With the stock market setting new highs, you don’t need to be an economist to see that companies of all sizes are doing quite well right now. Combine this with excellent consumer confidence levels and extraordinarily low unemployment numbers, and it makes for a lot of companies with cash on their hands.
It should be a great season for bonuses, but these strong cash positions also create an opportunity for growth. In fact, if you fail to leverage these good times to grow your business, you’ll be in a much weaker position when the next inevitable downturn hits the economy.
Today’s strong economy creates an excellent opportunity to grow your business.
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Create successful growth through diversification
With the knowledge that a downturn will eventually hit, let’s look at diversification as an overall guiding principle when we consider growth strategies. When you diversify, it’s not only growing your business, it’s taking out an insurance policy that protects you for when business slows.
Diversification is important for your personal investment portfolio; it’s important for your business for similar reasons. Here are some ways you can bring diversity to your business model:
- Add new products and services to your catalog
- Target different customer groups
- Buy related companies
- Establish your business in new geographic areas
- Expand overseas
Expand your offerings
I’m sure you’ve asked yourself the question “What else can I sell to my customers?” If you’ve had ideas along these lines, but haven’t yet followed through on them, there probably won’t be a better time than now, so take action.
Also, consider these strategies:
- Create product or service levels, then as time goes on, add attractive features to the higher-priced levels, encouraging customers to upgrade.
- Bundle your products and services. Have you ever watched the TV show American Pickers? When they want to make a purchase from a reluctant seller, they “bundle” a few items together. Bundling items makes deals more attractive to both buyer and seller.
Target untapped consumers
It’s a fact of life that, over the last decade or two, the United States has become much more of a salad bowl than a melting pot, and you can analyze this from a variety of angles. We have a wide range of language and ethnic groups that tend to maintain their identities, and we also have the East and West Coasts versus the “flyover” states. I might also mention that we have an extreme diversity in age cohorts, like the baby boomers, millennials, Gen-Xers, Generation Z, and more to come!
Who are your current typical customers? How can your product or service be tweaked to make inroads into other groups of consumers? Let’s take Spanish-speaking consumers as an example. If you watch any of the sports channels, you’ll notice that even on the English-language broadcasts they promote their Spanish-language channels. They know that although Spanish-speaking sports fans are watching their English broadcasts, if they can move them to their Spanish channel, they will create a more loyal and avid viewer.
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Grow through acquisitions
There are two basic ways to go here: acquire competitors or acquire suppliers. A third strategy might be to acquire companies that are somewhat related to your industry or share a customer base.
A good thing about acquiring one or more of your suppliers (vertical integration) is that your competitors probably use the same suppliers. If your competitors continue to buy from the companies you acquire, you’re getting a bit of their sales. If your competitors move to different suppliers, you’ve made life a little more difficult for them.
Remember the Great Recession? It would have been far worse had it not been for Texas, which continued to grow through much of the Great Recession while every other state was still struggling.
There are major population migration streams between states right now, which strongly impacts certain urban areas through loss of residents and a boom in residents. With apologies to the cities that made the shrinking list, these demographics represent bandwagons to jump on and sinking ships to abandon, at least when you’re devising plans to grow your business.
With the advent of the internet and convenient international shipping, expanding into foreign markets is easier now than it has ever been. A musician friend of mine was telling me recently how he bought a piece of gear from a seller in Australia, and how a friend of his who owns a music store has done a great job selling to overseas buyers.
The benefits are many: Not only can you realize new revenue, you can connect to new talent, discover foreign investment opportunities, boost your reputation, and more.
At some point, you’ll need to deal with various currencies, and fortunately there’s been an explosion in online Forex broker sites. That’s good, but it can also be confusing. It’s smart to start your Forex broker search at an overview site where you can customize filters like the one found on FX-List.com; you’ll save yourself some time.
There’s also a lot of information available from the government to help you get started selling overseas. Check out the Small Business and Entrepreneurship Council and Export.gov. Sometimes the best initial strategy is to partner with an existing foreign company or find a distributor so you can more easily get your foot in the door.
We started this by noting the positive business climate that we’re currently enjoying. If you work hard now to expand, there’s a good chance you can continue to ride this wave for quite some time.