In many ways, launching a business feels like crossing the finish line. After dreaming about it, stressing over it, and likely facing setbacks and victories, you finally made it. Yet the end of one journey is just the start of another: growing your business.
Turning your business idea into a reality is a major achievement, but nurturing it so that it continues to grow is another endeavor.
Here’s what business growth involves, along with a few strategies and tips for success.
What is business growth?
Business growth refers to ongoing efforts to make your business larger or more successful. There are many ways to define those terms as a business owner: The pursuit of increased revenue growth and profitability might include expanded product lines or market share, nurturing a larger customer base spread among multiple locations, or some combination of each. Your business may prioritize increasing the number of customers you cater to while another business might prioritize increasing customer retention. Meaningful gains in an area you consider critical to your success is business growth.
Types of business growth
Here are the main types of business growth:
Organic
Organic business growth relies on internal resources, like product development or marketing teams. You achieve organic growth by developing new offerings (i.e., launching new products) or optimizing existing processes (like marketing strategies). While organic growth tends to take longer to pay off compared to other strategies, it’s considered optimal for a company’s health because it carries less risk than external financing or outsourcing. Organic growth is often more measured growth that’s in step with customers’ desires and expectations. For example, you might add a new line of walking shoes to complement your hiking boots because you see a need within your customer base.
Inorganic
Inorganic business growth is achieved through external mergers, acquisitions, and franchising. These strategies can lead to faster business growth by rapidly expanding your existing customer base or capturing your competitor’s market share. While it’s an expedient form of business growth, it can be risky to entrust your brand reputation with franchisees or new partners.
Vertical
Vertical integration expands the operations your company owns or controls across its supply chain by acquiring suppliers or distributors. The goal is to increase efficiency, reduce costs, and gain more control over your production pathway.
For example, suppose an independent olive oil brand purchases its own mill for in-house production instead of outsourcing to a third party. In that case, it vertically integrates a key element of its process, giving it more control over production efficiency and details.
Horizontal
Horizontal integration occurs when two companies in the same industry merge to increase revenue and reach more customers. This strategy frequently occurs among large companies or corporations.
Business growth strategies
While each business is unique, successful businesses often follow predictable patterns. This means that no matter which aspect you want to grow, there’s a tried-and-true business growth strategy out there to facilitate it. Here are a few of the most common business growth strategies you might consider:
Expand into new markets
If you sense your business has plateaued in its current market, expanding into new ones can facilitate growth. In brick-and-mortar retail, for example, access to different markets—like a nearby shopping district with a different target market—means exposure to new audiences and potential partnerships with neighboring businesses.
When your company expands, it’s considered organic or inorganic growth, depending on your approach. Opening your brand to franchising opportunities is an inorganic way to broaden your footprint but requires relinquishing some operational control. Investing in a second or third location with internal funds, or expanding digitally through targeted marketing and online shopping experiences, is considered an organic strategy.
Launch new products
If your loyal customers love your business but have limited opportunities to spend money with you, expanding your product line can be an effective way to increase revenue and average cart sizes—as well as attract a wider range of customers.
For example, a bakery known for its breads might develop a line of ice creams and dedicate a portion of its unused storefront to the new products. This not only diversifies the times customers might visit (bread is more popular in the morning, while ice cream will draw in a late afternoon and evening crowd), but it also gives customers more options.
Developing and launching a new product line is considered organic growth, as it’s usually fueled by your internal resources.
Lower prices or increase value
Lowering prices and positioning your product as a better deal than competitors’ offerings is a proven pricing strategy designed to attract attention and build a loyal customer base. Remember that price is more about perceived value than the actual figure. To avoid a race to the bottom, focus on demonstrating your product’s worth to customers, ensuring they understand why it’s the better choice even at a lower price.
Reducing prices through a merger with another company is considered an inorganic or external growth strategy. While it lets you charge less, it may come with sacrifices or changes, like rebranding the product or altering production methods. If you can lower prices by reallocating resources or adjusting internal processes, it’s considered an organic growth strategy. This approach lets you maintain control over branding and operations while offering better value.
Partner with other businesses
Business partnerships can be incredibly valuable—especially when they’re focused on growing brand awareness in your community. Look for complementary brands with similar audiences (or a new audience you’re looking to reach) and brands that highlight your value proposition.
A plant seller might benefit from staging their products in a home goods boutique, or a small-batch brewer might find new fans by hosting the occasional happy hour at a local record store. Beneficial partnerships are considered an inorganic growth strategy since they rely on external factors.
Tips for growing your business
Here’s what to keep in mind as you plot your plan for growth:
Stay organized
Strategizing for sustained and intentional business growth requires staying organized in every aspect of your business. Take some time to determine which organizational methods work best for you. Whether you use dedicated lists and productivity tools like Trello, Asana, and ClickUp or prefer mapping everything out on a whiteboard, identify a system to track tasks and performance.
It can also be helpful to automate mundane tasks so you’re freed up to focus on the bigger picture. For example, you might set up marketing automations that maintain engagement with existing customers so you can focus on expanding your retail locations.
Be specific about your goals
It’s tempting to pursue growth on all fronts simultaneously, but as with most things, it’s more effective to narrow down your business goals. Some tips for setting priorities:
- Identify your strengths and weaknesses. Depending on your business model, it might make sense to double down on what you’re doing well (such as a repeatedly purchased product that could use more marketing spend) or fix something that’s holding you back (like a convoluted checkout process).
- Set goals you can track. Define measurable key performance indicators (KPIs) like an increased percentage of online sales or newsletter signups as the result of a targeted campaign.
- Revisit your business plan. To regain focus on what matters most, it can be helpful to return to your business plan and assess what goals you had in mind when you first started your company. What have you learned since you started, and how can that guide your strategy moving forward?
- Separate the short term from the long term. Some goals you’ll be able to achieve this financial quarter while others will require years of work to complete. Break your long-term goals into short-term actions so you can measure progress and feel buoyed by wins along the way.
Focus on your customers
Understanding your target audience—not just who they are, but what they need—is crucial for making meaningful decisions about business growth. Combining thorough market research with your customer data and community insights can reveal opportunities within your competitive landscape and help you tailor experiences to your target customers. The more you invest in building community, the more the community will provide the feedback you need to deliver great customer service and product quality. It’s a virtuous cycle that fosters sustained growth.
Business growth FAQ
How can a business increase growth?
You can achieve growth—measurable improvements over time—by launching new products, lowering costs, expanding into new markets, engaging with potential customers, or partnering with other businesses, like merging with competitors to gain market share.
How can a small business grow big?
The ways in which small businesses get big comes down to timing: It can be achieved slowly and steadily, by identifying and catering to untapped and underserved communities, for example, or methodically building a loyal customer base through creative marketing and a high-quality customer experience, continuing to refine your offering and optimizing how the business is run. You can grow your business much faster through a larger external event, like an acquisition or merger.
Why is my business not growing?
If the problem is brand awareness (you’re blending in too much) or marketing approach (not reaching the right customers where they are), recentering your strategy around your unique value proposition, mission, or values could help attract new customers and generate more press coverage. If you’re facing cash flow problems or declining sales, this might be indicative of mismanaged budgets, incorrect forecasting, or supply chain issues.
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