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Steps to Growing Your Business

Steps to Growing Your Business

4/5/24, 9:00 PM

Every business has to grow to stay relevant and competitive.
Business growth refers to the point when a company must explore other options to generate profit.
It involves the steps the business must take to reach its next level.
Growth is influenced by customer trends, new market opportunities, and decisions made by company leadership. It changes how you operate internally and how you market your product externally for the better.
No one factor defines growth. But an increase in any of the following can help determine if your business is growing:

Company value
Number of customers
Number of employees

Most likely you will measure one or more of these dimensions as your main objective for moving your business forward.

Business growth is important because it puts you in a strong position to expand your products and services, boost sales, attract the best talent, appeal to investors, and take advantage of new opportunities.

The type of business growth strategy to adopt to enjoy these benefits will largely depend on what stage your business is at in its journey (e.g., whether you’re starting or are already well established).

1. Introduction Stage
This is the new business stage where your product or services have been recently launched and your company is finding its footing. Sales may be low but are hopefully steadily increasing.
From a growth point-of-view, the main task at this stage is to create awareness for your brand and promote it in such ways that your business is visible to more potential customers.
People tend to buy from businesses they know and trust.

Your job is to attract attention and create familiarity. This can be done by delivering on what's known as the 4 Cs of marketing:
Customer wants and needs. Show your target customers how your product or services solve their problems by clearly explaining what you offer and what problems your product can solve.
Cost. Explain the total cost (e.g., price including shipping and handling) so that people know exactly how much they will pay. In other words, avoid hidden charges.
Communication. Ensure that you have meaningful communication with your customers. In other words, don’t make every interaction a sales pitch.
Convenience. This is mostly for those who post their products online; make it as easy as possible for customers to buy your product or service. Can the customer easily find what they’re looking for on your website? Can they get from a product page to checkout in a few clicks? Are descriptions helpful enough?

2. Growth Stage
In the growth stage, your initial marketing efforts are paying off, and you’re noticing an increase in sales. This might result in better cash flow and profitability.
The challenge now is to increase your market share and become the preferred brand for customers.
In this phase, you have the advantage of existing customers. You can use their experiences to improve your messaging and customer experience.

3. Maturity Stage
In the maturity stage, your business is stable, and income is more predictable. Customers are familiar with your brand, and some have even become advocates. The challenge now is to stay at the top by maintaining market share - the percentage of a particular market served by a particular company.
It indicates how dominant the company is in its niche and what potential it has for growth. This also indicates the strength that the company has in combating the threat of new competitors entering the market.
This might require you to invest in innovation and bring in skilled staff to launch a new product line or features. For example, when faced with the threat of new smartphone manufacturers, Apple innovated by creating the iPad. You will also need to invest more in your brand when your market gets crowded and differentiating on price and features becomes more difficult.

Other companies will likely try to sell similar products and services cheaper than yours. When this is the case, your brand becomes a deciding factor. In other words, people choose your business because they know, trust, and like it.

Nike, for instance, is a global sports gear manufacturing company that sells workout gear and running shoes. Its brand is its edge. Nike knows that customers sometimes struggle for motivation. The company has built its brand around this, inspiring customers with a slogan to “Just Do It!”. Nike’s brand successfully differentiates itself from other big players in the fitness industry.

4. Decline Stage
In the decline stage, product sales and profits start to shrink. Now, the task is to find future growth opportunities. Decline and growth seem like opposites. However exploring ways to expand is crucial to your next product, service, or venture being successful.

Growth happens around new ideas and technologies. Use profits from the maturity stage to invest in research and development, come up with new products and services for a new market, or explore a possible partnership with another company. You might also look to reposition your brand to plot a new path forward.
For example, after suffering a drop in profits, fashion brand Gucci invested in a new CEO and creative director. They repositioned the company from a high-fashion brand with an aging customer base into a sought-after brand by millennials through social media marketing on Instagram. The stage in the business life cycle you are at will influence your approach to growth.

Let’s identify which growth strategy may work best for your business.

Business growth categories falls into four main categories: organic, strategic, internal, and external.

1. Organic Business Growth
Organic growth (also known as internal growth) means expanding your business from within, using your own money, capabilities, and resources.

Growth strategies might include:
- Optimizing how you work to improve how products and services are priced, marketed, and sold (e.g. cutting down on wasted spend or improving workflow).
- Reallocating funds into more profitable activities to boost income and growth (e.g. investing more into marketing high-earning products or services).
- Creating new products and services to offer with materials you already have.
- Organic growth is an effective strategy for small businesses and startups, as it lets you grow sustainably and build on your strengths without taking on debt.

You also enjoy full control of ownership. Unlike a merger or external investment which could mean a loss of control or a shift in company culture.

The money earned through organic growth can be used in strategic growth strategies.

2. Strategic Business Growth
While organic growth looks at what you can do now to help expand your business, strategic growth looks at the future by developing strategies that will grow your business long-term.

External business growth plans might include:

Targeting a new audience
Launching a new marketing strategy
Developing a new product
Introducing new features

For example, a small, local enterprise after being in the business for many years, would want to increase its brand visibility online and in search engines to reach more potential customers.

With the help of an SEO agency companies identify online marketing as a strategic approach to growth. They increase organic search traffic by optimizing their website for SEO and e-commerce, as well as by creating relevant content.

The time, money, and resources that go into strategic growth mean that efforts should follow organic growth. This way, you can invest what you’ve earned to expand before deciding whether or not to seek external investment.

3. Internal Business Growth
Internal growth is about streamlining internal processes to increase revenue.

It sounds similar to organic growth, which also uses internal resources. But instead of focusing on production, internal growth strategies focus on using internal resources purposefully.

Internal growth forces you to look at your existing resources creatively. You don’t necessarily need to invest more time and money into growth. You need to reevaluate what you’re currently doing, and how it can be more effective and profitable.

4. External Business Growth
External growth (also known as inorganic growth) is when your business partners with a similar business to achieve its growth strategy goals. Most commonly, this happens with a merger or acquisition.

A merger is when two or more businesses combine their companies to expand their reach and gain market share from competitors.

External growth gives you access to capital, expertise, and technology to:

Break into new markets
Improve products and services
Access new channels to promote and distribute your products or services
Enjoy the customer loyalty of another brand
Benefit from intangible assets such as brand names, patents, and trademarks that can strengthen your position.

These advantages can be particularly beneficial in the maturity and decline phases of the business life cycle when you need to find new ways to stay ahead of the competition.

However, by committing to external growth, you’ll give up some control over how you run and grow your business.

A potential partner should match your company's values and ambitions. Stakeholders and employees need to get along and work together effectively.

Janet Mbene, Senior Associate Consultant, Modesta Mahiga LLC.

Book a Discovery Call to work with Janet.

"Growth happens around new ideas and technologies. Use profits from the maturity stage to invest in research and development, come up with new products and services for a new market, or explore a possible partnership with another company."

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