Business Growth Criteria
Obviously enough, increasing net revenue is the only solid and clear indicator of business growth. At least, this is a prime purpose of initiating a business. And growth is what demonstrates the business's success, competitiveness, and strong market position.
However, financial gains aside, there are a few other aspects evidencing business growth and development:
- Commercial transactions: Sales volume is indicative of your business activity and how quickly you build ties with new customers;
- Gross profit: It’s yet another evidence of your company’s operational efficiency and ongoing performance;
- Workforce: As your business expands, the number of employees will increase accordingly;
- Customer portfolio: Not only an overall number of customers but also the share of regular patrons showing loyalty to your company are of importance;
- Business value: The increasing company’s net value is an indisputable indicator of business growth.
Notably, none of those aspects should be estimated separately. They are indicative only when considered in a combo. More than that, at some point, a company can even sacrifice one area to another to achieve long-term growth results.
For example, you might sign great deals with existing customers to boost your revenue without actually expanding your client base. Or a startup project can operate at a loss at the beginning to build a reliable customer base that will pay off with future profits.
7 Main Reasons for Business Failures
According to researches from Kodjin, to better understand how to make your business a success, first, you need to understand what stands behind the business failures. While there are a whole plethora of reasons why a venture might fail, and we can’t list all of them, we’ll outline the most common ones you should pay attention to.
1. Lack of Marketing Strategy
Many entrepreneurs think that the importance of marketing is a bit overrated. Yet, a proper marketing strategy can become a real game changer. Winning your target audience and knowing how to sell them your products and services are the milestones marketing helps achieve.
2. Disregarded Client Service
To withstand competition, it’s not enough to handle the price and quality aspects only. Don’t overlook customer support. The way you treat your clients speaks volumes too and will give you a competitive advantage for sure. Excellent customer service helps gain customer loyalty no less than a price-to-quality ratio.
3. Scaling Potential Overlooked
Business scaling is not something that can take place immediately or out of a sudden. It should be carefully planned. And this is where a marketing plan pops up again. Efficient planning helps not only achieve intermediate goals, but also pinpoint the right moment for a big change.
When you are not prepared or can’t estimate your business potential, you might miss an opportunity and put your business at risk of failure.
4. Lack of Demand
You might come up with a really great product or service, yet, if there is no need for that on the market, it won’t be a success. That’s why deep market research is a must to detect your niche and find out if there is a place for you in it.
5. No Funds
Big business plans call for money. To receive profit, you need to invest first. You can’t leave it to a chance. Diligent funding and budgeting will show if you can make it and help prevent financial problems.
6. Poor Work Team
Saddling yourself with all the business burdens is the wrong way to go from the start. Yet, surrounding yourself with people that are weak or not motivated enough won’t do any better as well. To achieve success, you need strong support and a smart team.
7. Inappropriate Pricing Approach
While too high prices will alienate customers, too low prices will limit your revenue. Both will negatively impact your business growth potential. That’s why it’s important to seek a balancing approach.
Business Growth Tips
Now that you know business growth indicators as well as what hinders that growth, our tips will flow naturally, and you’ll easier get the hang of them. To further help you structure the info, we’ll break down our advice to:
- Common recommendations applicable to whatever type of business you start;
- Major growth strategies to make your new business move in the right direction;
- The steps to take to make your venture a success.
General Recommendations
These are the core points to keep in mind to start your business on the right foot and drive it to success:
- Self-organization: In a fast-paced modern life, self-organization is a great feature to have. It will help you schedule your activities, stay on top of things, and keep an eye on essential tasks like managing employee spend. Work out a step-by-step plan and stick to it in everything you do;
- Keeping records: Even if you have an excellent memory, you can’t expect to remember and keep in mind all the details. By keeping records, you’ll be aware of your business's current status and even be able to predict or avert certain issues and problems;
- Analyzing competitors: Knowing your competition is important in many ways. Not only will you be able to know if there is a place for you in a targeted market niche, but also you can make use of the competitor’s experience to avoid some mistakes and errors;
- Knowing the risks: If you encounter potential risks, you’ll know how to behave in the worst-case scenario and overcome the upcoming challenges;
- Being open and creative: There are many ways you can improve your business. Just stay flexible, monitor the market, seek new ideas, and don’t be afraid to apply them to your business model. Some extraordinary solutions might turn out a success, even if you don’t expect them;
- Keeping focus: Don’t count that your business will get up steam immediately. It will take time to gain your market share, boost your sales, and generate profit. Hence, it’s vital to stay focused on your short- and long-term goals and don’t let any difficulties break you down;
- Delivering excellent service: As stated above, the lack of diligent customer service is one of the main factors slowing down business growth. By showing respect to customers and giving them the care they need, you’ll make them want to return to you. Thus, you’ll have a strong edge over competitors;
- Working out business habits: Routines might be boring, but they help build habits that will help you expand and grow your business the way you plan. Consistency and stability back up the growth and make a solid base for success in the long run.
Key Growth Strategies to Rely On
General recommendations, set up the vector for your venture growth when you are only at the beginning of your business journey. Meanwhile, growth strategies will help you create an appropriate business model and scenario that will propel and maintain your business growth.
Stay Focused on Your Target Audience
Finding your perfect customer is not an easy task. But once you do, your business will get a solid ground for consistent growth. In a race for new clients, many businesses sacrifice the core audience to newcomers to further popularize their products or services.
However, by concentrating your efforts on retaining and stimulating your core audience that already favors your products, you’ll secure your sales and save on marketing expenses, not to mention building a lifetime customer portfolio.
Besides, to improve your marketing approach and further grow your target audience, you can investigate your core customer base by location, gender, or age.
Also, it is worth considering lead distribution software to reach your target audience successfully. Such solutions do an excellent job of classifying leads and help significantly increase conversion rates.
Favor Long-Term Ties
Contemporary market realia show low levels of customer trust and loyalty overall. Mainly, it happens due to the extreme diversity of goods and services pushing customers to try something new.
At the same time, though, statistics evidence a significant rise in the customer acquisition rate by more than 50%. It means the consumer purchasing power is growing and having a gig of regular patrons on your side will ensure sustainable profit.
So, you should think about how to build strong, long-term relationships with your loyal clients. Discounts, bonuses, free deliveries, and other repayment methods will entice your core audience and make them stay with you.
Set up Your Brand
To stand out from the competition, you need to be noticeable and distinguishable. This is what a strong brand can help you do. So, commit to investing in your own brand supported by:
Recent marketing research has proven that branding helps increase sales by over 30%.
Corporate responsibility makes a huge difference when it comes to brand awareness and brand acceptance. Either you are a customer, or an employee, you will be looking for someone who cares - offering you a better product or service, or thinking a bit more about your well-being at work. Sustainability makes a huge impact on a brand now, too. It’s social responsibility in a company’s real actions.
Hire a Professional Team
No matter how good and experienced you are, you’ll hardly be able to realize all your ideas and handle the business growth on your own. You’ll need a dedicated team of fellow thinkers sharing your views and understanding your business concepts to bring them to life in an efficient manner.
Yet, you should take care not only of hiring qualified specialists but also of motivating and rewarding your team so that they put their best efforts to grow and upscale your business.
When it comes to third-party providers, for example, when developing an online store, you should focus on reviews regarding their performance, expertise, pricing policy, and many other factors. Case in point: there are many Shopify development agencies on the market, but you need to find a genuinely competent and experienced contractor among them.
What Stands Behind a Successful Business
A customer is a major point of focus and a driving force for any business. By investing in your products or services, your target audience makes your business evolves and determines the business's success. There is a strong customer base behind any successful company or venture.
If you can get your clients hooked, retain their trust, and understand what they need to be dedicated to your business, you’ll be able to make your business succeed. And the following steps will help you achieve that:
- Know your customer experience: If you know the impression your clients have of your products and services, it will help you detect the areas for improvement and further level up your quality to ensure consistently high service for your customers as they expect;
- Get some feedback: Take into account what other people say about your business and your brand. Gather customer feedback and trace market tendencies. This will help you figure out your pitfalls and weaknesses as well as further enhance your strengths;
- Be your business leader: You have to grow your own leadership traits to influence opinions, generate ideas, drive your business growth, and guide your business success;
- Maintain your customer trust: Over 75% of customers trace advertisements of the brands they are loyal to. To gain such a level of loyalty, you should always live up to your promises and offer a 100% quality product that will match all your customers' expectations;
- Popularize yourself: In a digital world, it’s easy to spread info and make a statement. Use email marketing, social media, and other digital methods to spread your message and announce yourself to your target audience;
- Create your own platform: A company website is a part and parcel of a corporate image and branded strategy. It will contribute to your business’s credibility and become your own marketing channel;
- Nail down your sales approach: You should be accessible to your customers. They should be able to get in touch with you and get the necessary feedback in mere minutes, no matter if they contact you via phone or try to reach you by email or live chat. Accessibility and readiness to instantly answer customer requests will increase your sales results;
- Implement new solutions: For example, if you incorporate transportation technology solutions into your business and provide lightning-fast delivery of goods, the customer will definitely prefer you over your lagging competitor.
Final Thoughts
There is no single right business growth strategy, plan, or tactic. Every business is different and will grow at its own pace. However, some common practices and recommendations work for all business types and will help you find your perfect combo.
Besides, be open to various approaches. Don’t revolve around a single idea or get hung up on a single strategy. Be flexible, listen to the market and your customers, research your opportunities, and consider different solutions. Patience, hard work, and diligence will eventually bring positive business results.
