?
3. Franchise your business
Another option for anyone with a proven business model is franchising. Effectively, your franchisee takes on the risk of setting up in a different location, but you still have to put in the hard work to manage your franchises and it needs to be a business model that can work in multiple locations.
4. License a product
You may have a fantastic business idea, but if you've reached your limit for producing your product on a large scale, one option available is to license it.
This is where another company takes over the responsibility for producing and distributing the product, but they take the lion's share of the profits and pay you royalties.
This isn't for every company, but some entrepreneurs have made successful businesses from licensing such things as designs, games and software, leaving them more time to come up with new products.
5. Sell complementary products or services
If people are already buying from you, could you potentially increase the cost of their purchases and improve customer loyalty by offering them something else they might need.
This could involve selling a related product or service from a third party, which you make commission on, or you could put your skills to use producing something that fills a gap in your market.
6. Enter new markets
This could be selling in a new area, a new country or to a completely different type of customer. Whichever new market you choose to enter, one thing is for sure - you must do your research first!
Don't expect that they will behave just the same as customers in your existing markets. Understand their wants and needs and then develop a relevant product or service that satisfies these.
7. Public procurement
With government targets to award 25% of small public sector contracts to small and medium-sized businesses, there has never been a better time to explore the opportunities available to you in this new market.
UK exports increased in the first quarter of 2012 and many small businesses have got in on the act as the demand for British products improved overseas.
9. Deliver online
The web offers the owners of small and medium-sized businesses a cost-effective way of diversifying.
Options include selling products online to increase your reach to customers in other geographical areas, or taking your existing product and delivering it online, making it available to customers around the world, 24/7.
This is particularly suitable for anyone selling an educational or training product or service.
10. Buy another business
This is a big strategic risk for small businesses because of the amount of time, money and legal complexities usually involved in acquiring another company, but if done successfully it guarantees an increased market share and can create accelerated growth.