BUSINESS GROWTH: 2023 Best Practices & Helpful Tips to Implement Now!!

Any size of business searches for methods to improve sales and market share. To improve their businesses, companies frequently decide to employ various growth methods. So, if you understand these tactics, it will be easier for you to lead strategic projects that will help your business succeed. In this post, we discuss the various types of business growth, including its stages and plan, and offer suggestions for growing your business.

Preamble

Business growth occurs when all parties involved in a company’s success—including owners, employees, and external factors—contribute to its success. A business grows when it gains more customers, generates more revenue, or manufactures more products. The majority of businesses also desire expansion, which influences a number of decisions that have an effect on how they operate locally and globally on a daily basis. Consumer trends, market potential, and managerial decisions all influence the expansion of a business.

Reasons for Business Growth

Most organizations expand to become larger by expanding sales or market share, but size isn’t the only factor to be taken into account. Numerous other advantages promote business expansion. As an example:

Improved market resilience or sustainability
Efficiencies of scale that result in lower prices
More dominant market position
Additional purchasing and haggling power
Capacity to diversify and reduce company risks.
Ability to lessen competition’s threat
The ability to be patient despite market volatility and downturns
The ability to recruit and retain top talent and employees

Different Business Growth Tactics

Companies can use the following key strategies to grow their market share, sales, and internal operations:

#1. Exposure to the Market

Market penetration happens when a company makes an effort to expand inside its present market. To do this, they can try to reduce prices or step up marketing initiatives to expand market share. Increasing brand recognition can also be a successful technique to carry out this plan.

#2. Development of Products

To increase sales, a business may choose a growth strategy that includes making new products or improving the ones it already has. So, some businesses decide to take their existing inventory and add new features to it to bring in more customers. Businesses can encourage growth by spending money on the design and production of new items.

#3. Efficiency and Productivity

Some companies expand by improving productivity by modifying their business procedures. In addition, using efficient production techniques can lower costs and boost earnings. A company may decide to audit its production chain, which includes its manufacturing and distribution operations.

#4. New Geographical Regions

Businesses can also use marketing costs as a way to grow by investing in expanding into new regions. This can refer to the expansion of product offerings and distribution on a regional, national, or even global scale. If distribution is handled well, selling products outside of a current region can open up new ways to make money.

#5. Diversification

Businesses that opt for diversification develop new items for an entirely new market. This type of growth may necessitate expansion into foreign markets or regions in which the company has no prior sales history. In an effort to increase their market share, some businesses accomplish this by searching for expansive expansion opportunities. Diversified businesses may have interests in multiple industries due to the variety of products they offer.

Types of Business Growth

Below are the various types of business growth:

#1. Organic Growth

This is one of the easiest and most natural types of business growth. It is popular, dependable, and effective. Organic growth includes everything from new product development to shop expansion. Start-ups and small enterprises benefit from organic growth. Organic growth occurs when a corporation uses current resources to boost revenues. However, organic growth is unsustainable. This is the simplest method of corporate growth, but it uses resources most efficiently. Organic business growth focuses on growing production and leveraging current assets and money.

#2. Strategic Business Growth

This is one of the types of business growth that emphasizes long-term growth, unlike organic growth. After organic growth, a system of strategic growth is effective. Due to available resources, organic expansion must precede strategic growth. After achieving organic growth, the company should have sufficient funds and revenue for expansion.

Entrepreneurs should consider strategic growth from the start. Some ways to grow strategically are to add new products or services to a line, change the way you market to reach a certain group of people, or do new research. Long-term corporate growth is strategic. Strategic enterprises have reached their organic growth peak. It helps stagnant firms. Organizations can grow by planning every step. Business expansion to a new location, product line expansion, demographic targeting, customer acquisition, etc.

#3. Internal Business Growth

This improves how they can help, rather than just increasing production. A stylish business or worker automation system may be part of this business growth. Internal strategies for business growth are different from expanding to a new market or product line, so some businesses may find them hard to use. Instead, organizations adjust their workflow, which can scare present employees. People are afraid of new items and firm operations.

#4. Rapid Growth Strategy

Rapid business growth is the finest alternative for fast growth. During this time, manufacturing, clientele, and personnel increase, creating distinct risks and obstacles. Every fast-growing business struggles with cash flow, operations, and customer service.

This is one of the types of business growth that has sales and revenue increases that exceed the business owner’s expectations. By meeting market needs at the proper time and price, you may grow. Demographics and particular techniques and client ties sustain growth, giving the business an edge over competitors.

#5. Partnership

To grow, many companies combine, acquire, or partner. These tactics are the riskiest and most profitable. Also, this method can help enter new markets and grow existing customers. Extended production capabilities can also simplify product development and launch.

Business Growth Stages

We’ll outline business growth stages to assist you in planning the expansion of your small business.

Also see: GROWTH STRATEGY FOR BUSINESS: Simple 2023 Tips

#1. Determine Existence

One of the first business growth stages is to determine existence. You can’t launch a successful company without first developing a product or service that people want. As they try to bring in their first customers, business owners should ask themselves the following important questions:

Do we have enough clients, products, and service to make a profit?
Can we grow our sales beyond our early clients?
Can we fund this startup phase?

#2. Survive to Thrive

This is one of the business growth stages that has a profitable product or service and a consumer base. Retention and revenue-expense balance should be their priorities. Ownership and a few managers or overseers characterize the surviving business. However, this auxiliary cast mostly executes the owner’s purpose rather than making independent decisions. Thus, systems development is low and ownership defines the firm. As they yield marginal profits or the owner retires, surviving firms are still susceptible. They could also fold or be sold, sometimes at a fair or expensive price, sometimes at a loss to the owner. Companies that survive can progress.

#3. Enhance Achievements

By now, the company’s business concept is proved. The corporation has systems, attracts new customers, and retains old ones. Ownership’s main issue at this development stage is whether to leverage the company’s successes to expand or make it sustainable and profitable while they scale back. Even if they’re less vulnerable, company owners in the success phase must make important judgments.

#4. Determine Expansion

This is one of the business growth stages that requires rapid expansion and money if a firm’s owner chooses growth. People who want to grow their businesses worry about:

Delegation

Are there tasks that managers can handle? Can rapid growth preserve managerial effectiveness? Owners must be able to assign duties as the firm grows and expectations increase.

Cash

Can the high needs of growth be met? If you say “no” to this question, you could end up tired, make bad investments, and get into debt. Companies have departments, divisions, and sales and production divisions when they are in the “identifying expansion” stage. To be successful, the owners of the company must deal with its fast growth. If not, the company might be sold or shrunk to a size that it can handle. Also possible: A new owner or a group of creditors with management skills that help the business grow could replace the original owner or entrepreneur.

#5. Become Fully Mature

This is also one of the business growth stages where the business has grown to a certain size and is now focusing on bringing in more money and keeping its young spirit. Mature organizations have done their strategic planning, have a strong management team, and have financially and operationally separated ownership. Ossification, or low-risk sustainability, is the main danger for organizations at this stage. Mature enterprises must adapt to market changes and use their market share to influence them.

Keep this framework in mind as you join a developing business or start your own to prepare for every step of growth and reduce uncertainty, the largest challenge in entrepreneurship. Knowing what to expect as you grow lets you control your company’s destiny.

Business Growth Plan

Goals, strategies, and plans are all included in a corporate growth plan, a comprehensive framework for attaining company growth goals. These programs often last one or two years. They can assist in carrying out growth initiatives and assessing outcomes for business development managers, corporate leaders, and other stakeholders. By evaluating growth indicators, the business can modify its strategy as necessary to achieve the broad objective defined in the growth plan.

Why Are Business Growth Plans Important?

The following are just a handful of the many factors that make a corporate growth strategy crucial:

Market penetration and share: When costs rise but your market share stays the same, you’ll surely start reporting losses rather than profits. Prepare for business expansion to avoid this problem.
Gaining back lost ground: Most businesses start off losing far more money than they do. Your business needs to expand to the point where it can generate enough money to make up for these losses.
Risk in the future will be reduced: Even established businesses need expansion strategies. These businesses increase the efficiency of their sales over time, which boosts liquidity. This liquidity may be useful if you require cash to address unanticipated issues.
Even while a strategy for business expansion is advantageous to the entire organization, for the vast majority of companies, the main goal is to develop it with investors in mind. Investors look for a comprehensive breakdown of the strategies your business will use to increase sales in the upcoming months.

What to Include in a Business Growth Plan

A business development strategy primarily focuses on expansion and how you intend to do it. Although it takes work, developing a sound plan could be quite beneficial for your ambitions for progress. The following components must be present in your growth strategy:

A chart showing potential growth areas
Defined monetary objectives for the quarter and the year
A marketing strategy outlining how you’ll promote growth
A financial strategy to assess the resources available for expansion
A statement describing the expectations your organization has of its employees

How to Write a Business Growth Plan

Give your ideas some thought and conduct some research before developing a successful business development plan. The following factors should be at the forefront of your mind as you develop your business expansion strategy.

#1. Set Priorities First

Even if it is impossible to foretell the future, planning for it is still doable if you research your target market, your rivals, and the company’s previous successes. The Small Business Administration (SBA) has a detailed guide on how to make a growth strategy for a business. They are as follows:

#2. Examine Different Growth Strategies

Examine the business plans of a few prosperous organizations before you begin to write.

#3. Look for Potential Development Opportunities

You may find out if your options for growth are to create new items, enhance your existing ones, concentrate on a different market, open more offices, or even expand overseas with a little study. Include your top development prospects in your plan once you’ve determined who they are.

#4. Assess your Team

As part of your strategy, you should look at your staff and figure out how many people you need to reach your growth goals. Determine how much growth is possible with your current team by evaluating both your own skills and those of your employees

#5. Find the Capital

Describe the project’s financing strategy in detail. On Business.gov, you can find instructions on how to ask for funding and how to get in touch with SBA lenders.

#6. Spread the Word

A targeted marketing plan is crucial for business growth. Describe your marketing strategy and how it will change as your company expands to promote growth.

#7. Seek Assistance

The ideal people to ask for guidance on creating your growth strategy are other business owners who have had experience growing their companies.

#8. Resolve to Write

Making expansion plans is now easier thanks to business plan software. Despite the fact that the majority of planning software is designed for business plans, you can tweak it to create a plan that prioritizes growth.

What Are the Major Types of Business Growth?

A firm can expand in four ways: strategically, internally, organically, and finally through partnerships, acquisitions, or mergers.

What Are the 3 Ways to Grow a Business?

Obtain new clients.
Increase the value of your average transaction.
Increase the Purchase Frequency of Your Customers.

What Keeps a Business Growing?

Making your present and potential consumers happy with their experience is essential for rapid growth.

References

business.com
lucidchart.com
scaling.partners
indeed.com