A slow and steady growth strategy wins the race—or does it?
Some new businesses take time to gain momentum and ultimately become profitable, while others go from zero to successful much more quickly.
As someone whose business was in the former category, I set out to learn the secrets of owners who experienced rapid business growth. What did they do, and could their growth strategy be replicated?
Address Customer Complaints
We've all heard that a major factor in a new business' success is whether that business fills a niche or meets an untapped customer need. But if you want to employ an effective growth strategy, you might want to take that idea a step further and provide relief to customers who are vocally expressing anger with a current state of affairs.
Erica Douglass, CEO of the Austin, Texas-based electronics repair shop 1Up Repairs, did just that.
Other businesses leverage a growth strategy that piggybacks on new laws and regulations that stand to benefit or hurt prospective customers concerned about compliance—and either enhances the value or diminishes the pain.
“We noticed that mobile phone manufacturers were making it difficult to get products fixed or working optimally," Douglass says. “Our customers were waiting in lines longer than the DMV to get a cracked screen repaired. If a phone port broke, they'd have to mail the product in and pay upwards of $100. Their batteries would wear out and they'd be forced to buy new phones.
"We addressed an ongoing customer frustration by providing fast and easy repairs to items that most consider essential to their daily lives," she continues, "and in doing so went from a single shop to six in a few years."
Build a Memorable Brand
Will Robins, CEO of men's grooming venture Manscaped, didn't want his new company to be just another provider of razors or body lotion. As he conducted market research, he learned there was a serious deficit in safe, easy-to-use products to groom below the belt.
“That was our plug," says Robins. “Our new brand, Manscaped, offers men not just fancy electric trimmers and razors, but also ones that feature nick prevention—safety guards that prevent customers from getting into a hairy situation. Manscaped became associated with comfort, assurance and the removal of dread for guys ranging from tweens to 50 year olds."
Robins' growth strategy included fully expressing the brand, but in doing so, he and his team did more than develop a cool logo and tagline.
“Through our digital presence and content, especially our humorous videos, we created a unique voice that makes our audience laugh and in the process wins them over to trying the products."
The Manscaped brand caught so much attention that it was featured—and funded—on the ABC television series Shark Tank.
Capitalize on Regulations
Other businesses leverage a growth strategy that piggybacks on new laws and regulations that stand to benefit or hurt prospective customers concerned about compliance—and either enhances the value or diminishes the pain.
Lane Campbell, co-founder of the New York-based private equity firm Activated Capital, created a strategy based in part on the Tax Cut and Jobs Act passed in December 2017. The firm aims to decrease wealth inequality in the U.S. by expanding access to home ownership and offering products to individuals that are typically only available to larger institutional investors.
“We based our Opportunity Zone Fund on The Tax Cut and Jobs Act, allowing individuals the ability to defer and avoid capital gains, which enhances the already attractive risk-adjusted return for real estate investors," Campbell says.
Has it worked? The business growth speaks for itself. According to Campbell, Activated Capital is on track to manage $20 million in assets after just two months of being open to outside investors.
Master the Art of Fulfillment
Will Robins of Manscaped understood that his brand was only as strong as the products behind it, and that customers had to receive inventory without incident.
“Fulfillment encompasses the entire process of receiving an order and delivering the product to the customer. It's very complicated, with many moving parts such as warehouse organization, order management, packaging, shipping and customer communication," says Robins. “Our products could only reach the masses if all of these factors came together with minimal hiccups."
Robins' growth strategy also incorporated building a variety of distribution channels, including e-commerce giant Shopify, Amazon, affiliates and retail stores. Smart branding combined with powerful fulfillment and distribution resulted in business growth from launch to thousands of orders a day in just over a year.
Rapid business growth is never guaranteed, but certain strategies make it far more likely. By starting a business that addresses an on-fire issue and takes advantage of current conditions, and then cleverly branding it and ensuring a smooth path to the consumer, your profits may outpace your investment capital.
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