In the competitive world of business, companies must either evolve or die. They have to constantly be on the lookout for ways to grow and raise profits year after year. This is an extremely difficult task which many fail to do successfully. Small businesses that wish to leap forward can find inspiration in other companies that started from scratch and made their way up through strategic decisions. The following are some of the most effective business strategies for business development:
Expanding to Other Markets
You may have excellent products and services but your current market is already at or near saturation. Everyone who needs your offerings has bought them by now so there is little room for growth. However, other markets remain untapped and you can expand your business in these regions for greater revenues. Study the demographics of the population to see if they fit the profile of your target audience. Minimize risk by sticking to well-known areas. Start with a few new branches to test the concept. Later on, you can open your brand to franchising to increase the growth rate.
Pursuing Alternative Channels
The distribution of your products may benefit from the addition of new channels. For example, if you have only been selling through a local retail store, then consider opening an e-commerce website. You could also become a seller in an already established platform to reduce overhead cost and guarantee reliability. This would allow more people to find your products and make their orders. Some of them may even be from different countries and would never have known about you otherwise. Online sellers could do the exact opposite to achieve the same net effect. Pursuing partnerships with several distribution networks is another viable solution.
Creating New Products
A time-tested business development strategy is to create new products in the hope of attracting more customers and re-energize the existing ones. It is always easier to sell to people who are already familiar to you. They know what you bring to the table and you know their taste. Begin with safe bets such as new flavors of existing products to give buyers more options and give them a reason to purchase again. You may eventually take a chance with a totally different product line that is still somehow related to the core brand. You can, for instance, offer food items that go along well with your beverages.
Controlling the Supply Chain
The supply of raw materials is vital for steady production. If you are about to ramp things up with a growth plan, then you may want to consider the acquisition of some of your suppliers. This move will provide you with greater control over the materials that you sorely need to make things work. It will lessen frustrations about exorbitant pricing, late deliveries, and inadequate quantities. A food business, for example, may purchase a small farm. A large restaurant chain may even have its own logistics company. Get the missing pieces of the puzzle to move forward at full speed.
Although the idea of running a family business might appeal to many people, there are considerations that should not be ignored. A shared history does not necessarily translate into shared goals and values. If there are several generations involved, the mix can be even more problematic. Whether it is a small nuclear family or a large group of cousins, aunts and uncles, the family that works together will want to consider the following guidelines, suggestions and cautions.
• Develop Job Descriptions
Even if all the management and staff are family and grandfather is the CEO, it is important to have job descriptions that clearly outline each person’s role, responsibilities and relationship to everyone else. A small business such as a fishing tackle shop might just have task lists for everyone. If it is a larger business with staff other than family, it is even more important to be clear about responsibilities. A simple organization chart will summarize all this information.
• Match Competencies to the Job
Family member or not, the person in any position must be qualified to do the job. If there is no one in the family with the right combination of skills and experience, it is best to recruit externally. There are critical positions such as accounting and IT that have no room for on-the-job training.
• Separate Family Life from the Business
It is difficult to achieve a work/life balance in many organizations and particularly hard in a family business. It is important that all family members commit to leaving business behind when they go home at night. It is probably healthier to stay late at work and resolve an issue than discuss it at the family dinner table.
• Hold Family to a Higher Standard
Whether it seems fair or not, members of the family who own the business are usually watched carefully by other employees. It can be difficult if there are unwarranted comments made about the quality of work, the salaries paid or the time-off taken. However, it is a fact of working life that the family is held to a higher standard than other employees. It is important for family members to support each other without playing favorites and to take appropriate action if it is a family member who is not doing his job.
• Check Goals and Values
A common ancestor and heritage does not automatically ensure shared goals and values. It is important that even a small business has a mission statement, goals and a statement of values that every single employee understands and accepts, whether or not they are family. It is worth taking the time to sit together to develop these positions and make sure everyone is on the same page. Even a simple business plan for the next few years is a reference document for discussion and decisions without arguments.
Above all, each person who is part of the business must be committed to it. There is no room for making assumptions that every child in the family will want to do that work. The younger generation needs to know they have choices both now when they are choosing educational options or even later when they are established in a career elsewhere. They will always be welcome in the family business, but only when they are ready.