A Business Growth Primer

Business growth refers to the increase in a company’s size, revenue, market share, and profitability over time. This can be achieved through a variety of means, including expanding into new markets, developing new products or services, and increasing sales. 

There are two main ways of classifying business growth: organic and inorganic growth. The type of business growth that you choose will determine your business growth strategy.

Organic growth is the easiest and most effective way of business growth. It best fits start-ups and companies that have just entered the market, and it can become less effective for established brands in the long term. Organic growth is the growth a company achieves by increasing output and enhancing sales internally. It can mean physical business expansion, upgrading product lines, producing more goods, adding shifts, or opening a new storefront.

Inorganic growth comes from mergers or takeovers rather than an increase in the company’s own business activity. Firms that choose to grow inorganically can gain access to new markets through successful mergers and acquisitions. Inorganic growth is considered a faster way for a company to grow compared to organic growth. 

Types of Organic Growth

A strategic business growth approach works well for long-term goals and companies that have experienced some organic growth. It involves developing initiatives that will help your business grow long term. An example of strategic growth could be coming up with a new product or developing a market strategy to target a new audience.

Internal business growth is not focused on production but occurs when a company uses its own tools and resources to expand. In many cases, it involves developing new products or services or other developmental strategies. Internal growth can take time since the company must evaluate its growth potential, determine a strategy, and then implement a growth plan. Internal growth is usually sustainable and can help improve the company’s overall success.

Types of Inorganic Growth

Partnering with another company in order for you both to benefit is known as partnership growth. Such a partnership helps companies launch a new product together, produce more goods, grow the markets of both, and enjoy customer loyalty of another brand. Business partnerships connect you with existing companies that have the tools and audience to help you grow. These organizations have spent years building their reputation, and aligning with them in a smart way will enable you to tap into that reputation and give you more of the tools you need to thrive.

Growth through acquisition or merger is a common tactic used to achieve diversification and market positioning. Merging gives two companies the chance to form a stronger foundation together than they would have faced alone. Mergers are also a strategic way to gain access to expertise or new technologies and attract investors.