Shaping a Business Growth Strategy
A growth strategy that is well-defined is an essential component of any business, as it goes beyond just a marketing plan. Without one, businesses can be subject to the unpredictability of consumer behavior and market fluctuations.
So, what are the ways in which a business can grow? If you are uncertain about the necessary steps required to develop an effective growth strategy, we have you covered.
Business expansion is a stage where a business is growing and requires additional ways to generate revenue. This can occur when a company increases its income, creates more products or services, or broadens its customer base.
For the majority of businesses, expansion is the primary objective. Consequently, business decisions are frequently based on what will support the company’s continued expansion and overall success. There are numerous approaches that can encourage growth, which we will elaborate on below.
Types of Business Growth
As a business owner, there are various options available to achieve growth. Business growth can be categorized into the following types:
In organic growth, a company expands its operations using its own internal resources instead of relying on external resources to facilitate growth.
An instance of organic growth is improving production efficiency to increase sales within a shorter time frame. Utilizing organic growth ensures self-sufficiency and avoids taking on debt. Moreover, increased revenue generated through organic growth can fund strategic growth methods in the future.
Strategic growth entails developing initiatives to promote long-term business growth. Examples of strategic growth include devising new products or implementing a market strategy to target a new audience.
Unlike organic growth, these initiatives usually demand substantial resources and funding. Typically, companies opt for an organic approach first in the hope of generating enough capital to invest in future strategic growth initiatives.
The internal growth strategy aims to enhance internal business processes to increase revenue. Similar to organic growth, this approach requires companies to use their internal resources. Internal growth is about maximizing the use of existing resources.
An example of internal growth would be reducing wasteful spending and running a leaner operation by automating certain functions instead of hiring more employees. Internal growth can be challenging because it forces companies to scrutinize their processes to identify ways to enhance efficiency instead of focusing on external factors to facilitate growth, like entering new markets.
4. Mergers, Partnerships, Acquisitions
Although riskier than the other growth types, mergers, partnerships, and acquisitions can lead to substantial rewards. A well-executed merger, partnership, or acquisition can help a business break into a new market, expand its customer base, or increase its range of products and services on offer.
Developing a Business Growth Strategy
A growth strategy enables companies to expand their business, which can be achieved through practices such as adding new locations, investing in customer acquisition, or expanding product lines. A company’s industry and target market play a critical role in determining which growth strategies to pursue.
To develop a growth strategy, consider available options and incorporate them into your business plan. Depending on your business type, your growth strategy might include aspects such as:
- Opening new locations
- Investing in customer acquisition
- Exploring franchising opportunities
- Expanding your product line
- Selling products online across multiple platforms
Your specific industry and target market will influence your decision-making, but it’s almost universally true that new customer acquisition will play a significant role.
If you’re unsure about how to create a growth strategy for your business, here are some actionable tactics to achieve growth.
Steps for Successfully Growing a Company
- Start with a growth strategy template: Before taking any action, plan and document your growth strategy. Download a free Growth Strategy Template and use the included prompts to outline your intended process for growth.
- Choose specific areas of growth: Identify the areas of your business that you want to grow. This could include expanding your customer base, increasing revenue and profit, adding new products or services, or expanding to new locations.
- Conduct market and industry research: Determine if your desired growth is feasible and necessary by researching the state of your industry. Consider running surveys and focus groups with existing and potential customers or digging into existing industry research.
- Set achievable growth goals: Once you know what you want to grow and why, set clear, realistic, and measurable goals. Make sure to base your goals on industry research and quantify them in terms of metrics and timeline.
- Plan your course of action: Develop a detailed growth strategy that outlines the steps you need to take to achieve your goals. Include a list of action items, deadlines, teams or persons responsible, and resources needed to reach your goals.
- Determine your growth tools and requirements: Determine any specific resources your team needs to achieve your growth goals faster and with more accuracy, such as funding, tools and software, or services.
- Execute your plan and track progress: With your plan in place, execute your growth strategy and hold stakeholders accountable. Keep an open line of communication and track progress regularly to ensure you’re on track to achieve your growth goals.
Remember, the tactics you use to grow your company will be specific to your business, but following these steps will help you develop a solid growth plan and execute it successfully.