The essential elements to business growth
From a financial and operational point of view, business growth is the process of improving some measure of an enterprise or start-up’s progress. Business growth can be said to be a significant increase in the scale of production, and quantitative output of a firm or an enterprise. Business growth is more of a quantitative measurement, as it relates to increase. Business growth has certain indicators such as increase in revenue, greater turnover, higher scale of production among others. It can also be indicated by minimising costs through batch production (mass production often reduces costs).
From an entrepreneur point of view however business growth means to generate profits and/or to expand. Every entrepreneur mission is to bring growth into their organization, and any business which doesn’t seek growth is as well as nonexistent.
There are no limits on the number of ways available to bring growth into an organization. However the most commune types of strategies in use for generating growth are:
1. Market Penetration: Once a business penetrates a certain target market, a significant growth is recorded. This is usually the issue for new and infant industries. Once the public gets to penetrate a certain market, its tentacles are spread on wider consumer base. For example, a computer producing company which started a few months ago. If among other giants of the computer production world, you derive a means of expanding your business to large firms which bases its activities on computer usage, it means the infant firm has penetrated the market
2. Market Expansion: This is when a business decides to expand its products to a new territory where there is high demand for its product or service. Indeed marketing expansion is a strategy that takes into account mainly two factors demand and competition. High demand with a low competition in a certain area, will increase the possibility for a business to expand geographically.
3. Product Expansion: this is when a new product is added to the product synonymous to the company, or there is an upgrade to the products originally produced. This is also known as product differentiation.
4. Acquisition: This is another type of growth, and as well as the rest, it equally relates to increase. Acquisition is the purchase of a direct rival in you line of business. The aim of acquisition is to eliminate a direct rival, and wing the customer base. This is also a significant kind of growth.
Experts often debate whether business growth is an in-born talent of an entrepreneur or it is much more of putting in place a correct process, following given path from previous business successes and failures. In his book The Growth Secret Roberto Liccardo unravels the mysteries of business growth through modern marketing, and reveals the magic and genius are not the necessary ingredients for success, but rather, propose a process that every entrepreneur should follow.
If you are an entrepreneur looking for business growth, you should always keep in mind that every company wants to grow their businesses, but not all are able to sustain the growth. Some businesses aren’t even able to handle the pressure that comes with growth. This is one major reason why most of them falter after being in the limelight for a few periods. There is a saying applicable to it which states that “with great power comes great responsibility”. Most people see business growth more as an advantage than a responsibility, that is the cause of major winding downs in businesses. This is worth noting that as businesses grow, the element of risk is usually higher. When such risks occur, it becomes probable that the business owner does not know how to go about it, and as such, may falter in that aspect.
The elements of sustaining business growth are:
· Top talent: without the spanner of a right size, a nut cannot be loosened. The same applies to a business. Once the right top talents who are ready to work are available, it aids the sustenance of growth in an organization.
· Prospecting the right clients: Maintaining a close relationship with the right customers is one of the mechanisms of growth sustenance. Once the right mechanisms to grow are not in place, a business finds it hard to grow at all, let alone sustain it.
· Knowing how to deal with risks: risks are a part of everyday businesses, but once they are not properly handled, it tends to affect the business. Growth itself is a risk, and as such, once it is well handled, it is a tool to sustain growth.
· Sound decision making: Decision making is the backbone of every part of one’s life. Decisions are made in a business, and the ability to make sound decisions is what imbibes growth. Therefore, tro sustain growth, sound decisions must be made.
Business growth in general, is marketing and operational process that happens given a certain set of elements. I hope this article has helped you to create and/or find the elements that you business needs for growing!