Do you want to grow your business? Of course you do. After all, growth is the key to a successful company and, without it, a business is almost certainly declining. The real question isn’t if you want to grow your business, but how you will go about doing so.
The natural trajectory of a new company is a period of accelerated growth that plateaus once the business matures. Continued growth throughout the life of a business is critical to long-term success but can be difficult to sustain for mature companies.
Especially in the middle market, where we often lack the resources of large multi-national firms and don’t have the flexibility to adapt like lean startups, finding a new way to grow can be difficult.
So how do you grow your company? Whenever I speak to executives, I have them explore their “5 Options for Growth,” a simple, yet powerful tool that helps generate new ideas, organize your thoughts, and create a framework for moving forward.
Your five options for growth include:
- Organic – This is the option you are probably most familiar with; it is growing by adding more customers or selling more products. Simply put: it’s business as usual. There are some creative ways to employ organic growth, such as developing a new product for existing customers or creating a certification class for using your products. Chances are you are probably already doing some of this organic growth, but there are also ways to think outside the box and innovative ways of jumpstarting organic growth. Think about any adjacent markets you could serve or strange new options.
- Minimize costs – While not a strategy for long-term growth, minimizing costs can help improve your bottom line. You may instead have state-of-the-art operations and technology that allow you to improve efficiencies and increase margins while selling your product at market price.
- Do nothing – Sometimes staying the course is the right option for a company, but more often than not, leaders drift into “doing nothing” by accident. No matter how healthy your company is today, you must continually evaluate your current business strategy to ensure your future success. Never continue a strategy simply because that’s the way it’s always been done. Smart leaders understand the need to take a second look at their current strategy and readjust as needed.
- Exit – Most people don’t think about exiting when it comes to growth, but this should be considered. Especially if you’ve hit a plateau or the current market is in decline, it might be time to think about cutting your losses so that other business lines can succeed. Think about how crazy it would be for IBM to continue producing typewriters in today’s digital age of computers and smartphones. Sometimes you have to shrink before you can grow.
- External – External growth involves engaging with companies outside your own. There are nine pathways of external growth including strategic alliance, joint venture, licensing, toll manufacturing, green-fielding, franchising, import/export, minority investment, and acquisition. The advantage of external growth is that it allows you to rapidly grow your business when you’ve reached the limits of organic growth or want to expand outside your current trajectory. Some shy away from this option because they think it’s only for large corporations, but the truth is any company, regardless of size, can benefit from external growth.
Now that you know what the five options for growth are, I encourage you to brainstorm how each option might apply to your company. One of the most powerful thing about this tool is that it help you realize there are a number of possibilities for growing your business, place each option in context so you can fully understand it, and be confident in selecting the best path for growing your company.
- Register for our webinar 5 Options for Growth
- Download the White Paper Nine Pathways of External Growth