Every business should have a specific growth strategy in order to survive, progress and earn revenues. Businesses without growth strategies can be hit by unexpected adversity. A growth strategy can be organic or inorganic in nature. While usually acquisition strategies are undertaken by more mature businesses, investors typically look for organic growth numbers to review and evaluate the overall development of a new company.
Organic growth for a business is a balanced and step-by-step technique created through the utilization of its own resources, leading to a sustainable increase in sales and revenues. It is also very important for an organization to maintain symmetry between the values created for customers and what employees add to an organization.
The first and foremost priority for an organization implementing an organic growth model is to earn a profit. By focusing on organic growth, investors can analyze ways through which an organization is meeting its objectives by leveraging internal assets. Organic growth also demonstrates the efficacy of a company in its ability to utilize the skills and expertise of internal resources, thereby creating opportunities for future returns on investment.
Whatever the strategy undertaken, organizations should plan and document every action and create risk mitigation steps to hedge against failure. A well defined business plan is the foundation for defining a growth strategy and goes a long way in helping businesses to identify realistic and deliverable options.
At BPlanExperts we have identified steps that propel organic growth. These include:
- An organization should implement a growth model and set SMART objectives which are understandable to it employees.
- Documentation of all activities to monitor and control progress achieved is essential.
- Organized and uniform delivery of performance in terms of high quality is one of the key features of a successful organic growth model.
- Employee retention and high employee loyalty is important, especially during the growth phase.
- Levels of quality control and customer service are factors that can make or break a venture. These should be analyzed carefully.
- Good PR and advertising for effective communication and creating a positive brand image to drive the business successfully should be implemented, even if the marketing budget is modest.
- Experimentation and taking measured risks are very important to generate growth. Organizations should implement a reward mechanism for new ideas coming through internally.
Unlike acquisitions and merger where the prime focus is on increasing market share through capital infusion, organic growth on the other hand can be a reasonable strategy for businesses to grow slowly without incurring large capital outflows.
Startups surely can focus on organic growth as an alternate strategy to raising capital.