Sales at your business venture have finally taken off and it looks like you’ve created a winner—-fantastic! Because you’re ambitious, you’re already thinking about how to capitalize on your success. You’re looking to grow because sustainable growth is the key to maintaining a thriving businesses. But let’s slow down for a minute and talk about how you might grow your venture? Business growth has different meanings and one or more paths can be taken to achieve it. What you’ll need to successfully grow your business is the right growth strategy.

As always, big decisions demand careful thought and you’d be wise to analyze the relevant business metrics and also the marketplace in which as you operate as you ponder the kind of growth you should pursue for your organization. The path to growing your business must fit your marketplace conditions, be acceptable to target customers and enable the venture to thrive within its competitive landscape.

Researching the state of your industry, local business conditions and your marketplace are among the steps you’ll take to assess growth possibilities for your venture. Analyzing your customer base and documenting the rate of its expansion over, say, the past 12-24 months is an obviously important step you’ll want to take, as is studying the pace of sales revenue. Information and insights you discover will shape the expectations and goals for growth and allow you to build a timeline and budget for your chosen growth strategy.

Your business growth plan should be attuned to specific areas of growth. For example, your research and analysis may lead you to conclude that revamping a couple of your B2B services could be expected to substantially increase sales revenue derived from a niche market that you have the credibility and resources to enter. Or maybe relationships that you’ve developed in another city will allow you to grow your client list / customer base by expanding to establish a beach head there.

In many ways, your primary task is to figure out why the business is successful. What market conditions exist or what competitive advantage have you created that enabled the business to thrive? The answer to that question will help you decide the growth strategy to follow. The following are strategies that you might pursue to grow your venture.

Market penetration strategy

Continuing to sell your current products and services to a greater number of customers and in that way scale up the volume of sales revenue derived from your current market. A market penetration strategy is a product market strategy where you achieve increased dominance in the market in which you currently operate. The company grows by increasing market share.

Market expansion strategy

Entering a new market where you sell current products and services. A market expansion strategy means you’ll plan to sell current products and services to a new customer demographic because you’ve maxxed out growth potential in the company’s current target customers. Being able to successfully follow a market expansion strategies you’ll first confirm that you have actually topped out on sales in the current configuration of your market.

Next, research potentially viable new markets, evaluate your ability to reach customers in that market and create a plan to launch. Brand development and customer acquisition will be key components in a market expansion growth strategy.

Product expansion

Launching a new product or service to sell in your current market. The ability to achieve growth for some businesses requires that the company needs to introduce a new product or service. Product development, that is, the creation of a new product/service, or the enhancement of an existing product/ service, enables the company to attract new customers and as it retains the existing customer groups.

Diversification

Launching new products or services to sell to a new market. Diversification can be a proactive way to avoid the fallout of an economic downturn. By offering different products and services, a company can lessen the negative impact of a recession. Pivot to survive.

For smaller organizations, what is technically known as horizontal diversification is most useful. The company will add new products or services to its current line. The products or services may be new, but they often have a similarity to the original product/ service. The company diversifies its line with a clever tweak that expands in a desirable way the options to the customer. You may add a refinement or some sort of updated (or pared down) option that appeals to shifting customer priorities and preferences.

Acquisition

Buying out or taking a controlling interest in another company. Acquisitions are usually only a viable growth strategy if you have excellent cash flow and a generous line of credit at the bank, or a group of deep-pocket investors available. If you have access to money, growing your business through an acquisition is the way to go. You can reduce competition by acquiring a direct competitors, for example. You can also obtain proprietary technology that confers to you a significant competitive advantage. Market share and customer share increase because you capture a new customer base.

To my American friends I wish a happy 4th of July! To everyone, thanks for reading,

Kim

Photo: © Kim Clark June 11, 2021. The James P. Kelleher Rose Garden in Boston’s Emerald Necklace