According to a recent survey, 26% of small and medium-sized businesses are exploring a variety of strategies to give themselves a competitive edge in the market. In this article we take a look at 11 ways you can grow your business by entering new markets or selling new products and services.
Collaboration is a way of bringing the skills and experience of your business together with those of another complementary business that has a similar customer base to yours.
Forterun Global, a growth focused management consultancy in Lagos, collaborates with lawyers because they have a similar customer base to them.
They offer services that lawyers play a major role in which includes Access to Investment, Market Entry Services, Business Match Making. For these services to succeed, a lawyer needs to be part of the business mix especially for tasks like due diligence, company formation, agreements etc.
By joining forces with a similar business to yours you can raise awareness of your brand with customers in your target market that might never have heard of you. Same with your collaborator.
Open a new location
If you’ve already established a successful business in one location, one option for expansion is to set up shop elsewhere.
Opening a new location in the UK would not be a bad idea at all.
The ease of doing business in the UK is not as strenuous as it is to set up in most countries. In less than 10 minutes you could have your company all set up including your Certificate of Incorporation automatically emailed to you.
It is that simple.
This needs to be carefully considered though – ask yourself, is your business successful because of its current location and could it run without you especially if you had to spend most of your time setting up elsewhere?
You may need to nominate a management consultant or an auditor to manage your company in your absence if you would not be living in the UK.
And it depends on your agreement, the two of you can successfully operate the business in the UK via correspondence provided you keep your part of the agreement.
Remember, the UK is no Nigeria. Once you enter an agreement it is expected that all parties adhere to the terms. Their courts work extremely well and you know what that means.
Examples of successful growth into the UK markets include: GTB, Access Bank, Arik Air, etc.
Franchise your business
Another option for anyone with a proven business model is franchising.
Effectively, your franchisee takes on the risk of setting up in a different location, but you still have to put in the hard work to manage your franchises and it needs to be a business model that can work in multiple locations.
If you are confused, just take time to study other popular franchises that you see scattered all over Nigeria. Good examples include: KFC, Dominos, Coldstone, Mr. Biggs, etc.
License a product
You may have a fantastic business idea, but if you’ve reached your limit for producing your product on a large scale, one option available is to license it.
This is where another company takes over the responsibility for producing and distributing the product, but they take the lion’s share of the profits and pay you royalties.
This isn’t for every company, but some entrepreneurs have made successful businesses from licensing such things as designs, games and software, leaving them more time to come up with new products.
Sell complementary products or services
If people are already buying from you, could you potentially increase the cost of their purchases and improve customer loyalty by offering them something else they might need.
This could involve selling a related product or service from a third party, which you make commission on, or you could put your skills to use producing something that fills a gap in your market. A company that uses this strategy a lot is yoghurt startup – Bia. Bia is located in the food section of Adeniran Ogunsanya Mall in Surulere, Lagos. So next time you visit that Mall. You might go there and see this strategy in action by spending 1,000 naira and learn how they cross sell and up-sell their products to get customers to pay more.
Pharmacies and supermarkets use this strategy to sell magazines. A good example is Medplus.
Enter new markets
This could be selling in a new area, a new country or to a completely different type of customer. Whichever new market you choose to enter, one thing is for sure – you must do your research first!
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Don’t expect that they will behave just the same as customers in your existing markets. Understand their wants and needs and then develop a relevant product or service that satisfies these.
With government targets to award 25% of small public-sector contracts to small and medium-sized businesses, there has never been a better time to explore the opportunities available to you in this new market.
Nigeria exports increased in the 3rd quarter of 2017 and many businesses have got in on the act as the demand for Nigerian products improved overseas.
To find out more about exporting opportunities, spend time on mrpepe.com more, visit the Nigerian Export Promotion Council website or their office to get more information on Exporting.
The web offers the owners of small and medium-sized businesses a cost-effective way of diversifying.
Options include selling products online to increase your reach to customers in other geographical areas, or taking your existing product and delivering it online, making it available to customers around the world, 24/7.
This is particularly suitable for anyone selling an educational or training product or service.
More as we like to scream online these days, we should also remember that more than 85% of the population is still largely offline. This is a market we would need to cater to. To win in this space requires a lot of strategy, ingenuity and execution to succeed.
Most banks in Nigeria get it right but one bank stands out from the pack – Guaranty Trust Bank PLC. You can use GTB as it is often referred as your case study and see how they have successfully transitioned into mobile banking while still having internet banking, and direct sales banking also referred to as retail banking. Each channel doing the same thing and achieving the same purpose of brand awareness and getting clients seamlessly. GTB is so brilliant with its marketing that they have further gone into sponsorships of key industries: Fashion, Food and Media. These are notably seen in the GT Bank Fashion Weekend, GT Bank Food Fair and Ndani TV on YouTube. Each channel earns the bank additional revenue.
Buy another business
This is a big strategic risk for small businesses because of the amount of time, money and legal complexities usually involved in acquiring another company, but if done successfully it guarantees an increased market share and can create accelerated growth.
Merge your business with another business and suddenly you have grown from a small business to a bigger business. This was what most of the banks did during Professor Charles Soludo’s tenure as CBN governor. The banks then either merged or were acquired to meet up the capital base that the Central Bank of Nigeria outlined for them to continue to do business in Nigeria.
Expanding your business can be risky, and all of the strategies above are not without their hazards, so you should carry out a thorough research and plan carefully to spot opportunities plus anticipate and manage risks wherever possible.
Seek advice from professionals and other business owners before making a decision.