New business applications increased by 20.6% between 2020 to 2021, according to a report released by the US Census Bureau. As more entrepreneurs sought new opportunities by starting a business, some saw remarkable growth. For example, e-commerce retailers and food delivery services soared during the COVID-19 pandemic.
If your business didn’t grow during the world reshuffle, it doesn’t mean you missed your chance. All business managees can attain a new level of success by implementing the right growth strategy, whether that’s offering a better service or product, or targeting a new market altogether. To help take your business to the next stage, we will dive into what business growth looks like, types of growth strategies you can adopt, and show how to determine whether a company is ready to grow.
What is business growth?
Business growth is the pursuit of improving and moving the dial on a company’s profitability and future. Growth can also lead to reinvention and scalability. A dramatic example, Netflix, which started as a rental DVD service in the late ‘90s, shifted to streaming content and now is one of the top home entertainment providers. That said, your business is likely not competing in the same industry, therefore you may consider other ways toward business growth, such as:
A freelance web designer converts their stable and successful one-person business into a bustling agency.
An eCommerce seller sets their sights on expanding their product line, offering new merchandise.
A founder focuses on boosting their company value and is motivated to bring in new investors by the end of the first year.
At the same time, you need to determine which metrics best represent your business growth. Here are some ways to measure growth:
Opening new branch locations
Gaining more clients
Increasing product sales
Steady revenue growth
Accumulating social followers
Seeing positive cash flow
Bringing in new investors
Some of these milestones may take longer to meet, especially if your company is still in the early stages.
To set the right pace in reaching your business goals, it’s important to be honest about your starting point in the process. Do clients want more of your products that are constantly out of stock? You might need to invest in faster delivery.
Make sure you consistently report this information in your business plan. Even as your goals change over time, it’s crucial to track them and chart a path toward gradual business growth.
Why is business growth important?
It’s easy to become complacent when business feels good and safe. However, you might not be able to afford taking a “business as usual” attitude as your industry grows.
Some of the fastest growing industries in the United States are in food and beverage, real estate and health care. If your market is poised for growth, you need to capitalize on relevant small business trends and shifts to stay competitive.
You can also achieve growth through practices like investing in customer acquisition, rewarding your staff with raises, and adding more value to current client relations. Essentially, business growth lets you accomplish more for your team, customers and yourself.
Pro tip: Wix Enterprise is a platform that provides businesses with an all-in-one solution for all types of growth. Create high performing websites for your business using business software and run them from the Wix mobile app, all of which is backed by enterprise-grade security as well as expert support to help you manage and scale online.
Decided to take the next step in your growth plan? Here’s an overview of the most common types of business growth strategies to implement:
Types of business growth
01. Market development
Market development is a common business growth plan designed to identify new market segments for current products. Small businesses can attract unaddressed markets within targeted segments.
For example, new markets can be defined through geographic segmentation, or splitting up a market based on location. People from a certain place will share similar needs, wants or cultural considerations. In turn, businesses and brands can target an area with more relevant messaging. Another way to segment a market is using demographics, with subgroups formed by age, gender, occupation and even marital status.
02. Market penetration
Unlike market development, this business growth plan is not about breaking into a new market but instead digging deeper into an existing market, and avoiding opportunity costs.
Let’s say you run an online store for pet food. While customers may already go crazy for your inventory, the following strategies will not only improve customer loyalty, but they could also increase website traffic:
Free one-day shipping
Subscriptions and auto-renew deliveries
That said, offering higher-quality products or services at higher prices could also help you penetrate a more valuable client segment.
03. Product development
As a business owner looking inwards for business growth, product or service expansion may elevate your company to new heights. You can approach this growth strategy in a number of ways, including:
Creating new products as demand grows for them
Tweaking existing products with the help of user feedback
Discontinuing underperforming products
At this point of your business growth plan, you may need to take cues from your customers and adjust accordingly. If you can provide them with everything they want, and it makes sense for your business, they won’t look for another provider to fulfill the rest. Effective product development can help you reach hypergrowth and scale your business even quicker.
Pro tip: If you’re developing a new product that’s in high demand, you can advertise it for pre-sale and start raising money for it before the product’s ready.
04. Mergers and acquisitions
You can look at this growth strategy in two ways: First, a larger company acquires yours. You make a huge profit and can walk away to start a business again. Or you acquire a company with a competing or compatible product that helps you enter a new market or eliminate your competition. While freelancers or service providers don’t usually acquire companies, it might make sense for a vendor or a software company.
On the other hand, you can also merge with another company and expand your market share. It could be a risky move to combine two companies into a new entity, but not if you research the company and the market opportunity it presents.
For small business owners, freelancers and service providers without a ton of capital, forming a mutually beneficial relationship with another company can be a viable growth opportunity. As well as a crucial part of your business development plans.
Furthermore, it won’t just boost your profits. The partnership will also improve your offering’s value, so your customers or clients walk away winners, too. As for who you partner with, it’s up to you. Just make sure it makes good business sense.
For example, a freelance web designer could partner with a copywriter to offer clients beautiful websites with professional messaging. When you partner with another business, it’s also a great way to earn more clients at lower customer acquisition costs, such as through referrals.
Diversification is about expanding into a completely new market. Companies consider this growth strategy as a way to reinvigorate business by developing new products or adding services to existing ones. It's also a good way to hedge against potential economic disruptions, such as the ways inflation can affect small businesses.
Joy Cho, founder and creative director of the successful lifestyle brand Oh Joy! spoke with Now What? about her company’s own business growth through diversification. Her business growth is a result of “two-thirds” selling licensed products at Target (home decor, baby and nursery, and furniture collections), plus another portion from her writing (adult books, kids books and her blog).
07. Alternative channels
More businesses explore alternative channels such as progressive web apps (PWAs), mobile apps, Facebook Business pages, Google My Business pages and Instagram Shop to grow their business. Alternative channels have proven useful in reaching new customers, staying in touch with existing ones and engaging with your target audience.
Many online businesses have also begun to offer a mobile app in addition to their website. With Wix, you can operate and grow your business with the Wix Owner app, a multi-functional app for marketing, managing bookings and live chatting with customers throughout the buyer journey.