There’s plenty of overly general, online advice about how to scale your business in South Africa. It ranges from pleasing customers and boosting your marketing to hiring the right people.
In practice, simply making your business model “better” isn’t usually enough.
Instead, triggering significant growth takes an active decision and a clear, bold strategy.
Here, we outline some of the best strategies for scaling your business so it achieves real, significant growth.
The four traditional growth strategies
Traditionally, there are four main strategies used to scale a business. Each has its own risks and benefits.
Market penetration: your business increases market share by selling more of the same product in an existing market. This is very low risk.
Product development: you develop and sell a new product or service to existing customers.
Market development: you find a new market – such as a new location or segmenting a market – to sell an existing product in.
Diversification: your business sells a new product or service to new customers. This is the riskiest growth strategy because it requires both product and market development.
Other ways to scale your business
A number of additional strategies can drive rapid (and sustainable) business growth.
Bid for contracts and purchase orders
A fast and very effective way to drive the growth of a business is to secure a significant tender or purchase order.
Sometimes, just one significant order is enough to transform a small business into a much larger, more profitable enterprise. A successfully fulfilled order has a tendency to lead to more orders in future, too.
The necessary core abilities must be in place so that your business can fulfil an order to the buyer’s satisfaction. However, it’s not always necessary to start the process with large capital reserves.
Once you’ve got a confirmed tender or purchase order, you can use it to secure working capital from BizFunding – making it possible to pay suppliers.
At BizFunding, we don’t charge monthly interest or fees. Instead, we partner with your business, agreeing to share profits. You pay BizFunding back only once your business is paid.
This model makes it possible for smaller enterprises to compete with larger, cash-rich businesses.
Leverage e-commerce
Taking advantage of the e-commerce boom is one strategy for scaling a business.
The value of the South African e-commerce market is predicted to reach US$7,218 million by the end of 2023.
It is currently showing growth as high as 17.9%, with predicted compound annual growth of 12.5% over the next four years.
The five largest e-commerce markets are electronics and media (24.8%), food and personal care (23%), toys, hobby and DIY (18.5%), furniture and appliances (18%) and fashion (15.7%).
However, it’s not just B2C retail goods that are selling via e-commerce. Increasingly, business buyers are shopping online too.
Acquire or partner with other businesses
Another way to scale your business in South Africa is through a strategic business partnership.
This can be achieved via an acquisition, a merger, a joint venture, a formal/informal partnership or purchase of a franchise.
Potentially, joining forces with another business can bring advantages such as:
- access to resources
- shared workloads
- economies of scale
- access to new customers and markets
- expanded skills and talent base
- product diversification
- reduced risk.
Outsourcing non-essential functions to one or more third-party businesses can also have strategic value. It may save time and improve efficiency, making it possible to focus on growing your business.
Inevitably, partnerships can also create problems. Conflicts are common, especially in relation to decision-making. For this reason, it’s essential to formalise any new relationship with a detailed contract.
How BizFunding can help scale your business
If you secure a tender or purchase order, BizFunding can help you scale your business in South Africa by providing working capital. Apply in minutes and receive a same-day proposal.
For more information, call us on 010 157 2499 or go ahead and apply online now.
