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Some of the biggest conglomerates today started small, such as
, Hewlett-Packard, Domino's Pizza, to name a few.
However, these businesses grew and succeeded with the right
product offerings, marketing savvy and solid management skills.
With the right elements and luck, your small business today
might just become the powerhouse of tomorrow's business.
How can you transform your business from a home-based
endeavor to a multi-million enterprise? The reason for the
phenomenal success of many firms hinges on common elements that
reveal the secrets of business growth.
1. Offer products or services that can be marketed on a large
scale.
Choose a business that has the potential to expand and
could provide you with a wide reach of potential customers. Some
business ventures, particularly home businesses, have inherently
limited growth opportunities. Businesses such as bookkeeping,
landscaping or secretarial services, usually have too limited a
market to attain million-dollar sales. A donut or coffee shop
is geographically limited and can attract only people in the
neighborhood. Significant growth for this kind of business lies
in your ability to market the business for franchising. A
mail-order house, on the other hand, can reasonably target
people throughout the entire country and beyond.
If you want to earn seven-figure revenues, your business
needs to reach a large customer base, and you can achieve this
through marketing nationally or internationally. Marketing your
business in your county or municipality alone may not support
the kind of expansion that you are planning for your business.
If you cannot market on a national (or at least regional) level,
though, the best strategy is to either market in metropolitan
areas of major cities or go online and sell on the Internet.
2. Provide something different from what's already in the
marketplace.
You need to look for ways to distinguish your
product or service from others who are already in business. You
cannot expect to sustain significant growth when your products
or services are hardly distinguishable from the competition.
Being unique however does not mean that no one else is providing
the same product or service; it can mean that no one else is
providing the product or service in the same way that you intend
to provide it. It can also mean that you are the only provider
of the product or service in your locality. You can create
differences simply by finding better ways of serving selective
segments of a market. This sometimes is accomplished just by
adding a new twist to something old, or by marketing more
creatively.
3. Target specific markets that can be reached through
affordable means.
The distribution method that you choose
significantly affects both your costs and your revenues. Which
marketing options will reach the most customers at the lowest
cost? Small businesses inherently have practical limitations on
the ways they can reach markets. The key questions that you need
to consider in deciding your distribution channels are financial
resources and cost effectiveness. What can you afford? What will
give you the most return for your buck? Advertising in major
publications, online portals, or buying a spot during the Super
Bowl; and establishing a national sales force are beyond the
reach of most home businesses. A small enterprise need to work
harder at focusing its limited resources of time and money. In
choosing the best distribution channel for your business, you
need to factor in the costs and time involved in entering the
channels, your experience with the channels, and which channels
best reflect the product positioning that you believe is crucial
to your success.
4. Generate volume revenues from each customer.
Look for
businesses where you will have a lot of repeat customers or
where people will need to keep buying supplies or products from
you. Small and home-based businesses cannot expect to earn
million-dollar sales from one-shot selling or low-priced
products or services. Do the math: how many sales do you need to
earn a million dollars if you are doing a single sale of ten or
twenty dollars each? A must for a growth-oriented business is to
either create products or services with repeat sales potential
or have high unit-selling prices.
5. Drive the business with new products or services.
Product
development is oftentimes a hit and miss process for small
businesses. New products are introduced only as a reaction to
competitive challenges or because of the development of
proprietary technology or patents. However, traditional
management theory provides that every product, idea or concept
has a life cycle: no matter how spectacular a product maybe,
sales will almost always start to fall off eventually. You need
to be able to identify whether the demand for your product or
service is increasing, leveling off or declining. Determine if
there are opportunities for your company's products to be
refreshed in the marketplace by being repositioned, improved or
brought out in a new size, flavor or package. Or if the old
product has outlived its usefulness, you need to be able to pick
up the slack by introducing a new product in the market.
6. Continuously readjust to the marketplace.
Time will bring
new opportunities as well as changes likely to affect what
business is already doing. Technology also moves quickly, that
some products see some shorter life cycles. Shifting gears as
demand moves up or down is critical to continued growth. You
need to be flexible in adjusting your marketing strategy and
product offerings.
7. Grow at a controlled pace and keep failures manageable.
One rule of thumb in business: there is never any certainty.
While market research oftentimes can provide you with a 'gauge'
as to market acceptance, that "can't miss" idea
sometimes does. New products or services may not take off right
away and possibly not at all. Make sure that you are still able
to manage the growth of your business. Experienced entrepreneurs
enter new markets in stages and never put themselves in a
position where one failure jeopardizes everything that's been
built over the years.
8. Hone management skills.
Most small enterprises fail within
the first three years of operation due to business and
managerial incompetence on the part of the entrepreneur. To
transform yourself from kitchen-table entrepreneurs into
professional corporate managers, you need to learn how to
operate in a complex, multidimensional environment. Learning
new business skills should be a constant process, particularly
in the areas of marketing, product development, human resource
management, and financial management. No matter how skilled you
are at creating a product, providing a service, or marketing
your wares, the money you earn will slip out of your fingers if
you do not know how to efficiently collect it, keep track of it,
save it or spend it wisely.
About the Author:
George Rodriguez is a writer
for Power HomeBiz Guides.
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