Focusing on business growth is a key business strategy for both the long-term and short-term operation of a business. The growth of business pertains to expanding in more than one way. There is no specific measure for a business’s growth; indications of growth vary between different business models. Growth should be a deliberate effort in order to have a better understanding and control of the business.
Growth strategies for business are reliant on both the internal and external factors affecting the business environment. Some of these factors relate to the political and economic climate, human resources, and technological factors.
One crucial source of business growth strategies is a business plan. The business plan is essential in formulating growth projections and patterns and adjusting the initial plans according to performance and the economic landscape. Conducting a SWOT analysis is necessary for evaluating the strengths and weaknesses of the business and identifying the opportunities and threats affecting the business’s growth.
Data compiled by SBA found that only 66% of businesses survive their first two years of operations, half make it to the fifth year, and only 33% manage ten years. The survival rate for these businesses drops because of either diminished funding, a shrinking talent pool, bad management, or a host of other factors. To avoid business closure or collapse, there are several strategies entrepreneurs can utilize to grow their businesses.
Cash flow management is an integral part of running a business and a significant growth strategy in carrying out business operations. Increasing cash flow facilitates the smooth running of operations and prevents the occurrence of possible interruptions in implementing other growth strategies.
Cash flow problems are attributed as the number one challenge to growing businesses among failed business owners. The key to maintaining steady cash flow in the company is employing the services of cash savvy employees. They play an essential role in recording, tracking, and allocating funds for the growth and development of the business.
Another way of ensuring there is enough cash flow for growth is by finding appropriate funding. One such avenue is through investors like Mark Stevens, who besides finances, also contribute their expertise and industry experience.
Achieving growth in business also calls for carrying out expansionary strategies within the current market and tapping into new markets. These market expansion strategies are aimed at growing your business by increasing your competitiveness in the current market. This can be achieved, for instance, by adjusting prices to a customer-friendly rate and conducting extensive product promotion.
Another approach of applying market expansion strategies to drive growth is by appealing to new demographics and market segmentation to increase your customer base in both the current market and in entirely new markets. This is geared at identifying prospective customers and modeling the ideal customer for your business.
This strategy is dependent on understanding your existing product market. Developing new products for the business should rejuvenate the current performance of its products and services. Adjusting the product development cycle is vital to a business’s growth in its efforts to meet market demand.
Developing new products is also critical in establishing the value of the business’s products and brand.
Diversifying the product and service portfolio of a business has a major contribution to a business’s growth potential. This can be achieved by offering a range of products and services to cater to different customer needs and demands. Diversifying the product portfolio utilizes disenfranchised and special groups to captivate unique customers, and therefore new revenue streams.
Another way you can utilize this strategy to grow your business is by diversifying your workforce. Employing the services of staff from diverse backgrounds and abilities increases workplace productivity and business growth potential by utilizing the different skill sets to complement each employee’s output.
Division of Labor and Specialization
This is another growth strategy aimed at increasing your business’s productivity to drive growth. This strategy involves separating your workforce according to their skills and qualifications and allocating duties depending on suitability and capability. This strategy aids in diversifying and streamlining the production process. Division of labor and specialization also reduces inefficiencies in the workplace and promotes accountability.
One of the factors affecting the growth of businesses is the kind of leadership practice adopted. The type of leadership role assumed in different businesses informs of its professional direction. Leadership roles should be designated to qualified and experienced persons.
Proper business managers should be able to collaborate with support staff in performing day-to-day operations of the venture. They are also responsible for implementing the other growth strategies for the business and guiding the direction of the company towards its goals.
The strategies for growing a business are not limited to marketing efforts alone. When formulating the growth strategies, they can be entirely based on your strengths rather than trying to improve your business’s weaknesses. Other strategies you can utilize to grow your business include acquiring or merging with other businesses that either offer the same services or complement them.