Organic business growth is probably the easiest but also the most productive way of increasing a business’ revenue. Organic growth traditionally focuses on increasing product, service, and space for business expansion. In recent times, however, “organic growth” has come to refer to using technology to automate many business processes, which can then be used to leverage revenue increases. This is an important area to consider as the business world continues to face significant challenges in the areas of environmental impact, energy, and employment. In addition, business owners face significant financial challenges as a result of rapidly falling oil and natural gas prices.
There are three primary strategies for business growth: company strategy, market expansion, and capital expenditures. Strategies related to company strategy involve increasing visibility and market share by building or purchasing other companies. Strategies related to market expansion focus on increasing sales and profits. Capital expenditures, meanwhile, are used to finance short-term debt-to-equity ratios and capital expenditures for long-term projects.
Increasing market share is one of the largest costs for businesses to grow. Many companies with traditional operations face tremendous obstacles in trying to grow even with minimal investment. Other types of businesses, on the other hand, may be able to grow without investing much money at all. Strategies related to market growth, therefore, include methods for growing a company’s current market share while minimizing the costs and risks of capital investment. One of the best ways to achieve both objectives is to build a large customer base or a substantial sub-contracting base.
A key element of a growing business growth strategy is identifying a target customer segment and working to penetrate that segment. A strategy that relies on customer penetration will not be effective if it is not adaptable to changing marketplace conditions. In addition, the same strategy will not be successful if it is unable to change to reflect market conditions.
In most cases, the expansion required to maintain existing market share or gain a new customer segment will not require substantial financial resources. Nevertheless, business growth capital may be required to fund short-term operational expenses. Examples of these include building and equipment repairs, improvements to the sales or marketing offices, leasing and capitalizing new store locations, and the implementation of new advertising and marketing campaigns. Business expansion expenses can be further divided into two categories: direct costs and indirect costs. Direct costs relate to those costs directly related to business growth, such as office rent or supplies, access to necessary facilities, and advertising and marketing fees; while Indirect costs relate to indirect costs associated with expanding and improving businesses, such as inventory acquisition, employee training and retraining, facility improvements, and increased labor and payroll costs.
The first step for most new business owners is to determine their unique situation, as well as how they plan to differentiate themselves from existing competitors. Next, the owners should explore potential options for expanding their business. These options may include acquiring new customers, attracting new employees, diversifying into new product markets, and/or increasing profitability through changes in product mix and price. A number of business development and management companies across the United States offer services that can be customized to meet the unique needs of each client. For many growing businesses, obtaining an independent business growth consultant can expedite the process of expanding into new markets, acquire new customers, or improve profitability.
Once a business has a business growth strategy in place, it is important to regularly evaluate its performance to ensure that the plan is still relevant and effective. Business growth consultants can help by providing evaluations on marketing and management strategies, financial projections, supply chain management, and labor and payroll issues. In addition, business development consultants can assist with creating a written business growth strategy and monitoring and measuring the progress of the plan. Ultimately, a successful business growth strategy should lead to the development of financial resources, which in turn can provide the resources necessary to successfully compete in any given industry.
With the proper management, a growing business can expand its market share and increase its profitability, which in turn can generate more revenue and better profits for investors. Additionally, a business growth consultant can assist in creating marketing strategies that will attract new clients, increase employee production, diversify into new product markets, and/or increase profitability through changes in product mix and price. Ultimately, if a company is expanding, it is crucial to have an independent business growth consultant on hand to help identify and address obstacles that may be preventing the company from expanding. Whether a business is just starting out or is experiencing growth problems, an experienced consultant can help guide the company to greater profitability, increased customer loyalty and engagement, and increasing sales.