Despite the massive changes in consumer behavior and worldwide supply chain shortages, the global economy is projected to grow at least 6% this year and 4.9% the following according to the World Economic Outlook (1).
Even Indian startups marked a historical high in the first half of 2021. The total funds flowing in the Indian startups stood at over 10.8 billion USD across 614 funding deals. Compared to H1 2020, the total funding in H1 2021 was increased 2.1 times, while it witnessed a 72% rise compared to H2 2020 (2).
Udaan, a B2B ecommerce player founded in 2016, witnessed a 21x revenue in FY 2020 (3). Another example includes Dunzo, a hyperlocal delivery platform based in Bengaluru witnessed a 35x rise in its revenues in FY 2020 (4).
And that’s why we decided to break down some of the keys that have led to businesses’ meteoric rise. We referred to Failory’s list of India’s 300 Most Valuable Startups for our analysis (5).
Upon analyzing multiple businesses [India’s 300 Most Valuable Startups (6)], we found three key distribution channels for any business: Amazon, D2C, and Wholesale.
We ranked D2C as the top channel.
Here is how you can use it.
Instead of manufacturing your products right away, you can:
- Paid a freelancer to design your products’ mock-ups
- Build a landing page and capture email addresses of people interested in purchasing your product/s
- Spend on Facebook or any other form of digital ads driving potential customers to that landing page
Once you gather enough emails, a few thousands perhaps, you can start your production and notify your list.
And once you start testing sales on other channels, for say Amazon, you will realize that each channel has different types of customers.
Hence, the key is to keep these channels separate, ensure that they survive on their own, and has something unique to offer.
Other effective ways include:
- Loyalty rewards
- Access to brand community
- Unique product drops
There is a common misconception that Amazon and other ecommerce marketplaces can cannibalize your D2C business. However, if you do things right, that won’t be the case.
The key to growing your wholesale business is trade shows.
There are two primary types of sales, order-writing shows, where we believe you will make the most money, and exhibition shows, where you share your new products with existing customers.
Since the coronavirus pandemic, participating in exhibition shows may not be as easy as before; you can still opt for scheduled Zoom meetings with your customers.
Powering the Next Growth Round
When you have limited resources such as workforce, or funds, there would also be a limit to what you can handle regarding inventory, agencies, 3rd-party logistics, and contractors. In other words, your company will start to struggle.
And when that happens, remember to take your foot off the accelerator and spend some time
- Building new systems
- Creating organization charts
- updating your business plan
- Hiring people who can add unique value to your business
To power the next growth round of your business.
Remember, finding the right growth strategy for your business would depend on the stage of your business and your currently available resources.
Next comes considering what you have to invest, such as time, money, expertise, or personnel. It can also include factors like your present market, the interests of your consumers, and your business goals.
Strategies and tactics that worked for other businesses may not work for you. Hence, make sure the strategy you decide to move forward with appeals to you and your business.
Here is how you can get started:
- Settling on an idea or two according to your circumstances and need for your business
- Update your business plan
- Set benchmarks for expenses, growth, and revenue
- track these benchmarks, and regularly monitor your progress
Tip: Several businesses have also struggled during their growth. One of the most excellent things you can do is go through various related case studies to know how others succeeded. See if there are any strategies you can implement or anything you need to avoid doing. In short, use case studies to learn from the success and failures of others.
Read Also: Insights From the 2021 Inc. 5000: Part 2
Effectively Manage Your Cash Flow
Running and managing a business can be cash-intense, especially when you are selling physical products.
Below is how you can manage your cash flow during the different phases of your business’s growth:
- Presales (Early-stage): Like most new companies, you probably also won’t be able to get a credit line in the early stages of your business. In such a case, you will have to rely on presales. You can place an order with the manufacturer, and then when it is about two to four weeks before the delivery, you can run a presale with your D2C customers. This way, your customers also won’t have to wait for too long for something they have already paid for.
- Expensive Credit Lines (Growth-Stage): At this stage, you can take multiple credit lines like PayPal Working Capital, Amazon Lending, Shopify Capital, etc. (9, 10, 11). However, make sure to track all of your credit lines in a big spreadsheet, and don’t be in any debt for more than one to two months.
- Mature Backing (Established): Once you establish a steady growth, revenue, etc., with your business, you can renegotiate with banks, conduct a formal audit, and ensure a mature backing. Use it to generate a healthy cash profile.
Here are some additional ways you can effectively manage your cash flow:
- The habit of bookkeeping and keeping it updated
- Generating cash flow statements
- Regularly analyzing your cash flow and figure out where you need to increase investment or reduce costs
- Speed up your receivable accounts
- Effectively categorizing different accounts and cash flow to keep it all organized
- Keeping track of debt payments
If you have a poor cash flow, you can improve it via increasing revenue, reducing overhead costs, careful inventory management, aligning receivables to payables, speeding up your invoice cycle, paying off your debts faster, selling your assets, and even refinancing your debt (12, 13).
Read Also: 12 Keys to Grow Your Small Business
Over the past few years, the costs for most primarily used advertising channels, Facebook and Instagram, have dramatically surged (14).
And one effective way to reduce your marketing budget and still have an effective strategy is to diversify your budget to new marketing channels such as podcasts, influencers, emails, and even Snapchat ads.
Remember, one of the essential principles for the success of any business is strong momentum in your sales. It needs an emphasis on marketing that permeates the entire company. Everyone in your team must think about selling and satisfying consumers all the time.
Several people would say that the purpose of building a business is to make a profit. However, we don’t believe that is true. Instead, it is about “creating and keeping a customer.”
You will make a profit when you create and keep a sufficient number of customers cost-effectively (15).
In short, the most important skill you need to develop to find success in your venture is the potential to sell yourself and your offerings to your target audience.
It makes keys to grow a business quite simple. Isn’t it?
When it comes to products, the important key is to sell, sell, and sell!
Not only in business but the ability to sell is also one of the keys to a successful life. In most cases, a successful business starts with a single person who is excited about something and excellent at selling the same to others.
Be sure to like your product so much that you can hardly even wait to talk to other people about it. Be eager to make new customer contacts.
Even if you have the finest product or service, your business will fail without any sales expertise.
For more information and strategies on marketing, read our previous stories, Offbeat But Effective Marketing Strategies to Stand Out, GenZ Marketing: Brands Need to Go Beyond Advertising, and Rural Marketing in the Post-COVID Era: A Lucrative Space.
One of the most real and most effective drivers for the success of any business is innovation.
Try to innovate in all aspects of your organization and make them more efficient.
Also, try launching new products and focus on being the first in your industry.
Remember, people love talking about innovation. Make your early adopters your biggest vocalists.
People often confuse innovation with technology improvements in an organization. However, innovation is about an overall improvement.
You can try defining ways to include radical and incremental improvements to your business. It doesn’t have to be limited to the technological aspects. Instead, make sure they incle all the functions and domains that make up your entire company (16).
Here are some factors a business can consider for successful innovation:
- Constant and radical improvements
- Creating value for customers
- Implementing an appealing business model
- Proper allocations of all your resources to support your strategies
- Creating an innovative company culture
- Staying focused
Don’t try to accomplish everything at once. Instead, you only need to focus on things with a realistic chance of being the best in the market.
If we put all the keys and strategies aside, the secret to any success is dedication towards the end goal and hard work.
Hence, don’t worry even if you experience defeat in any of your business strategies. Rather, look at failure as a learning opportunity.
In the end, we hope these strategies can work for you.
We strongly believe if you keep the things mentioned above in mind, you will find your own best practices to grow your business.
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