How to grow a small business

If you can’t fly, runIf you can’t runwalkIf you can’t walk, crawl, but by all means, keep moving. Martin Luther King Jr.”

Many small businesses struggle with growth. Usually they lack a structured way of pursuing growth opportunities. A common framework which business owners can use to assess the business opportunities before them is known as the Ansoff Matrix.  The matrix was developed by applied mathematician and business manager H, Igor Ansoff and was first published in the Harvard Business Review in 1957. 

This is how we have applied Ansoff’s four strategies of growth in our cottage manufacturing business:

  1. Market Penetration: This strategy focuses on increasing sales of existing products to an existing market. Basically you try to increase your share of an existing market. It may mean increased promotion and distribution efforts. It could also involve reducing prices to increase sales. This is the least risky of all strategies and should be explored first. We have tried this strategy in our cottage manufacturing business by building relationships with wholesalers and encouraging them to purchase more product (Shake enkooge tamarind fruit drink). We have also run a number of promotions in the territories we control.
  2. Product Development: This strategy focuses on introducing new products to an existing market. We have developed a number of new products. Currently we are developing three new products one of which is a line extension of Shake enkooge. We are introducing a ginger flavored tamarind juice in existing markets in eastern Uganda. Business owners must continuously invest in product development and innovation because it’s the bloodline of growth.
  3. Market Development: This strategy focuses on entering a new market using existing products. Basically you open shop in new territory. So if you have a supermarket in Kampala, you open up another one in Jinja. We have done fairly well here. We have opened markets across 20 districts and 100 schools. The team is now quite experienced in identifying the right markets and how to build demand from the ground up.
  4. Diversification: This strategy focuses on entering a new market with the introduction of new products. It this case you offer new products to entirely new markets. This is the most risky of all strategies and you need a good managerial team on board. We have often entered new markets with new products especially at the start. We entered schools with Shake ketchup. We entered restaurants with Shake tomato sauce. We entered trading centers with Shake enkooge.

In conclusion it’s difficult to prosper without growth. A small business can grow by finding new customers and developing new products. You can also simply focus on selling more products to existing customers. 

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