The ultimate goal of every business (small scale, medium scale and even successful businesses) is to grow, whether it’s moving into a larger location or taking your product global, creating a vibrant and successful business that grows from time to time and produces new products, services, sites, and jobs is the ultimate goal of a business owner.
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Various professionals have come up with various descriptions of business growth, however, an alternative definition of business growth is the expansion of a company occurring in multiple ways. Business growth ranges from marketing strategies to business model updates, which shows that there are virtually endless opportunities for a business to grow. In order to achieve this, feasible strategies, plans and objectives that align and complement each other should be put in place and applied to the business.
Every business owner should understand the importance of growth for business success and profitability. However, the most widely recognized reason that growth is important is the increase in profitability that companies experience as a result of sales, which also supplies the company with additional resources.
Types Of Business Growth
- Organic Business Growth
Organic growth is commonly considered the easiest, most recognized and most effective method for business growth, because it focuses on producing more products and services for business success. Businesses that are focusing on or experiencing organic growth may need to acquire a larger storefront to manufacture more products, as such businesses need enough space to accommodate their needs.
Organic growth is considered as the most visible, measurable and tangible company growth, because more products or services are offered and sales increase.
Organic growth is also ideal for new businesses or small-scale businesses entering a new market without adequate inventory. However, it should be noted that an organic growth strategy is not sustainable in the long run.
- Strategic Growth
Strategic business growth focuses on the long-term growth of a business and businesses that should focus on strategic growth must have reached the era of their organic business growth stage and need to find additional markets. A strategic growth strategy may be to reach a previously untapped market through advertising or create additional products to add to inventory.
However, it is important that a business finishes its organic stage before entering the strategic growth stage, this is because the strategic growth stage requires enough resources and sufficient capital to invest in long-term goals.
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This is why it is important for business owners to consider strategic growth, because it ranges from releasing new products for a product line to marketing strategy updates and targeting a specific new market audience.
- Internal Growth
As the name implies, internal growth focuses more on the internal part of business growth. The main purpose of internal growth is to utilize and optimize the company’s available resources. This means that internal is totally different from strategic and organic growth, as it does not look outward to production.
Rather than focusing on outward production and growth, internal growth focuses on utilizing current resources and determining how they can be used better. Internal growth would include a business putting into operation lean systems or automated workforce management systems to achieve business growth.
Oftentimes, internal growth is the hardest, because rather than simply expanding into another market or trying to expand a product line, businesses have to change the manner in which they carry out their business and this changing process can be scary to both employees and managers. Although, internal growth may initially appear intimidating to team members, it is well worth the effort to accomplish optimal usage of available resources.
- Partnership Or Merger Growth
This is generally considered the riskiest growth strategy type, yet many corporations apply it as a growth strategy, this is because, despite the risks involved, it has the highest potential for reward.
This strategy can aid an easier entry into a new market, while expanding an existing customer base, which can make the manufacturing and introduction of new products go much more smoothly.
Another notable benefit of executing a partnership or merger is the potential to help businesses improve and increase the possibility of business success through collaborative efforts.
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