This concise guide outlines the three key factors and business growth strategies to ensure you grow in a way that is sustainable and creates a solid foundation.
One of the most common things that a lot of people hear when they set up any kind of business is that they need to be focused on business growth strategies. This is certainly true. After all, no one wants a business that just ends up stagnating and staying still. However, one of the mistakes that a lot of business owners make is that they don’t pay attention to the best ways to go about growing their business.
If you’re not expanding your business carefully with the most appropriate business growth strategies — the ones that are right for your particular business stage — then that has the potential to cause some serious problems down the line.
3 key business growth strategies
With that in mind, here are the most important business growth strategies that you can implement to better grow your business.
Know what you do, and don’t, need
When you get past that precarious early stage in your business’s life and start pushing for more growth and development, it can be incredibly tempting to try every single one of the strategies for business growth and throw everything at the wall. However, if you’re not careful, you could end up pushing things into your business that it just doesn’t need.
Something like logistics may become essential for a growing business but if you don’t need full truckloads and entire fleets, it may well be a better idea to work with a company like Compare LTL freight shipping. That’s just one example but it perfectly shows just how important it is to understand that you can’t force things into your business that it’s not ready for.
Plan for the long term
One of the most common mistakes that a lot of business owners make is that they fail to plan far enough ahead. If you’re growing your business and bringing new elements into it, it’s important you don’t just think about how it impacts it in the moment. You also need to think about what kind of impact the ways that you’re growing your business are going to have moving into the future. The last thing you want is to make life more difficult for yourself and your employees in the long run because you weren’t thinking far enough ahead.
Keep an eye on the competition
Your business doesn’t exist in a vacuum. However, far too many business owners put on blinkers and ignore the things that their competition is doing. Paying close attention to your competition not only helps to show you what you could be doing better but it also gives you a sense of the best and worst business growth strategies that you could be using in your business in the future. Think of your competition as a potential glimpse into your future.
Business growth stages
In practice, there are 6 recurring phases in the growth of a company. Each of the 6 phases has its own effects. Effects that, if you recognize them and deal with them correctly with the right business growth strategies, do not lead to the reversal of success, but to lasting success.
Phase 1 – The founding phase
An expert has an idea. They want to set up their own business on the basis of their competence and market knowledge. They are firmly convinced – “… I can do it better than the others”. They start, develop a concept, secures the financing and brings in a few employees. They start their own new company. They know what they’re talking about in their corporate concept. The entrepreneur is the most important employee in this phase. Usually the salesman, production expert, technologist etc. rolled into one. A very good basis for building business.
Their network of contacts is taking effect. They personally convince customers to use their service, they win customers. Business starts and develops, laboriously but steadily. The high level of commitment of the young company is showing the first fruits among customers. The customers are convinced of the new supplier and care for and cherish them. The quality of the business relationship is at a high level and is based on competence, trust and personalities. The main difficulty at this stage is funding. It is (still) secured.
Phase 2 – The first successes
Sales increase in small steps, as does income. The first employees are hired very carefully and critically. All people are involved in almost all aspects of the company. Everyone knows the activities, responsibilities and the importance of others. People are happy about new orders, but also suffer when they fail together. You are extremely ready for action and communicative. The company is running smoothly. The first income can be used for new investments or put aside. The founder feels confirmed.
Phase 3 – The maturity phase
In this phase, often a few years after the company was founded, the first crucial mistakes are made. More employees will be hired. But the increased number of employees is showing the first negative effects, information flows stop. Not yet as dominant as later, but all problems start small. The organization is managed in the same way as before, the necessary change measures are neglected. The increased self-confidence leads to the fact that one also becomes less sensitive when it comes to hiring employees. Quantity takes precedence over quality. The financial implications of any hiring and the importance of further qualifications are often underestimated. The “founder” can no longer do everything. As a result, the company loses its competence in the most important activities.
Phase 4 – The overheating phase
The company grows and grows. It is no longer comparable with the origin from phase 1. The founder no longer knows all employees. It is increasingly “human” in the workforce. The spirit of departure has long since evaporated. The organizational problems caused by the growth have still not been resolved. The only solution that is known is to hire employees. Familiarization is getting worse and worse. There is no time.
Leadership problems are becoming more and more apparent and escalating. But sales keep increasing. So is self-confidence. It turns into high spirits. The grip on the ground is lost. Risk awareness has hit rock bottom. But the impacts are getting closer, even if they are still manageable. Customers drop out Depreciation (scrapping) of material due to mismanagement is increasing, but is not sufficiently taken into account. Or these deficiencies are not recognized, caused by inadequate risk management. The management is happy about impressive sales and nominally high earnings, but neglects to consider that the return is declining. Sales to earnings or growth to earnings are no longer in the positive relationship as they used to be in the preceding phases.
Phase 5 – The collapse
The turnover continues to grow, the return stagnates or even continues to decline. The company’s performance profile is falling. The delivery reliability, the quality and the customer satisfaction decrease continuously. But the company is booming. At first glance, this is a continuation of the success story. But here the company is actually almost a restructuring case.
However, with the advantage that there is still time and money. Since this is not recognized, however, one lives more and more insensitive to spending. “Nothing can happen to the company with this success story”. Unfortunately, the entrepreneur loses more and more close contact with everyday business, employees, customers and problems. Customers feel that the company is no longer what it used to be. Sometimes the reorientation takes place in day-to-day business or only for future projects. A gradual process has been initiated. The entry into phase 6 is well underway.
Phase 6 – The crash
Often the market is solely responsible for these dramatic consequences due to the lack of an overall view. Of course, companies stumble through tough, uncalculated market situations, but many, even most, even survive these phases strengthened if they are vigilant and if they are healthy inside. You have used this high boiler pressure, which suddenly develops in the company, to initiate measures that are long overdue. Measures that other companies have already initiated in phase 3, 4 or 5, when the company had more time and more capital to initiate these changes in an “orderly” manner. Now there is a lack of time, money and often employees.
Conclusion
If there’s one thing you should keep in your mind at all times when you’re trying to grow any business, it would be sustainability in business growth strategies. If you’re not focusing on sustainable business growth strategies then you run the risk of things moving faster than you can handle. Suddenly the pressures of a bigger and more expansive business start to mount up without you having the right things in place to deal with them. This can end up with your business collapsing under its own weight.
