Sometimes to win in business, you need to do things differently. Often, the business strategies that deserve your attention are the overlooked ones.
There is value to be found where no-one else is looking because the lack of attention means the opportunities are less competitive and stand out with customers. This makes them cheaper and more effective for your business.
In this post, we’ll cover seven of those strategies. They won’t work for all businesses, but they are ideas that will get you thinking and revisit your level of ambition. These are not recommendations so remember to always seek professional advice before you take on risks.
1. Acquire one of your suppliers
Oftentimes, one of your suppliers is sitting on a really neat business. The best part is, you are likely to have a good insight into the market, so are likely to be a smarter buyer than the average acquirer and know which suppliers to buy and which ones to avoid.
Here are the benefits:
- Your business gets a guaranteed supplier
- Your new business gets a guaranteed customer (you!)
- Your original business is now vertically integrated with a key component of your business and you can find ways to become more efficient
- Together, this can form a competitive advantage for your businesses
- The risk that you run out of a key supply is reduced
If this strategy has potential for your business, it’s likely obvious.
Examples: A butcher can buy a farm or meat processing facility or a large ice cream manufacturer can buy a dairy farm or milk processing plant.
2. Acquire one of your competitors
Use your market insight to buy competitors and then leverage your operating ability to bring the business together with yours to create a bigger, for efficient business. Plus, you will have knocked out one of your competitors by bringing them in-house. That’s a win-win.
The beauty of this strategy is that you can explore using a loan to buy your competitor which means you leverage your returns and can benefit from tax advantages.
Examples: A local veterinary clinic buys a nearby clinic, a child care operator buys a local mom-and-pop competitor or a car showroom acquires another showroom.
3. Buy the real estate your business uses
If you currently rent the property your business operates out of, you have the option to approach your landlord and propose that you purchase the land and buildings from them. This strategy is not for everyone, as both buying and renting have their own advantages. Here are some of benefits of buying you might not have considered:
- Buying real estate is more easily financed than other capital costs, meaning you can potentially borrow money and leverage your returns
- With a loan on the real estate you create the option to get profits out of your company with better tax status
- Savvy real estate purchases will appreciate in value and have favorable tax treatments
- Owning the real estate your operate on provides security for your business because you don’t need to renegotiate leases and you can’t be force to move by a landlord
Buying real estate for your business could be something worth considering.
Examples: A mechanic buys their workshop or a law firm buys their offices.
4. Lease your property or equipment
If you have unused property or the equipment you use has predictable downtime, you can consider leasing it to other businesses for use.
This might even create an ecosystem around your business that attracts even more customers to your business, while you get paid through a new revenue stream.
Examples: A distillery and bar that operates out of an industrial area can look to develop the premises around the distillery and encourage local restaurants to start in the premises. This will bring new customers to the area, who may visit before or after their meal.
5. Start a business with synergies to yours
Depending on your business, you might have fixed costs or capabilities that can be shared with another business at little additional cost or effort. Executing on this strategy can lift the profits of both your current business and the new business at the same time.
This strategy might need a little creativity to use, but start by thinking about the costs and capabilities you currently have across marketing, sales and talent, and how these could be used for a separate, but related business.
Examples: A real estate broker could look to start a property management company to lease out the homes they sell for buyers, or decorating or home maintenance business.
6. Invest in an employee’s business
Many of your employees will have dreams of their own. They will come up with good ideas and then execute on these ideas with or without you. You may as well benefit from this insider knowledge by backing all your employees who want to start their own business. Who knows, you may learn a lot of new concepts you can bring back to your business and there may be partnership opportunities down the road.
Examples: A tattoo parlor owner backs an ex-employee who starts a custom car painting company.
7. Start new counter-cyclical business lines
Almost every business exists at the whim of economic and business cycles. Rather than ride the ups and downs directly, you can look to smooth out the cycles by starting new lines of business that will do well when your core business is doing poorly. This will be a natural hedge to your core business that means cash is coming in through all market conditions.
Examples: A consulting business can start a restructuring business, so when the consulting market takes a downturn they will pick up more restructuring work from businesses in trouble.
Exploring new and novel business strategies is a surefire way to make sure you are considering all the options available to improve your business. I hope these ideas have provided you with some inspiration to take your business to the next level.
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