What’s an easy way to expand your business portfolio? Take out a loan and buy a new one. Okay, it’s maybe not that easy, but definitely an option for ambitious entrepreneurs around the US.
There are several advantages to buying an existing business and hanging the “Under New Management” sign out front. If you’d had success with one business, chances are you can parlay that into another successful company. One the other hand, if you’re looking to develop a company in order to sell it, today’s small business market has a rosy outlook for getting bought at a profit.
According to the Quarterly Insight Report from BizBuySell, a total of 1,814 small businesses sold in the third quarter of 2015, continuing a two-year trend of robust activity in the business-for-sale market. These businesses have average annual revenues of $450,000 (up from $432,556 in Q3 2014), and sold for an average price of $185,000. For the most part, these businesses come from the B2C market, primarily restaurants, retailers, and service sector providers.
So, what specifically are small businesses doing differently that is sparking such success? Here are a few strategies that are changing the modern small business landscape:
1. Use Sales Technology
Today’s small business owners have a wealth of data and tools to leverage to help effectively target their audience. For instance, sales technology such as customer relationship management (CRM) software helps businesses organize their data to discern patterns in buying behavior and engagement. CRM can also help organize tasks and remind users to follow up with interested leads, which is very useful in the retail sector. It can also track sales performance so that businesses can measure tactics that are and aren’t working and revise their strategies accordingly. (And it doesn’t cost a fortune; discover several affordable options here.)
2. Embrace Digital Marketing
Establishing a digital presence is another driving factor in the success of modern businesses. Think about it: Today’s buyers are digitally inclined, and businesses need a Web and social media presence to meet their consumers in the middle of their autonomous buying cycle. Even service industry businesses that rely on word-of-mouth for new work should have a website. And every restaurant and retailer should have a social presence for promotions.
3. Create a Documented Plan
Writing up a business plan will help solidify your goals and encourage you to act upon them. As your business rolls out, continually refer to this planning document to keep your goals top of mind and to correct any missteps. Without this document—outlining all your processes, from financing through marketing—your ideas might flounder, leading to disorganization and a confused mode of operation. For instance, pinpoint your starting budget, and then divvy up your spending depending on what you’ll need for your marketing strategy or taking on staff, for example, and refer back to this plan to keep yourself in check and your business afloat.
4. Focus on Building Trust
A great way for small businesses to simultaneously build brand awareness and increase profit is by focusing on existing customers. Building long-lasting relationships with loyal consumers increases your chances of word-of-mouth-inspired lead generation. Satisfied customers tend to recommend their favorite businesses to friends and family and share their experiences on social media and business review websites. So, even though acquiring new customers is good for business, taking time to nurture your existing relationships can be even more advantageous in the long run.
*Image Credit: "Under New Management" by tara hunt, Flickr
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