Small and medium-sized enterprises (SMEs) are often the most essential cogs in economies worldwide, playing a vital role in fostering economic growth and creating jobs. In the Philippines, SMEs, totaling 96,464 establishments (9%), are essential innovation contributors.
However, overcoming economic turbulence, such as the recent global pandemic, highlights the importance of robust growth strategies and business ideas for SME continuity and success. Whether you’re a seasoned entrepreneur or an aspiring business owner, understanding and implementing tailored growth strategies can make all the difference.
4 Key Small Business Growth Strategies
Innovative approaches using the latest tools and trends are essential for business growth. Here are four key strategies effective for developing small businesses, no matter the model.
1. Adding new methods of distribution
This involves expanding the ways your products or services reach customers. Start by researching emerging trends and consumer preferences, then explore options like e-commerce platforms, partnerships with online retailers, or even setting up your own distribution channels.
For instance, a local bakery may boost sales by partnering with food delivery apps or implementing a click-and-collect service. Businesses can increase customer sustainability and tap into new markets by diversifying their distribution channels.
2. Virtualizing the business
You must embrace digital transformation, especially in today’s increasingly online world. Virtualizing your business entails leveraging technology to streamline operations, enhance customer experience, and facilitate remote work.
Digitize repetitive and simpler processes, including inventory management, customer service, and marketing. Implementing cloud-based software, e-commerce platforms, and collaboration tools can also improve efficiency and scalability while lowering operation costs.
For example, a consultancy firm can reduce overhead costs and reach a wider audience by offering virtual consultation and workshop services.
3. Offering new products
Diversifying your service or product offerings can attract new customers and increase revenue streams. Research your or adjacent sectors’ landscape to identify gaps or emerging trends before developing new products or services that align with your research and target audience.
Consider providing complementary products, expanding into related niches, or introducing premium versions of existing offerings. Cross-selling or upselling your goods can be highly profitable and, therefore, conducive to growth.
Let’s say a software company may introduce add-on features or modules to cater to different customer needs. Businesses can stay competitive by continuously innovating and adapting to evolving consumer demands.
4. Buying new businesses
Acquiring existing businesses can provide instant growth opportunities, access to new markets, and expanded capabilities. There’s a reason why large organizations often purchase companies in similar fields. It allows them to gain access to an established infrastructure and customer base while eliminating competition and consolidating market share.
Identify potential acquisition targets that complement your existing business or align with your strategic goals. Conduct thorough due diligence to assess the target company. Negotiate terms and structure the deal to minimize risks and maximize value.
For one, a retail chain might acquire a smaller competitor to enter new geographical areas or expand its market share. Strategic acquisitions can accelerate growth and strengthen your competitive position in the market.
Tailored Growth Strategies for Specific Industries
Each sector possesses unique challenges, opportunities, and consumer behaviors. Understanding the intricacies of your industry and implementing targeted approaches can maximize your growth potential and help you achieve sustainable success.
Retail
As a business that sells goods or services directly to consumers, retail is a popular industry that relies heavily on evolving consumer preferences and market trends.
| Challenges | High competition Low margins Changing consumer behavior Inventory management Logistics |
| Opportunities | Growing e-commerce market Increasing disposable income Rising demand for convenience and variety Social media influence |
1. Leverage data analytics
Harness the power of data to gain insights into consumer market trends, preferences, and behavior by collecting data from all possible sources, such as website analytics, sales transactions, and social media interactions. The more, the better.
Use tools to analyze this data and identify patterns and opportunities, such as adjusting inventory levels based on bestselling products.
With this information, you can conduct more informed strategies such as optimizing pricing, tailoring market campaigns, and personalization. Additionally, you can use customer purchase history for targeted promotions or recommendations to increase customer engagement and sales.
2. Adopt omnichannel retailing
Omnichannel retailing integrates multiple sales channels, such as physical stores, mobile apps, e-commerce websites, and social media platforms, to provide a unified shopping experience. If your customer journey is a funnel, you can picture it as widening the funnel to catch as many prospective buyers as possible.
Invest in technology and infrastructure that enables synchronization across channels, like inventory management systems and customer relationship (CRM) software. Implement consistent messaging and branding across all channels to maintain a cohesive brand identity. The goal is to have no difference in quality and features across your channels.
3. Create customer loyalty programs
Customer loyalty programs incentivize repeat purchases, increase customer retention, and create brand advocates.
Start by designing a reward structure that offers tangible benefits, such as discounts, to incentivize loyalty. Implement a user-friendly loyalty platform allowing customers to track and redeem their rewards across all channels easily.
Distribution
Distribution is the business of transporting and delivering goods or services, such as food, beverages, or pharmaceuticals, from producers to consumers. Here, efficiency and reliability are paramount.
| Challenges | High operational costs Low visibility Complex regulations Customer satisfaction |
| Opportunities | Growing demand for fast and reliable delivery Increasing e-commerce penetration Rising need for cold chain logistics Emerging technologies |
1. Implement inventory management software
This involves adopting advanced software solutions to streamline inventory tracking and management processes. It minimizes stockouts, improves order accuracy, and increases operational efficiency.
Evaluate your current inventory management practices and identify areas for improvement. Choose a suitable inventory management system that aligns with your business needs and integrates with existing processes. Implement the software across your distribution channels to gain real-time visibility into locations, stock levels, and goods movement.
2. Use GPS and RFID technology
Leveraging GPS and RFID technology enables distribution companies to monitor and optimize their delivery fleet’s routes, vehicles, and drivers.
Start by equipping vehicles with GPS tracking devices and RFID tags to track shipments and assets in transit accurately. Utilize fleet management software to analyze route data and optimize delivery schedules. Doing so can improve delivery speed, reduce transportation costs, and enhance overall customer satisfaction.
3. Partner with local or regional distributors
This presents an opportunity to expand market reach, reduce transportation costs, and enhance customer service.
Research potential distribution partners with established networks and expertise in target markets. Negotiate mutually beneficial agreements that outline roles, responsibilities, and performance metrics.
Engineering
Engineering is the business of applying scientific and technical knowledge to design, build, and maintain structures, systems, or processes, such as bridges, buildings, or machines. With this, precision and innovation are paramount in the industry.
| Challenges | High competition Low profitability Complex projects Skilled labor shortage |
| Opportunities | Growing infrastructure development Increasing demand for green and smart solutions Rising adoption of digital transformation Emerging markets |
1. Use Building Information Modeling (BIM) software
Incorporating BIM software revolutionizes the engineering process by enabling the creation and management of comprehensive digital representations of structures. Invest in one that can fulfill your company’s needs and capabilities. Train your team on effectively utilizing the software for design collaboration, clash detection, and project visualization tasks.
Companies leveraging BIM technology streamline workflows, enhance collaboration, and deliver projects more efficiently and accurately.
2. Apply lean principles
You should implement lean principles in engineering processes to eliminate waste, improve quality, and increase efficiency.
Begin by thoroughly analyzing your current processes to identify inefficiencies and areas for improvement. Implement lean tools and techniques like value stream mapping, S, and Kanban to streamline workflows, reduce lead times, and optimize resource utilization.
3. Diversify service offerings
Providing services beyond traditional design and construction can open new revenue streams and cater to broader client needs.
Conduct market research to identify areas of opportunity and client demands for additional services such as consulting, maintenance, and training. Develop expertise and capabilities in these areas through training, hiring specialized talent, or partnering with external experts.
Construction
Craftsmanship meets creativity in the construction industry, being the business of building, repairing, or renovating infrastructures and other structures, such as roads, dams, or pipelines.
| Challenges | High risk Low productivity Tight deadlines Safety issues |
| Opportunities | Growing population and urbanization Increasing public and private investments Rising demand for sustainable and resilient construction Emerging technologies |
1. Adopt modular construction
Embracing modular construction techniques involves prefabricating standardized components in a factory setting and assembling them onsite. This approach offers significant advantages regarding time, cost, and waste reduction.
Be sure to evaluate your project portfolio and identify opportunities for standardization. Invest in the necessary infrastructure and equipment for off-site fabrication and transportation to gain a competitive edge through improved cost efficiency and quality control.
2. Utilize drones and sensors
Leveraging drones and sensors for real-time data collection and analysis on building sites enhances planning, monitoring, and safety protocols.
Incorporate drones with cameras, LiDAR, and thermal imaging sensors into your project workflows. Implement sensor technology for monitoring factors such as temperature, humidity, and structural integrity.
Drones can conduct aerial surveys for site planning and progress tracking, while sensors embedded in building materials provide early warnings for potential safety hazards. Together, they improve project efficiency, mitigate risks, and ensure compliance with regulatory standards for construction firms.
3. Implement sustainable building practices
Sustainable building practices involve integrating eco-friendly materials, energy-efficient designs, and green construction methods into projects. These practices meet the growing demand for environmentally responsible structures.
Start by educating your team on sustainable construction principles and exploring certifications such as Leadership in Energy and Environmental Design (LEED). Adopt sustainable building materials and technologies like recycled materials, solar panels, and passive heating/cooling systems.
Prioritizing sustainability helps construction companies attract environmentally conscious clients, comply with regulations, and contribute to a greener future while also gaining a competitive edge.
Growth Across Diverse Industries
Businesses can achieve success regardless of their sector. However, it takes strategic foresight and meticulous business development planning to overcome challenges, seize opportunities, and realize an enterprise’s full potential.
Another necessary fuel for business growth is having adequate financing. Zenith Capital offers tailored financing solutions to support you as you implement these strategic initiatives. Our quick loans can provide the capital you need to succeed.
Contact us for a hassle-free and easy business loan in the Philippines, or apply here to get started today!
Rizza Templonuevo is not just an accomplished finance professional and business leader, but also a loving wife and a dedicated mother of two. With a passion for helping businesses grow and thrive, she brings her extensive knowledge and expertise as Vice President of Zenith Capital Credit Group Corporation to help countless SMEs and corporations across the Philippines access the financing they need to succeed.
When she’s not busy with work, Rizza enjoys immersing herself in the worlds of fashion and social events, as well as traveling to new and exciting places.
