This is the fifth installment in our “Cash Flow 101” series—our ultimate guide to help you understand and manage your business’s cash flow, and prevent future cash flow problems. Need to catch up? You’ll find links to the previous installments in this series at the end of the article.
Congratulations! Now that you’ve solved your cash flow problems, it’s time to figure out how exactly you want to approach growing your business.
Unfortunately, since the needs and strengths of every organization are different, there isn’t really a cookie-cutter approach you can take to ensure your business will expand effectively. As such, it’s important that you do your due diligence prior to investing your capital. After all, you don’t want to find yourself overwhelmed with cash flow problems right after you’ve solved them.
With that in mind, let’s take a look at four ways businesses can grow. Hopefully, you’ll be inspired to find the path that makes the most sense for your specific operation.
Continue growing your business with these 4 tactics
1. Expand to new locations
Whether you’re running a retail shop, a medical practice, a restaurant, or even a business-to-business tech company, you may be able to generate higher profits by expanding your organization to new physical (or even digital) locations.
But, it’s important to remember that you can’t expect to simply open a second location, sit back, and watch your bank account get fatter. Believe it or not, the success of one location doesn’t really have any bearing on the success of another one. So prior to branching out, you need to consider a host of factors.
For starters, before you can think about opening another location, you need to make sure your existing ones are operating like well-oiled machines (i.e., they’re profitable and both customers and employees are happy). You then need to find the right piece of property—geographically or digitally—and make sure you have the right people in place to make it a winner.
2. Develop new products
Starbucks started out as a small local coffee shop. Now, it’s an international juggernaut that sells an eclectic assortment of beverages, as well as pastries, snacks, sandwiches, CDs, stuffed animals, and all sorts of other merchandise.
No matter what your business is selling, chances are you’ll be able to sell at least one more complementary product. For example, if your business is a copywriting agency, you might want to think about hiring a graphic designer so that you can sell infographics, logos, and other visual assets.
Simply put, developing new products—assuming they’re the ones your customers want—will almost assuredly result in new revenue streams. And here’s an easy way to figure out what your customers want: routinely solicit their feedback and suggestions.
3. Look for new partnerships
Being a small business owner can be difficult, particularly when you’re trying to make a go of it on your own. But the good news is that by establishing partnerships with other like-minded businesses, you may very well see your profits increase as your brand is exposed to a whole new community of supporters.
Take a look at Whence, an Ohio-based startup that specializes in same-day delivery in the Columbus area. Whence’s value proposition is simple: In today’s fast-paced world, many consumers simply don’t have the time to head to stores to shop for a variety of reasons (e.g., they spend hours every day chauffeuring their kids around). Still, these folks want to support local businesses—which is exactly where Whence enters the picture.
Customers can use Whence to do their shopping at local stores for them. Whence pays for the items and then delivers them—within 90 minutes, assuming they’re placed between normal business hours. In other words, Whence has built—and grown—its entire business on partnering with local companies.
So how exactly might your business stand to benefit from partnerships? Once you figure that out, it might be time to pursue a few.
4. Launch new marketing campaigns
With more money in your company’s bank account, now is probably as good a time as any to go back to the drawing board and figure out whether your brand stands to benefit from embarking on new marketing campaigns.
From time to time, any brand—no matter how well-known it might be—needs to remind its customers that it’s still relevant.
Case in point: Old Spice, the long-established deodorant and fragrance maker targeted to men. While the company could choose to rest on its laurels—trying to milk its name recognition and track record for all they’re worth—instead, it chooses to invest in clever new marketing campaigns. Check out this commercial, for example. Not only is it pretty hilarious (at least in terms of a commercial produced by a brand that makes fragrances for men), at the time of this writing, it has generated more than 51 million views on YouTube.
It’s true your small business might not have as much cash in the bank as Old Spice (which, by the way, is owned by Proctor & Gamble). But when done correctly, new marketing campaigns could generate interest from potential customers while also reminding existing ones why they should continue to support you brand.
Remember, successfully growing your business won’t happen overnight—it can be a long, tiresome and stressful process. But with the right plans in place, you’ll be able to grow organically. And who knows? Sooner or later, cash flow problems may very well become a distant memory.