Business Organic Growth
Mergers and acquisitions are beyond the reach of most small business owners. They’re simply too risky and too expensive. That’s why, for a small business, organic growth is your best and most effective route for business expansion. As you create your business development plan, focus on the elements of organic growth that will help you succeed.
What Is Organic Growth?
Organic growth uses the tools and resources within the company for slow and steady growth. Companies that follow an organic growth model reinvest their profits to expand as they go. Think of organic growth as the tortoise and inorganic growth – that is, mergers and acquisitions – as the hare. Organic growth isn’t as fast, flashy, or exciting as snapping up smaller companies, but it is more reliable and much less risky.
What Are the Methods of Organic Growth?
There are several ways a company can go about growing organically, including:
Creating a new product or service, which is then marketed to existing customers.
If you’ve ever eaten at a Cracker Barrel, you’ve probably browsed around the ‘Old Country Store.’ Maybe you’ve bought one of those giant games of checkers or some old-fashioned candy. This is an example of marketing a new product (or several) to existing customers.
Creating a new product or service, which is used to tap into a new market.
A recent Bank of America survey found that 46 percent of millennial small business owners and 45 percent of Generation X small business owners plan to expand their product or service offerings that cater to a younger client base. Diversification can be one of your best tools for growth.
Selling more of your current product to existing customers.
One of the best strategies for selling more of your product to your existing customers is to bundle. Think about value meals at a restaurant. Consumers could buy a burger and a side of French fries, but why not get the meal deal? After all, it comes with a ‘free’ drink! You can’t buy one egg, even if that’s all you need. It only comes in certain quantities. Could this strategy work for your small business?
Selling your current product to new customers.
Small-scale independent farmers who want to grow their businesses are a prime example of this type of diversification. Have you ever been to the farmers market? These farmers, who typically sell to corporations and food companies, are taking their products directly to the people. They’re still selling fruits, vegetables, honey, and other agricultural or animal products, but they’re accessing a different base.
Innovation, product development, and marketing and advertising are essential to organic small business growth, and this is one of the key ways you can reinvest in your company. For a small business, organic growth is essential to becoming one of the major players in the industry.