In Part 1 we will discuss:
- The Risks and Rewards of Business Growth
Although many of the big companies started out small, the reality is that only a handful of small businesses eventually grow to become big brands.
According to statistics,
- 9 out of 10 startups fail
- As few as 50% of startups survive more than 5 years
- Very few, less than 0.1%, of businesses ever reach 250 million in annual revenue.
Growing a successful business is easier said than done and companies of all sizes face a lot of challenges. If you want your company to be sustainable you need to develop a growth strategy. If a solid plan for growth is what you have you will have a better chance of retaining the customers that you have and increasing the business volume.
If you want to grow your company, you need determination, good business practices, and the application of good business growth strategies. Keep in mind that an effective growth strategy is more than simply envisioning long-term success. You should figure out measurable steps in your growth and then follow them.
Of course, small and medium-sized enterprises (SME) vary greatly in their size and capacity for growth. They have different organisational strengths and management styles although it is apparent that SMEs experience common business growing pains and problems at similar stages in their development.
We are going to discuss the stages of business growth and the types of business growth strategies that can be used by any business to achieve long-term success.
Risks and Rewards of Business Growth
Let’s start with a “business growth” definition. A lot of dictionaries define growth as “an increase, expansion or development”.
Business growth occurs when the business reaches a point where it searches for additional opportunities to generate more profit.
Keep in mind that business growth can come in many forms and you shouldn’t focus only on revenue or asset growth because, in this case, you risk missing out on making efforts that can result in incredible returns. In fact, business growth means a lot of things that include an increase in sales, market expansion, and growth of business value.
Growth is the goal of any business and there are 2 types of business growth:
- Organic business growth is slow and tends to be safer because you are growing naturally just by doing more of what your business is good at. Besides, you have more time for building the necessary capabilities to support your expansion and in turn for that expansion to be managed.
- Rapid business growth is made possible by implementing a successful business strategy. It can be very profitable but, at the same time, it involves certain risks and challenges.
There are plenty of reasons to pursue business growth such as increased revenue, increased importance in the industry, and wider brand recognition. Well-known brands typically spend less time and money on marketing to reach new customers and to keep them. Instead, they can use their funds on service expansion and product innovation. Besides, they can more easily attract big-name clients, top talent, and investors which are necessary for a company’s growth.
Business growth may lead to revenue loss if your decisions are not based on good market research. According to surveys, about 42% of failed startup companies reported a lack of market need as the key reason for their failure.
Other leading failure reasons are:
- failed pivots in products and services,
- hiring wrong team members, and
- legal challenges.
The good news is that most of these growth issues are avoidable.
What should you do to avoid pitfalls or at least minimise the risks of business growth? Your decisions should be informed and based on long-term goals rather than on day-to-day needs. So before making an attempt to expand your business, you should take time to document your expansion strategy and ensure that your decisions are based not on assumptions but on reliable business data.
If you think that this is too complicated for you, you can always rely on professional help from Balanced Business Growth business experts. We can help you develop a business growth strategy that details your specific business goals and defines steps you need to take for meeting those goals. This document can serve you as a road map for decision making and it will help you avoid risks.
Our marketing strategies can help your business grow to maintain optimal return on investment (ROI).
In Part 2 we will discuss:
- The 5 Stages of Business Growth, and
- Business Growth Strategies