It goes without saying that growth is quintessential to the ultimate success of any business.
There is a multitude of reasons for this, for instance in a new business venture without constant growth you have no business, likewise in a mature business, you will always have attrition within your customer base so replacing lost customers and increasing your customer base is also critical.
The Importance of Business Growth
Continuous growth provides additional cash flow and profit which can then be invested back into the business to either pay down debt or take advantage of new opportunities to expand products and services to attract new customers and once again increase sales.
In essence, continuous growth is the arterial blood of any business, without it you will ultimately fade away.
Some Principle Reason for Sustained Growth
- Future proofs you from risks
- Creates economies of scale leading to lower costs
- Reduces the threat of competition
- Allows you to attract talented staff
- Creates greater buying power
- Allows for greater flexibility in times of market fluctuations
The Path to Growth
There is no particular way to generate growth rather it can come from a number of sources which would also form part of the underlying business strategy.
Generally, you may expand your product or service offering, acquire new customers and or increase the spend by the existing customer base.
The principle here is to identify opportunities for growth that can be exploited. To do this you will need to rely on your management reports to understand how your business is performing and what products and or services are performing well or poorly.
Your business strategy should then include the following growth strategies:-
- Increased Market Penetration of Existing Market or Opening up New Markets
- New Product Development
- Diversification into a different range of goods and services to a different customer base than your existing one.
In addition, some other ways you can grow your business are:-
- Acquisition of Competitor or Complimentary Business
- Strategic Partnerships
As can be seen, there are numerous ways to grow your business but importantly sustained long term growth is the key to a successful business and whilst organic growth through natural issues such as price increases it of its own volition the acceptable method of developing a long term growth strategy.