Even once you have managed to get your small business on firm financial ground, your work is still not over. In fact, owning a successful small business means constantly tinkering with its operation to keep it current and competitive. Even if your goal is simply to stay small and operate happily in a niche, you need a strategy for constant improvement. If you aren't continuing to change your product for the better, you can quickly become stagnant and lose customers who want the latest, greatest version. Whether your goals are large or small, revisiting your business model regularly is critical.
The concept of continuous improvement has been around for a long time. The Japanese call it "Kaizen." The basic idea is to make the customer experience better and better through an ongoing process that encourages changes and adaptation in the product as a response to what is happening in the market. There are some very formal, complex models used by large businesses for this, such as Six Sigma. As a small business, such models are undoubtedly more than you will ever need, but the concept of continuous improvement is still one that needs to be addressed.
Continuous improvement or growth strategies can be approached in a variety of ways. The key to picking your strategy is to choose the approach that best fits your company's product or service, your strengths and weaknesses as a business owner, and the existing resources that you have. So what is the best way to improve your company? There are a variety of strategies used by small businesses to maintain and broaden their success. The strategies listed here focus on your business product, and are tried and true approaches that are commonly used.
Expand Your Customer Base
One of the most common strategies used by small businesses is appealing to new customers by tweaking the central product in some way to appeal to a different market. For instance, a bookstore might add a book club, an after-school reading program, or a venue for singles meet-ups. Or, a manufacturer of jewelry might add special lines for particular audiences.
Take a look at what your business produces and see how it might appeal to other clientele. Not only does expanding your customer base give you more income, but it also makes you more recession-proof because you have a broader base. The changes do not need to be huge. Start small, and check progress as you go. Take your ideas, try each of them in a small way, and assess the results to determine what works best.
Remodel Your Product
Another strategy for expanding your business is to make changes to the products you are currently offering. Make it in a different color. Add some supplementary features that can be purchased in addition to the product. For example, if you have written a book, add an audio version. Or, add a guarantee or warranty to the product as an extra item that can be purchased.
One of the most common ways to remodel your product is to repackage it with modest improvements, calling it Version 2.0 or something similar. We see that every day on the software we use on our computers. Why can't that apply to your product, too? Another tactic is to have a silver, gold and platinum model, with additional features on the higher end (and higher priced) products. Remodeling a product has similarities to remodeling a house. There are a myriad of approaches. Let your imagination run wild.
License Your Product
Licensing involves selling the rights to your product to a company willing to take on its marketing, advertising, production and distribution. While the company buying the use of the license will get the lion's share of the profits, licensing gives you an opportunity to develop national exposure without expending your own resources.
Make certain your product is patented - or at least patent pending - before looking for licensing partners. Consult with a business attorney who is knowledgeable about licensing before taking any steps. There are many legal ramifications that need to be considered. One of the most famous "oops" events was when Famous Amos lost the use of his own name when he licensed his cookie business.
If you haven't already identified potential partners, research trade shows, online databases and local economic development agencies. A partner who has a broad distribution network can reach a wide range of customers. Other factors to look for in a good licensing partner are having an established reputation for quality and service, and a solid plan to market and advertise your product. Don't be shy about talking to other licensors contracting with your potential partner before signing any documents.
Add to Your Product Line
Look for additional items to offer that are complementary to what you currently sell. For instance, if you have a retail clothing store, add accessories like belts, jewelry and scarves. For a photography business you could add calendars and scrapbooks.
Survey your customers to find out what other items or services might be convenient to have in addition to what they are buying. A survey combined with a free gift can prompt customers to share a wealth of information - and it will have the added advantage of letting them know that you care about what is important to them.
What you are really looking for is an addition that brings added value to what you already offer. Adding a product that can be sold along with your current product can also be cost effective because you won't need to duplicate sales operations. The simplest ideas are often the most effective. Something as easy as personalization of your product in some way for your customers can add to your bottom line and improve their experience.
In the next part, we will focus on location and expansion as ways of improving your business.
