Achieving business growth is a commendable feat, but now you’re faced with an even more challenging task – managing that growth.
Though it might seem counterintuitive, many businesses struggle more once they are on top than during their ascent. It’s for the same reason many lottery winners eventually go bankrupt – it’s difficult to adjust to new circumstances and make the best of them, even when things are objectively playing out in your favor.
If you don’t have a plan for managing your growth, securing cashflows, and staying on top of an expanding organization, you’re setting yourself up for failure.
Let’s review some proven tactics and strategies to help you stay on an upward trajectory.
What is Business Growth?
Business growth can take many shapes and forms, but at its core, it’s a simple expansion. However, while most outsiders see business growth as wealth accumulation, it’s far from it. It can involve the expansion of revenue, of course, but it’s also the expansion of office space, for instance, product lines, workforce, target audiences, and more.
Profits are usually the last element to be impacted by business growth, which is why this whole endeavor can be so risky.
Despite the potential risk, business growth is still essential. Not because you, as the owner, might want more financial stability but because it’s the only way to:
- Ensure business resilience.
- Lower your costs with economies of scale.
- Mitigate risks from competitors and potential market fluctuations.
Additionally, it’s the only way to improve your business overall, including its products and services, as you will find it easier to attract and retain top talent in the industry.
Types of Business Growth
Depending on how it’s achieved, business growth can be categorized into four main types – organic, strategic, internal, or partnerships/mergers/acquisitions. Let’s take a brief look at them below.
Organic growth is the simplest type of business growth to achieve, as it happens without much conscious effort or pre-determined strategies. Most commonly seen among startups, it occurs when there’s ample demand for specific products and services, so the business needs to expand to provide a large enough supply.
It usually involves expanding to a bigger office or setting up another storefront, improving the product line, and producing more goods, among other things.
Once a business has achieved organic growth, strategic growth is usually the next step. At this point, you will want to start developing long-term business plans and strategies that typically involve breaking into new markets, expanding their product offers, and investing in expensive marketing campaigns to improve brand awareness.
With organic and strategic growth, there are clear growth indicators – businesses are opening new offices, expanding their physical presence, introducing new products and services, and more. Internal growth isn’t quite as obvious, at least not to the outsiders looking in.
Internal growth involves optimizing internal processes, streamlining workflows, and using the available resources more effectively to cut costs and improve the bottom line.
Partnerships, Acquisitions, Mergers
Building partnerships or going through M&As is usually the final stage of business growth. It involves cooperation with another business to the benefit of both.
Businesses that invest in partnerships, mergers, or acquisitions usually do so to create new market opportunities, expand their audience, and produce more goods.
Also, in-house partners will help entrepreneurs with holding businesses fields, for instance, if an entrepreneur finds a tech co-founder, it will become easier to keep up with all tech needs and not to lose attention to other fields during the growth.
Components of a Successful Global Growth Strategy
Regardless of your business’s growth, you will need a comprehensive strategy for success.
The following are just some of the most critical components of an effective growth strategy.
#1 – Establish Growth Goals
It’s never a good idea to set a course for global business growth without clear, concise goals in mind. Though your ultimate goal might be to generate more revenue, you should focus on process-oriented goals and how to achieve them.
Startups and new businesses tend to start with a goal of market penetration. It’s the simple process of establishing a stronger foothold within the current market and boosting sales. You can most commonly achieve this goal by increasing brand awareness, investing in more aggressive marketing, and setting up shops with higher foot traffic.
Market development is about increasing your sales and reaching out to new groups of potential customers, aka expanding your target market. It usually involves widening your reach to new demographics and expanding your geographical area.
Most commonly used together with market penetration or market development strategies, alternative channels such as affiliate programs allow you to enter advertising partnerships with influential individuals and businesses relevant to your niche. As a general rule of thumb, alternative channels are used for exposing your business to new audiences, thus boosting your brand awareness and expanding your client base. Creating a solid content plan can help manage multiple channels simultaneously while keeping your business’ image consistent.
Focusing on market diversification implies developing new products or services for diverse markets. Though diversification, especially international diversification, comes with its fair share of challenges, it allows you to minimize risks and future-proof your business when done correctly.
#2 – Identify the New Target Market
With your main goals outlined, you will need to move on to thorough market research. Identifying your new target market and building a detailed customer persona allows you to
- Customize your products and services to meet your new audience’s needs;
- Create a comprehensive marketing and content plan;
- Start building trust and loyalty as soon as you expand to new regions.
Here are some of the things you will need to consider.
Language barriers can cause serious problems for businesses trying to expand to new markets. Without sufficient knowledge of your new target market’s language and dialect, you could have issues with business document translations, marketing, and even branding. Ideally, you will want to have someone on your team who is a native speaker of your new market’s language.
Just like it is with linguistic differences, having culturally diverse campaigns that reflect your target audience is vital to business expansion.
For example, in 2020, beauty company Estee Lauder faced backlash in China after it was discovered that one of its brands, La Mer, had listed Taiwan as a country on its website. The move was seen as a violation of China’s sovereignty and led to widespread boycotts and backlash. Estee Lauder had to apologize and take steps to address the issue.
The geographic location of your new markets has an immense impact on how you will market your brand and which products and services you will offer. While you might have no issues selling air conditioning units in countries like Slovakia, you might encounter unique problems when attempting to do so in the north of Canada. Additionally, having an email address will not be enough when you start generating more sales. There will be customer inquiries that will be managed easier by phone. Thus, having an international phone number will not only put you on the same level with the competition, but it will help you further communicate with customers that prefer a more human touch to customer service.
Reaching out to young college students requires a significantly different approach than reaching out to senior citizens. You will need to adapt your brand voice and persona to your specific market segments to improve your chances of success.
#3 – Create a New Branding Plan
Once you expand to global markets, you will need to reimagine your branding. After all, branding to appeal to your local neighborhood differs from branding to appeal to international audiences. You will need to develop a comprehensive branding strategy that allows you to stay consistent and gives you enough room to adapt to your new audience’s language and culture.
#4 – Optimize Your Management Systems
The key to successful business growth is a streamlined management system. Everything from how you perform product quality control to how you ensure the safety and well-being of your staff and how you optimize your order management system needs to be fully streamlined and consistent throughout your organization.
#5 – Get an Account with an Export-Import Bank
No business can expand to global markets without some assistance. You will need loans and loan guarantees, financial assistance, insurance, and more. That’s why it’s in your best interest to open an account with an export-import bank, as it will allow you to grow your business without hiccups. Additionally, alternative financing through an invoice factoring company can provide operating capital to fuel international expansion based on your outstanding account receivables.
#6 – Set up an Insurance Policy for the Business
Business owners’ insurance is essential, whether you’re staying put in your local neighborhood or expanding to international markets. It helps protect your business and finances in case of property damage, liability claims, etc.
#7 – Establish Relationships with Distributors
Long before you gain a foothold in a new market, you will need to establish relationships with all the vendors and distributors that can help ensure your success. Creating contracts for businesses can be overwhelming and time-consuming, so you should get started as soon as possible.
#8 – Monitor and Measure Success
Keeping a close eye on how your brand is performing in new environments is critical. Establish your key performance indicators (KPIs) and start monitoring your financial health, operating expense ratio, customer satisfaction, and more. Marketing strategists and business analysts prefer to use SQL to count the KPIs from data stored in relational databases to make the process easier and faster.
#9 – Be Consistent with Optimizing Your Business Growth Strategy
A business growth strategy isn’t a one-time deal. It’s a process. You must keep adapting your strategy, monitoring your performance, and researching your markets. Another important thing is to stay agile and respond to market changes as soon as they happen if you want to ensure long-term success.
What are the Benefits of a Global Growth Strategy?
Global growth strategies carry certain risks. They can be expensive and time-consuming without guaranteeing positive results.
Still, there are too many benefits to business growth to be ignored. You will gain access to new and exciting markets, attain a competitive advantage, appeal to the top global talent, minimize your risks, and ensure the utmost business resilience. Of course, you will also get a chance to boost your profits, making any risks well worth it.
Expanding to a global market isn’t the end of your journey. If you want to stay on top, you will need a comprehensive expansion strategy that helps you manage your growing business and ensure it thrives.
The more time you invest in building your strategy, the easier it will be to manage your rapidly-growing business and avoid the “lottery curse.” Don’t let your success pull you down. Control your business growth and build a brand to remember.
Oliver Stasinszky is an outreach team lead at LiveAgent, with an e-commerce and customer service background. Passionate about writing, reading, and learning how to play any musical instrument he comes across.