What do Simple Sugars, Wicked Good Cupcakes, and Scrub Daddy have in common?
If you have been doing serious research on growing your business, you’ll be familiar with the above names.
If you’re going to start Googling now, let’s save you the time. All of the above companies are small businesses that grew to be million-dollar companies.
There are tons of small businesses around, some successful and others not so much
While there might be tons of successful small businesses around, a very marginal percent of those actually go on to hit the $1 million mark.
If you are looking to hit that milestone, you have come to the right place.
Why should you read this post?
Let’s start with what this post is not about.
This is not one of the mass listicles available online that talk about the same stuff about scaling a business, small or otherwise: improve your marketing, draft a buyer persona, focus on market research,…you get the gist.
These are the universally-accepted facts of managing a business, and in all probability you are already aware of them.
This article talks about real time growth-hacking techniques that have been put together after researching several case studies of successful small businesses and self-made millionaires.
An entrepreneur has a hectic day, and if you are going to invest 10 minutes of your time reading this post, let’s make sure it’s worth it.
Strategic Management Activities for Exponential Growth
Check out these strategic management approaches to growing your business to the $1 million mark.
Make it proprietary
Patents are usually issued on utility, design, process, product composition, and technology. If you deal in any of these areas, it is a highly recommended that you apply for a patent.
Sure, patents involve investment, but the ROI and long-term benefits are paramount.
Key benefits include:
• Competitive Advantage: Your competitors can’t copy you, enabling you to build a strong market position.
• Opportunity to license: Licensing is the fastest and one of the most profitable ways to grow a business. Once you own a patent, you can enter into a licensing deal with an established market leader and upscale your company.
Most of the million- and billion-dollar businesses have patented their know-how, so make sure you consider this option if it applies in any way.
Partnerships and strategic alliances
Non-competing businesses have the same target audience, and co-branding, or cooperating with a non-competing company, is an amazing way to expand your outreach.
Take the example of Starbucks and Barnes & Noble. Nearly every book enthusiast loves a cup of coffee while reading. The two companies saw the opportunity and entered into a one of the most successful strategic partnerships to date.
Many small businesses have not properly leveraged the opportunities available in strategic partnerships.
Re-evaluate your pricing
You must have done your homework about your costs and margins before launching your product. However, those price points are relevant at the introductory stage. This is one of the most common mistakes that small business owners make – keeping their revenue model stagnant for a prolonged period of time.
Pricing is a whole new ball game once you enter the phase of scaling your business. You see, when you priced your products at the introductory phase, it was done on the basis of certain hypothesis about the market, your stakeholders, and your consumers.
Once you have entered the growth phase, you have a better idea about the industry. Check which assumptions failed. Reevaluate your revenue model and see how you can bring costs down.
For example, if you are in the app software business, think about whether you need to switch from a subscription-based model to advertisement model.
If you are upscaling, you should be increasing your profit margins and putting maximum money back into the business.
Don’t grow too fast
Now this sounds contradictory, right? After all, this article is about growing your business.
Well, you might be surprised to learn that about two-thirds of the fastest growing companies fail. Why?
Business 101: Scaling up is not about short-term growth as much as it is about sustainable growth.
An example: An apparel company that was killing it through online sales went out of business within two years because they prematurely tried to enter the retail space.
Retailing drives down your profit margins and increases your inventory cost massively as compared to online sales. The company just was not ready for this and eventually had to bear the brunt of growing at an unsuitable pace.
Grow at a pace that is suitable for your long-term sustainability.
Find the purple squirrel
Purple squirrel is a term used by recruiters to describe the candidate who is the perfect fit for the job. Even with stellar planning, you might fail to scale your business if you do not have a strong team to execute it.
A cardinal mistake of small business is not investing enough time in hiring the right candidate. Do not hire on the basis of just a resume and an interview. Determine if your future employees are truly passionate about what you are offering them.
A great way of finding the purple squirrel for your business is to switch your recruiting process from a “job interview” to a “job audition.”
A job audition is a situation in which you give candidates a real-time task instead of just relying on a conversation about strengths, weakness, past work experience, etc. Does their way of working resonate with you? Do they look excited about the task? How much are they willing to learn?
A job audition will effectively help you find answers to these questions and eventually lead you to the purple squirrel for your company.
Find your 15 minutes of fame
If you are an entrepreneur or even a business enthusiast, you’re familiar with the entrepreneurial reality show Shark Tank.
But did you know that just appearing on the show (regardless of whether you bag an investment or not) can boost your exposure exponentially?
According to the ABC network, a single Shark Tank appearance is equal to 9 million dollars’ worth of marketing exposure!
This is what 15 minutes of fame can do for your business. This implies that if you can find the right promotional space, you might hit the million dollar mark sooner than anticipated!
Now, those coveted 15 minutes are not limited to just prime time shows like Shark Tank or Dragon’s Den.
You can exploit various avenues. Apply for business awards, participate in global or national business forums, go to trade-shows, and invest in viral marketing.
Don’t limit your marketing to only social media posts and sales calls from your back office.
Put yourself out there and see for yourself how much it impacts your business.
The secret sauce of upscaling a business is strategy, innovation, and loads of hustling.
If you are prepared to do this, the above tips will go a long way in helping you sustainably grow your small business.
Our guest author Abhyank Srinet is a passionate digital entrepreneur who holds a Masters in Management degree from ESCP Europe. He started his first company while studying at ESCP and managed to scale it up by 400% in just two years. Srinet is the founder of MiM-Insider, a one-of-a-kind business school portal with cutting edge profile evaluation and school selection algorithms.