Your business has been chugging along, growing slowly and steadily. That's all well and good—but now, you want to kick it up a notch. You want to grow explosively. I’m going to share some strategies that may help do that.
But first, there’s one important step that’s often vital to explosive growth:
Laying the groundwork.
We've all heard about companies that got media publicity, or faced a sudden flood of demand for some random reason, only to crash and burn because they didn't have their ducks in a row. Before you undertake any rapid growth plan, it's often important to lay a firm foundation for success. That may include:
- Perfecting your systems and processes. Examine your business internally and make sure your operations are as simple and efficient as possible. By making the most of your existing resources, you may be able to boost profitability—which may help finance your growth plans.
- Investigating financing options. Chances are, explosive business growth will require additional capital. Prepare for this eventuality by exploring your options and lining up any funding you may need, such as a business line of credit or a working capital loan, ahead of time.
- Preparing your team. In order for your business to grow explosively, your employees should ideally be ready to handle the increased demands on their abilities. They also should hopefully be on the same page with you in regards to your ultimate business goals and objectives. It may help to get everyone excited, rather than intimidated, about the company's future.
- Listening to your customers. Listening to what your customers want and need may not only direct your business growth plans, but also provide valuable feedback as you grow so you know whether you're heading in the right direction. This may be important when everything in your business is changing rapidly. If you haven't already done so, consider implementing customer relationship management tools, social listening and customer surveys to help stay on top of how your target market feels about what you're offering.
Ready to start? Here are 7 strategies that may lead to explosive business growth, starting from the least risky and least costly option and moving up from there.
1. Market Penetration
Simply put, market penetration means selling more of what you already sell to your existing market. For example, you might create a goal to get your current customers to use more of your products by upselling, adding more sales representatives to reach out to new accounts in your existing market, or devoting more budget and effort to marketing and advertising to that market.
2. Market Expansion
You might expand your market either geographically or demographically. For example, if you currently sell only to customers in your state, you could aim to expand your market by selling regionally. If your current target market is women, you might expand your market by targeting your product to men, or teenage girls, too.
3. New Product Development
Another way to grow your business may be to develop new products or services to sell to your existing market. Adding related or complementary products or services to what you currently offer may be a great way to build on previous success with your existing customers.
4. Product Development for a New Market
In this growth strategy, you develop new products or services and sell them to a new market. This may be riskier than simply selling new products to existing customers, and may require more of an upfront investment. However, it might also pay off in faster growth.
5. Strategic Partnership
In a strategic partnership (also called a strategic alliance), you form an agreement with one or more other companies to work together toward an agreed-upon growth goal, while still remaining separate businesses. This may enable you to take advantage of the complementary strengths of the partner/s while still remaining in control of your own business. (A strategic partnership is a contractual relationship, but it doesn’t create a new legal entity, despite the term “partnership.”)
6. Joint Venture
One step beyond a strategic partnership, in a joint venture, you actually create a separate business entity together with another business and share in ownership of this new organization. A joint venture may be a good way to enter new markets, develop new products or services and share the risks and costs with someone else.
7. Company Acquisition
Acquiring another company can power up your growth exponentially. In a horizontal acquisition, you acquire a competing company and take it over, immediately expanding your market reach. You can either rebrand the acquired company and take it under the umbrella of your existing business, or operate it under the old brand, depending on the brand value. In a vertical acquisition, you buy a company involved in a different stage of production in your industry. For example, you might purchase one of your suppliers in order to cut your material costs (this is called backward acquisition). Or you might purchase one of your distributors so you can push more of your products into the market (this is called a forward acquisition).
Which one of these seven exponential growth strategies sounds most appealing for your business?
The information contained in this article is for generalized informational and educational purposes only and is not designed to substitute for, or replace, a professional opinion about any particular business or situation or judgment about the risks or appropriateness of any financial or business strategy or approach for any specific business or situation. THIS ARTICLE IS NOT A SUBSTITUTE FOR PROFESSIONAL ADVICE. The views and opinions expressed in authored articles on OPEN Forum represent the opinion of their author and do not necessarily represent the views, opinions and/or judgments of American Express Company or any of its affiliates, subsidiaries or divisions (including, without limitation, American Express OPEN). American Express makes no representation as to, and is not responsible for, the accuracy, timeliness, completeness or reliability of any opinion, advice or statement made in this article.
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A version of this article was originally published on October 8, 2015.