Business growth is an increase in the gross or net revenue of a business. Growth is commonly a primary goal of a business that provides motivation to invest, innovate and improve. The following are the common types of business growth.
Increasing your share of a market by improving quality, reducing prices or increasing your brand recognition and image.
New GeographiesIncreasing your distribution to new regions or countries.
New ChannelsIncreasing your distribution to new channels such as retail, ecommerce or vending machines.
Increasing your selling prices by improving quality or perceived quality using branding techniques. For example, an organic cosmetic company that increases its average price by 30% by improving products and packaging.Selling more to your existing customers as opposed to looking for new customers. For example, a consulting firm that is able to double revenue while at the same time cutting the number of total customers. This typically involves careful relationship management and focus on customer satisfaction.
New Business ModelsInventing a completely new market that didn't previously exist with an innovative product or service. This is difficult to do but allows you to take an early lead in a market with no competition. For example, the introduction of the first highly usable smart phone essentially represented a new market for electronics.Selling the same product to a different market. For example, a consumer products company that sells organic soap begins to sell to businesses and governments by repacking the soap for use in public locations such as schools.
DiversificationEntering a completely new industry in which you do not currently operate. For example, a restaurant chain that opens up a hotel.
Horizontal IntegrationOffering new products at the same level of the supply chain in which you currently operate. For example, a manufacturer that decides to manufacture a new line of products.
Offering new products or services at a different level of the supply chain. For example, a food manufacturer that begins to farm its own ingredients.
AcquisitionsBuying another company adds their revenue to yours. This is a type of inorganic growth because it doesn't create new revenue but simply transfers revenue from one firm to another.
InvestmentPutting money into a firm that you do not control can increase revenue in terms of dividends and capital gains that may be recognized as revenue.
Productivity & EfficiencyReducing costs by improving productivity and efficiency can result in net revenue growth.
NotesAn increase in gross revenue is known as top-line growth and an increase in net revenue is known as bottom-line growth.
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