What is Business Growth? What are the Most Important Growth Factors of a Business?

If you get a chance to sit with entrepreneurs or businessmen, you will see most of them are talking about business growth. At the very basic level, we understand that they are talking about growing their business.

But what exactly is business growth and how does it work? Do we need any special strategies for business growth? Let’s explore it through this article.

In simple words, when a business gets stagnant at a point and the business owner tries different tactics to increase sales and customers, we call it business growth.

In business growth strategies, we try to improve the overall business cycle process to make it more efficient not for internal purposes but also for external purposes.

The business growth cycle is critical for any business that wants to attain more customers and revenue.

Generally, business growth strategies are not developed by a single person; rather it requires a team from different departments of that business to formulate a working plan.

Normally, we take business growth in terms of increasing revenue which is true. But, we don’t consider revenue the only factor of growth for a business. There are so many other factors that define the growth of a business. For example, if any of the following factors is rising, then we will say that the business is growing.

1. Sales
2. Customers
3. Revenue
4. Number of Employees
5. Business Value / Net worth

Some of these factors are not dependent on other factors. For example, revenue can increase even without the increase in the number of customers. This happens when the existing customers show more interest in the product and they buy it more often.

Before working on the business growth, a business or company must establish long-term goals that define the growth. For instance, a company must set a goal to get more share in the market by increasing its customers.

To do this, different types of intensive strategies are used that may include market development, product development, and market penetration strategies, etc. We call this phase an intensive growth phase.

What factors contribute to business growth?

Businesses don’t grow overnights by a single person. It takes the whole team as a fuel that runs the engine of the business. Here are the most important components that can grow any business.

1. Motivated Employees

Obviously, this is the most important factor to have employees and manpower to run the operations of a business. But having hundreds of employees doesn’t mean that a business will grow.

You need a team of motivated employees, not just employees. In other words, to keep employees motivated, you have to have managers who can keep these employees on track so they can work for the growth of the company. Then you need a mechanism to keep your managers motivated.

The motivation chain goes up to the owner so he can be the driving force for employees.

2. Stream of Enough Revenue

No business can run its operations if it is not handling its revenue stream efficiently. Your business needs to have revenue backups so that employees can work in the long term without the worry of losing their jobs.

3. Right Strategy

If you have both the right team and enough funds, business is still not going to grow if you don’t have the right growth strategy. You have to have a strategy that keeps the internal business process cycle smooth and external relations intact.

In other words, you must work on intensive strategies to enter new markets or get more customers from the existing market. This can be done only when you have the right kind of growth strategy.

4. Updated Infrastructure

When you have the right team, the right strategy, enough funds, and the business is growing, then you must keep your company’s infrastructure updated. For example, if you are getting more customers, it means you need to upgrade your warehouses to store more products in advance.

This is how business growth works and this is how we determine whether a business is growing.

Terms Mentioned in this article.

Intensive Growth: https://www.businessstudynotes.com/finance/types-of-intensive-strategies/
Business Process Cycle: https://www.heflo.com/blog/bpm/business-process-lifecycle/