Why does a business seek growth? So that it can serve more customers and earn more massive profits in return.
And why shouldn’t it? Why shouldn’t people engaged with the company reap the returns of the value it adds to people’s lives?
But while business growth is a key aim for most entrepreneurs, it’s not easy. Especially during times like now when the competition is high, entry barriers are low, and economic slowdowns continue to affect all companies.
Ever since entrepreneurship existed, there have been many business growth concepts to explain how growth occurs and what businesses can do. These business growth concepts have been useful, but all of them hit a bottleneck beyond a point.
It’s difficult to classify business growth, especially for the Small and Medium Enterprises (SME) sector in specific stages. They vary by size, management styles, industry, hierarchies, speed of action, market conditions, and more.
But in 1983, researchers created and published a useful framework to document the path which most SMEs follow in their quest for growth.
The Stages of Business Growth
Stage I: Existence
In this stage, the business is mainly concerned about obtaining customers and the delivery of the product or service. It’s constantly trying to grow its customer base, become a viable business, and have enough revenue to exceed the investment that this stage demands.
Such a business is a startup or a small enterprise – one where the owner does everything and directly supervises the subordinates. The key aim is to stay alive, and systems and formal planning are mostly absent.
In this stage, many businesses either close down when funding runs out, or owners leave because they cannot accept the demands of the business (especially seen in the startup), or move to the next stage.
Stage II: Survival
This is where I believe most Indian SMEs are.
The business has proved that it’s a working model and has enough customers to satisfy. It now attempts to generate cash in order to break even or repair/repair its assets that are not optimal.
The company is supervised by one or two managers, but they still carry out the orders of the business owner. Systems development is minimal, and formal planning extends to cash forecasting, at the most.
Companies that stay at this level for the too-long run the risk of facing the same problems as in Stage I. But companies that grow from here move to the next stage.
Stage III: Success
In this stage, the company has attained good economic health and has managers to supervise the duties of various departments. Now, the owner can move in one of two directions – Disengagement (of the owner) or Growth.
At this stage, owners could reduce engagement because they want to start a new venture or pursue other hobbies and interests. However, the business’ success depends on whether it can continue to evolve with the times.
In this stage, the owner takes a considerable risk and reinvests the company’s resources to grow. Among the important tasks are to develop managers to meet the needs of the growing business. Hiring managers should be done with an eye to the company’s future rather than its current condition.
Stage IV: Takeoff
In this stage, the business scales up rapidly. Now, the most important aspects for the owner to consider are:
- Delegation: Can the owner delegate key responsibilities to others in order to improve the efficiency and effectiveness of the business?
- Cash: Will there be enough cash to fund the growth goals of the company? (Only notional or on-paper revenue is not enough.)
Stage V: Resource Maturity
This is when the company has officially turned into a large enterprise.
It has the size, financial resources, and managerial talent to be a formidable force in the market. If it doesn’t innovate and instead avoids risks, it will stagnate while new players disrupt business models of established leaders.
So how does a business move from one stage to the other? While there is no one-size-fits-all answer, here are certain strategies that fuel business growth.
5 Proven Business Growth Strategies
So what strategies work for business growth. What can businesses follow in order to scale in a predictable and efficient manner without compromising on quality?
Here are five tips for business growth.
1. Develop a Long-Term Goal
Without a destination in mind, it’s easy to get lost during the journey. To reach somewhere, you must first know where you want to go.
So the first step is to decide the destination. Build a three-year business plan (objective) and define how you’ll measure it (key results). Track whether your objectives and key results are on track .collect feedback from data and your people, and take action to stick to the path.
It’s easy to lose sight of the prize when the next shiny object appears. But companies that grow stick to their objectives no matter what.
2. Focus on Customer Satisfaction
A business is not a medium to generate revenue and profit. Those are byproducts for performing its core duty: to create and serve a (repeat) customer.
Jeff Bezos, the founder of Amazon, said that customers always want something better, and a company that focuses on delighting them drives itself to invent on their behalf. So if a company wants faster business growth than its competitors, it should constantly measure customer satisfaction and take action to satisfy them grows.
3. Increase Your Traction
In this era of cutthroat competition, a business can no longer afford to wait for customers to “discover it.”
Your business has to market itself to the right customers by showing how your product will best solve their pain points. It’s important to identify your target audience, build a sales funnel to generate leads in a predictable manner, and constantly strive to increase your lead conversion ratio.
Please add the Link of 5 Metrics to Measure Business Growth here after it’s published.
Strive for organic (internal) and inorganic (paid advertising) to increase your customer base and visibility.
4. Keep Improving
Bruce Barton wrote, “When you’re through changing, you’re through.” A company that thinks that it’s done with self-improvement is done.
Customers always have access to new options to address their pains. And they will not always follow the standard path to get their answers. They will adopt new technologies, search for new ways, and sometimes discover innovative techniques to find their answers.
The digital camera got disrupted by a mobile phone company. Facebook’s competitor is not just social media but also Netflix. In turn, Netflix’s competition is sleep.
In such a fast-paced world, can you afford to sit back and feel complacent?
5. Diversify When Needed
Many entrepreneurs fall in love with their products so much that they don’t realize that the market doesn’t need it anymore. No product has unlimited growth potential in the long-term.
Every product has a limited upside before it gets replaced by something else. The only thing that has potential is the market. This is why it’s essential to focus more on the customer’s needs and adopt new strategies when the time comes.
Diversification is an important business growth concept to ensure that you keep market share even at your own product’s expense, rather than sticking to your product at market share’s expense.
10 Inspiring Quotes On Business Growth and Customer Delight
1.“We’ve been fortunate at times. Some of our products are things you might say we’ve just stumbled on. But you can’t stumble if you’re not in motion.” – Richard Carlton,3M
2.“Everyone wants to live on top of the mountain, but all the happiness and growth occurs while you’re climbing it.” – Andy Rooney, journalist
3.“Logic will get you from A to B. Imagination will get you everywhere.” – Albert Einstein, scientist
4.“Going into business is like a hang-glider launch: you’d better do it wholeheartedly, or not at all. if you’re starting a company that will do something cool, the aim had better be to make money and maybe be cool, not to be cool and maybe make money.” – Paul Graham, Y-Combinator
5.“Small business isn’t for the faint of heart. It’s for the brave, the patient, and the persistent. It’s for the overcomer”. – Unknown
6.“Chase the vision, not the money. The money will end up following you.” –Tony Hsieh, Zappos
7.“Treat your customers like they own you because they do.” – Mark Cuban, Dallas Mavericks
8.There are many ways to center a business. You can be competitor focused; you can be product-focused, you can be technology focused, you can be business model focused, and there are more. But in my view, obsessive customer focus is by far the most protective of Day 1 vitality. – Jeff Bezos, Amazon
9.“Customers don’t expect you to be perfect. They expect you to fix things when they go wrong.” — Donald Porter, British Airways
10.“If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.” — Ray Kroc, McDonald’s
What business growth strategies and tips do you follow? Do leave a comment. We would love to hear from you.