Your side business can be a fun profitable project that you do during weekends, but what if you want more?
How to Quickly Scale Your Side Business: With 5 Growth Strategies
For some people, a side business is just another step towards quitting their job and becoming a full-time entrepreneur. If you find that this goal appeals to you, you need to start planning on how you can scale your microbusiness into a much larger venture.
This often means growing your customer base, making more sales, increasing profits, or growing the popularity of your brand. These goals are usually related. After all, as your customer base grows larger, you are likely to make more sales.
Regardless of how and why you want to grow your side business, the path remains the same. You need to evaluate whether your business is ready, set goals, and choose how you’ll reach those goals. This guide will show you how to leverage five great business growth strategies.
Are You Ready for Business Growth?
Before you decide to scale up your side business, you need to know the answers to crucial questions about your business. Note that most of these questions require that you’ve done the math on some essential metrics in your side business—which you should do anyway, whether you’re scaling or not. A previous tutorial in this series can walk you through the process of calculating your results:
Once you have evaluated your business metrics, here are the things you have to consider before you scale:
- What are your quantifiable goals for the next stage of your business? List one or two goals you want to reach for the next stage of your business. This could be the number of sales, orders, new customers, or leads. You could also aim for a minimum monthly profit goal.
- Do you have enough leads and sales? You know you’re ready to scale when you’re consistently hitting your sales targets and you regularly get inquiries from potential customers. It’s an even better sign if, every time you advertise or expand your marketing efforts, you get additional leads for your efforts.
- Do enough of your leads convert into sales? Your conversion rate—the percentage of your leads that convert into paying customers—is one of the most important metrics for growing your business. If you’re not satisfied with your conversion rate, perhaps work on optimizing it first before scaling.
- Is your business profitable? Considering the costs of running your business, make sure that you are making enough money to justify scaling. This is because your expenses are likely to grow as your business does. For example, even if you received dozens of orders in the past month, it might be risky to scale if you’re only breaking even. The higher your profits, the better your chances of scaling up successfully.
- Do you have the budget to commit to scaling? Relevant to your profitability is your budgeting. Reaching the next stage of your business might mean consistently committing a higher amount to marketing, inventory, or other overhead costs. Can you afford to pay for these additional expenses regularly, or will your profits get dangerously low after a few months?
- Do you have enough time or energy to commit to scaling? Similar to expenses, your time and energy commitment are likely to increase as you grow your business. Will you be able to commit more of your free time to fulfill more orders, provide support for more customers, or try new marketing channels? If not, can you afford to hire help?
After you scrutinize your business’ growth capabilities with the questions above, you’ll know which areas you need to improve on before you scale. But if you find that you and your side business can more than handle the growth, then there are some great, time-tested strategies you can use to reach your new goals. Let’s dig into them:
Try These 5 Killer Side Business Growth Strategies
1. Seek Out Premium Customers
Aim for more high-end customers than your current clientele. These could be clients with bigger budgets or clients that have more of a visibility or influence among your target audience.
The benefits of this is two-fold: (1) they can spend more money and (2) give you endorsements or reviews with higher impact. Keep in mind, getting reviews from high-profile customers can boost your trustworthiness and credibility among new customers.
For example, if you provide product photography services to small businesses, you can target more profitable industries. If you mostly take photos of handicrafts, consider taking photos of furniture from high-end furniture shops in your area. You can also target larger companies with bigger photography budgets. Rather than just taking photos for sole proprietorships, seek out companies with more than twenty employees or companies that are better known in your city.
If you’re selling products, the idea is similar. Given your current clientele, who can you serve that has a bigger budget and higher profile than the group you’re currently reaching? What relevant products do they buy from similar businesses, and what are the price points of those products compared to yours? Consider these questions and see if there are adjustments you can make in your target market. You can even do a competitive analysis of similar businesses that target these higher-end clients you want to reach.
Here are some other guides that can help you target these premium clients:
FreelanceHow to Identify Profitable Clients: A Step-by-Step GuideCeline Roque
FreelanceHow to Win Local Clients for Your Freelance BusinessAndrew Blackman
2. Focus on Top Performers
At this point in your side business, you’ll be able to tell which of your products are big sellers and which ones aren’t as popular. You’ll increase your chances of successfully scaling your business if you focus more on your bestsellers. Create a plan that will help you do any of the following:
- Direct most of your marketing efforts and budget to top performing products, rather than equally marketing all your products or marketing your business in general.
- Increase your profit margins for your best selling products, either through raising your prices, lowering expenses, or offering add-ons.
- Develop value adding products or services that can be bundled with your top sellers (see “Release New Products or Services” below for more details on how to do this.)
- Drop your poorly performing products, since they’ll be taking away your budget and time from better performing products.
While you’re running your business on the side, reinvesting in winners will allow you to maximize the returns you’re getting from the time and money you put into your business. This might seem drastic, especially if you’re emotionally attached to the products and services you provide, but you can always reintroduce your less successful offers when you have ample resources to invest in them again.
3. Use Highly Targeted Advertising
Since your side business is already profitable, you can budget for buying highly targeted ads. These are ads that are meant to reach a specific demographic rather than the public at large. Think of it this way: You’re going for something that’s closer to a direct mail flyer rather than a TV ad.
This strategy works really well if you have a good conversion rate. Unfortunately, there’s no specific number that makes for an ideal conversion rate—it depends on the industry, your clientele, and how you’ve marketed to them so far. But as long as you’re satisfied with the number of your leads that convert into sales, and these sales are profitable, it’s a good start.
First, buy ads that will directly reach the types of customers who have already been buying from you. Make sure that you’re aware of your customer demographics and buyer personas. If not, fill out the worksheet from this tutorial, which will give you a concrete idea about the specific groups your ads should be targeting:
Then, consider if your ad campaign should be offline or online. Usually offline ads work best if you’re serving local customers and you know where to reach them directly. This could be via relevant establishments where they tend to hang out. For example, you can put posters or flyers for your high school math tutorial services near a school. Or, if you know that your target customers read specific local publications, you can place ads there. You can try using these print flyers or brochure designs for your ads.
If your target customers aren’t confined to a specific area, online ads work really well. Usually, when you place ads on Facebook or via the Google AdWords program, you can narrow down who sees the ad based on age, location, gender, and interests. The more you know about the group you want to reach, the more specific your ad buys can be. To learn more about placing online ads, check out these tutorials:
Social MediaHow to Track Your Social Media ROI (Get Better Results)Brenda Barron
MarketingHow to Write a Click-Grabbing Adwords AdDavid Masters
4. Work With Influencers
Are there any people you follow on social media whom you don’t personally know, but you read their posts? These could be celebrities, entertainers, leaders in your field, or bloggers you like. These are “influencers”—people who have a certain influence over a specific audience.
Take a look at your side business, the products you offer, and the types of customers you want to attract. Given these criteria, who would be the influencers your customers are likely to follow? In the case of childcare products, these could be mom or dad bloggers who typically post parenting-related content. For beauty products, these could be fashion or beauty bloggers, or even the beauty columnist from your local paper.
You can find influencers via tools like Followerwonk or Klout. If you have a highly communicative relationship with your clients or customers, you can also ask them directly about who they turn to for advice, reviews, and information relevant to the problem you’re helping them solve.
Once you have a list of influencers, you’ll know who to reach out to. You can simply network with them to start a genuine relationship or ask them to review your product. (Remember: They should disclose to their audience if you paid them for the review or gave them free samples.) The following guides can help you get started reaching out to influencers:
Small BusinessHow to Professionally Network as a Small Business OwnerMarc Schenker
BrandingWhat Is a Brand Ambassador?Brenda Barron
5. Release New Products or Services
You can also opt to grow your product line as a way to scale. If you offer customers more solutions that address their problems, you’re likely to get a repeat customer for life. The downside is that adding new products or services requires a lot of work. Because of this, focus on ideas that won’t call for adding too much time to your already busy schedule.
This approach is especially tricky if you offer services, such as consulting or freelancing. After all, offering more services means billing more hours. In this case, instead of adding more services, try to “productize”. Ask yourself: Is there a way I can make a product out of my skills that will solve similar problems for my clients? Your time as a service provider is limited, but if you’re selling an ebook, online course, or templates, your inventory is unlimited. Learn more about how to turn your services into products.
For side businesses that sell products, scaling your product line is much simpler. What product ideas will go well with your best sellers? What can you bundle with your existing offers? The following guides can help you brainstorm your way into a new line of products that can bring in more sales and profits. You can use these same techniques for services as well:
StartupsThe Lean, Agile Way to Build Your First ProductAndrew Blackman
BrainstormingStarbursting: How to Use Brainstorming Questions to Evaluate IdeasLisa Jo Rudy
Get Ready for Business Growth Pains
Once you’ve picked a strategy for growing your business, remember that growth comes with its own challenges—most of which you can’t predict. Do a mental run-through of the growth strategy you plan to use. This can help you work out the potential problems in your plan, as well as figure out the steps you might have missed.
You can also run a small test of your chosen strategy first, rather than investing everything you can in one go. For example, rather than producing dozens of units of a new product, do a limited release for a handful of units to your most loyal customers. Not only will you spot problems before you scale, you also lower the risks that come with growing your business.
By making sure that your side business is ready to scale, choosing the right strategy that works for you, and doing test runs of your growth strategy, you’ll successfully upgrade your small side business into a thriving, growing brand.