As a small business owner, have you ever wanted your business to reach new heights? If the answer is yes, then this article is for you. The transition from a small family business to a large enterprise takes time as well as making the right moves. There are several strategies that are generally successful, but your mileage may vary. What works for someone else may not work for you, or vice versa. In the end, it’s the business climate that will dictate what works and what doesn’t. Here are some of these strategies you may want to consider.
This concept involves selecting a particular aspect of the entire marketplace and organizing your business effort around it. You have to ask yourself who your customers are, who aren’t, and which part of the market will produce the most profit. The secret behind many big businesses is that they are specialized and focused on one sector of the market where they rule supreme. Some struggling businesses are unwilling to let go of a potential market segment, but it’s this reluctance that prevents them from becoming larger enterprises. Think of Coca-Cola or Red Bull for instance. Who do they serve? Who are their target customers? What do they support?
If your business aspirations lean more towards increasing the volume of your company, you must be aware that managing a big business is by far much more complex. Multiple facilities, layered supply and distribution chains, and massive equipment involve many variables and levers to pull. Remember that if you want to know how to setup a company you will need to constantly make checklists. Make a list of problems to be solved or goals to achieve. In order for your business to grow, you have to focus on the essentials.
An often heard complaint from small company owners is that they cannot create the business relationships the same way the big players do. The truth is your small business usually won’t have funds to pay for someone’s partnership. So what can you do instead? You can negotiate partnerships with other companies by giving them a share of your profit. For example, let’s say you have developed a great product but lack a manufacturing facility and a distribution channel. Negotiate a partnership with a factory that can produce your product and a vendor to distribute it. You can save money by paying your partners a percentage of each sale.
Bear in mind that most big businesses have grown through mergers and acquisitions. Although we tend to associate acquisitions with big companies as part of a “big fish eat little fish” paradigm, the fact that your company is small doesn’t mean you should exclude takeovers as a means of expanding your business. If you know what you are doing, acquisitions can increase your profit on a large scale, but bad purchases aren’t just bad investment – they can even harm the mother company. Focus on companies that your acquisition of will improve. Even better, set up a checklist of positive characteristics you’re looking for and then base your acquisitions on it.