Recession fears are looming, and millions of Americans are searching for ways to make their dollars stretch. Some have turned to second jobs – others are considered side hustles and gig work. There’s also the group thinking about making the leap to entrepreneurship. And that may not be such a bad idea.
Several industries are booming, and with the right strategy, you could enter them and start making an impact. And if you already own a small business, you, too, can capitalize on these opportunities.
Whether you’re planning to start a business soon or are looking to expand operations, this guide provides guidance on how to move forward. But first, it dives into the state of small businesses in the U.S., why building a small business takes time and common challenges small business owners face.
The State of Small Businesses in the U.S.
Some useful statistics to be aware of, according to Forbes:
- There are 33.2 million small businesses nationwide.
- Approximately 99.9 percent of companies operating in the U.S. are small businesses.
- In 2023, more than 180,000 small businesses opened than closed.
Growing a Small Business Takes Time
It’s no secret. If you’ve been in business for a while, you likely know that growing a small business takes time. In fact, it’s more of a marathon than a quick sprint, and the road to success can be full of twists and turns.
But why is the journey so lengthy and, at times, challenging? There’s a laundry list of reasons this can be, but the most common ones include the following:
- Lack of knowledge: Companies that thrive generally have subject-matter experts on their teams. But this level of expertise isn’t built overnight. It’s gained through trial and error, along with the willingness of these experts to immerse themselves into acquiring the proper knowledge and skills needed to excel in the industry.
- Limited resources: Business growth generally takes time and money. A lack of the latter means you may need to invest even more sweat equity to really get your company off the ground and start generating sales.
- Stiff competition: If you’re starting out, you’ll have to spend some time identifying ways to be creative with your branding and marketing.
Common Challenges of Growing a Small Business
Growing a small business can be a lengthy process. But it can also be riddled with challenges. Again, it’s impossible to include all of them here, but some prevalent challenges include the following:
- Lack of funding: As mentioned above, limited resources could mean passing up growth and expansion opportunities.
- Oversaturated industries: Operating in a crowded sector makes it harder for your company to stand out in a pool of competitors.
- Cash flow challenges: A downturn in business could lead to cash flow problems that make it difficult to cover operating expenses or focus on expansion.
- Staffing issues: The wrong team members can make your role as a small business owner extremely difficult.
- Unrealistic expectations: Starting a business with inflated expectations can lead to frustrations that could hinder growth in the short term or until you come up with a viable plan.
- Burnout: This challenge is frequently overlooked but should be considered. Growing your company can be an exciting journey. That said, it’s essential to practice self-care to avoid burnout or what’s often referred to as entrepreneurial exhaustion. Otherwise, two steps forward could result in ten steps backward if you stretch yourself and your team too thin.
This list is not all-inclusive but sheds light on some common reasons businesses struggle to grow. And in some instances, small business owners will reach a point where they have to pivot or completely shut the doors to their business. But the latter doesn’t have to be you.
Below are 10 tactics worth considering to grow your small business. These strategies are tried and tested and could be what you need to make the progress you’ve been hoping for in your company.
10 Proven Strategies for Growing a Small Business
1. Hire the Right People
When you’re just starting out, it’s not unusual to want to keep costs low. After all, you need to start bringing in sales, covering operating expenses and turning a profit to stay afloat before trying to expand. And you may choose to operate as a one-person show for some time. However, you’ll need to start thinking about building a team if you want to grow your small business.
It’s practically impossible to scale without having the right people on staff to help bring the visions you have for your company to life. Before embarking on a hiring spree, though, take some time to draft up an organizational chart and outline the role each employee will play in your company.
What are their job duties and responsibilities? Will they manage others? What are the benchmarks they’ll need to meet? How much will they be compensated? These are just a few questions to ponder. Feel free to add to the list as you see fit.
Once you’ve established who you’ll need on the team and have the funding you need to cover payroll, the next step is the hiring process. Again, you have the option to hire full-time employees, part-time employees or independent contractors. The latter could be ideal if funds are tight and you’d prefer to steer clear of long-term hiring commitments should financial difficulties unexpectedly arise.
Either way, your new team should be hardworking and committed to helping your company soar to new heights. However, be careful to avoid “yes men” or team members who are afraid to think outside of the box.
2. Make a Plan (and a Backup Plan)
You have a vision for your small business, but you don’t know how you’re going to get there. Hence, the importance of a plan (and a backup plan just in case). Or maybe you already have a plan in place but haven’t yet ironed out all the details.
Either way, now’s the time to return to the drawing board and map out business goals. You should also note the steps it’ll take to meet each of your objectives and create milestones to track progress. Be sure to include the talent and resources you’ll need at each stage as well.
A backup plan is equally essential. Sometimes, life happens, and things don’t always go as planned. But you’ll have a plan b to fall back on, so you won’t necessarily lose momentum when trying to grow your business. Instead, you’ll simply take an alternate route.
3. Study Your Competition
Mimicking the competition isn’t what’s being suggested here. That said, researching your competitors to see what they’re doing right in their business can help you grow yours. First, pay attention to how they’re addressing the pain points of individuals or entities in your target market. Then, compare it to your approach to identify ways you can provide an exceptional experience that rivals or exceeds that of your competitors.
The idea is to not completely overhaul how you do business. Instead, focus on what you do right, optimize these processes, and eliminate what’s not working. And if there’s a void your competitors aren’t filling, take advantage of the opportunity to address it and grow your company.
4. Optimize Your Brand
Brand awareness is a vital component to growing your business in practically every industry. It helps bring the visibility needed to attract new customers, earn their business and retain them as long-term patrons or clients.
Optimizing your brand also helps build credibility and trust, which can improve customer loyalty. You’ll also stand out from the sea of competitors because consumers will know why you are the better choice. And it could potentially be easier to expand into new markets since you’ve already established credibility in the markets you currently serve.
5. Strengthen Your Strengths
What does your company do well? This is such a vague question that it could produce a load of responses. So, consider creating a SWOT analysis to lend a helping hand.
Grab a notebook or open a spreadsheet and create a chart with four columns – strengths (S), weaknesses (W), opportunities (O) and threats (T). Start by filling out the first column to get the much-needed answers to these questions, and brainstorm ways you can improve the items listed in this category.
You can also take it a step further by populating the other three columns in one sitting if time permits. Doing so provides insight into opportunities you’re leaving on the table and should try to capitalize on sooner than later. You’ll also know what weaknesses you need to focus on eliminating, along with threats that should be minimized promptly to protect your company.
6. Reduce Your Risks (and Take Calculated Ones)
As the old adage goes, “The greater the risk, the greater the reward.” Yet, the thought of taking risks in your business could make you cringe, especially if there are cash flow issues or limited reserves. But in order for you to grow your business, it’s vital to take calculated risks.
There are no guarantees you won’t encounter difficulties or short-term failures along the way. Still, you must keep going until you find the path that works for you.
A calculated risk could be in the form of hiring more employees, renting office space, expanding your line of services or products or purchasing a warehouse to increase production levels. That said, you want to carefully evaluate the benefits and drawbacks of the moves you’re considering and identify ways to maximize your chances of success.
It’s also important to invest in the right form of business insurance to help minimize liability. Plus, you’ll have peace of mind knowing you’re protected as you take some of these calculated risks.
7. Identify New Opportunities and Capitalize on Them
Constant growth isn’t a surefire result of working hard in your business. Still, that doesn’t mean you should give up on searching for better opportunities. You should actually do the opposite to give yourself the best shot at success as a small business owner.
Even in times when business is slow or somewhat stagnant, continue brainstorming. It can be challenging when the fear of having to shut your doors or scale back tremendously is present. But remember why you started and understand that continuously pursuing your business goals in spite of downturns could yield new opportunities. And when they do arise, you want to be prepared to capitalize on them.
8. Create Strong Connections and Partnerships
You can forge strong connections and partnerships by participating in networking events. These gatherings are opportunities to meet other like-minded entrepreneurs doing great things in their companies. Consider volunteering to serve on a panel or hosting a breakout session. You’ll bring added visibility to your company and possibly attract more customers.
There’s also a chance a future collaborator could be present that could help expand your company. As mentioned earlier, multiple individuals or entities working toward the same mission can foster rapid expansion. And by forming strategic partnerships, you may find yourself one step closer to building the business of your dreams.
9. Adapt and Think Ahead
The old way of doing things in your business could still work for you. But at some point, you’ll need to adapt to keep your company from going under. Hence, the importance of innovation is to keep current with industry trends and continue to meet and exceed the needs of your customers. Adapting to the times could also attract prospects in your client market and make it easy to convert them to loyal customers.
You should also be thinking ahead to what could be next for your business. Market conditions change daily, and adapting is crucial for continued success and the growth you’re seeking. Ask yourself the following questions: “What can be done to improve the way you do business?” “How can you better serve your customers?” What can your company do better than the competition?”
10. Be Smart About Accessing Capital
For most small business owners, funding is the difference between capitalizing on growth opportunities or sitting on the sidelines. But, if you’ve always done the latter, it’s time to consider positioning your company to qualify for business financing.
Loans can be a scary thing for small business owners, though. It means one more item has been added to the list of expenses to manage. But instead of viewing business funding as a burden, look at it as an opportunity to propel your company forward.
Consider speaking with business lenders to learn more about the different types of financing your company could be eligible for. The U.S. Small Business Administration’s (SBA) website is another great resource for exploring commercial funding options.
But before you access capital, assess your company’s financial health to determine how much of a business loan you can afford. Also, consult with the lender to get loan quotes. That way, you’ll know exactly what to expect and can make adjustments to your desired funding amount before applying.
Consider contacting an online business lender like CAN Capital to simplify the application and approval process. They offer working capital loans up to $1 million that are suitable to fund the operational costs you need to grow your business. Visit their simple application page, where they will collect the necessary information to do a soft credit pull (not to impact your credit) and speed approvals so you can get your business loan funds as fast as the next day.