Company Growth Strategy: 7 Key Steps for Business Growth & Expansion

A solid business growth strategy is essential for long-term success. Without one, your business can easily be affected by market changes or shifting customer needs. A growth plan helps guide your business, providing direction and focus. Whether you’re a new or established company, having a strategy in place is key to ensuring sustainable growth and success.

Why You Need a Business Growth Plan

Why is a growth plan so important, even for businesses that are already established? There are many reasons, but here are three key ones:

• Funding: Businesses often need investors. A well-thought-out growth plan will help you convince potential investors and secure the funds you need.
• Security: Growth helps create a financial cushion, which can protect your business in times of unexpected challenges, like the 2020 economic downturn that impacted many businesses.
• Credibility: For new businesses, a growth plan is crucial for securing loans and showing the bank that you can pay them back. It sets you up for future success.

In most cases, growth is the main goal for any business. Your decisions should always focus on how to make your business grow and succeed. Below, we will outline a few ways to help you achieve growth.

Types of Business Growth

There are several ways a business can grow. Here are three common types:

1. Organic Growth

Organic growth happens when a business grows using its own resources. This could be improving production efficiency to make more products in less time. The benefit of organic growth is that it doesn’t rely on outside resources or taking on debt. It also helps create more revenue, which can be reinvested into the business for further growth.

Example: Using your profits to buy new equipment that helps you double your production without taking on any debt.

2. Strategic Growth

Strategic growth involves long-term planning, like launching a new product or entering a new market. These efforts often require significant resources and investment. Many businesses start with organic growth to build up enough capital to fund more strategic initiatives.

Pro tip: Strategic growth can be time-consuming and requires dedication. If you’re a small business, consider hiring someone or using a simple platform to manage this growth effectively.

3. Internal Growth

This strategy focuses on improving internal processes to increase efficiency and boost revenue. It’s all about making the best use of the resources you already have. While it can be tough, internal growth often results in streamlined operations and reduced costs.

Example: Automating sales processes with AI or cutting down on unnecessary expenses to run a leaner operation.

4. Mergers, Partnerships, Acquisitions

Mergers, partnerships, and acquisitions are riskier growth methods, but they can lead to high rewards. By joining forces, your business can enter new markets, reach more customers, and expand your products or services. A company’s industry and target market play a big role in deciding which strategies to use. A business can consider options such as:

• Opening new locations.
• Investing in customer acquisition.
• Franchising opportunities.
• Expanding product lines.
• Selling products online across multiple platforms.

Types of Business Growth Strategies:

Businesses can follow several growth strategies. Some may complement each other. For example, a customer growth strategy can align with a market growth strategy.

1. Revenue Growth Strategy

A revenue growth strategy aims to increase business income over a period of time, such as year-over-year. To do so, businesses monitor cash flow, analyze trends, and reduce customer acquisition costs. Businesses may use specific tactics like:

• Sales training programs to improve close rates.
• Leveraging technology to enhance sales forecasting.
• Lower-cost marketing strategies.
• Continuing customer service training to boost retention.
• Partnering with other companies for better promotion.

2. Customer Growth Strategy

A customer growth strategy focuses on increasing new customer acquisitions. Businesses aiming for customer growth might invest in marketing, sales, and customer experience. They might also track:

• Customer churn rates.
• Customer lifetime value (CLV).
• Monthly recurring revenue (MRR).
• Strategies may include:
  • Expanding advertising spend.
  • Opening new locations in untapped markets.
  • Offering discounts or freemium pricing.

3. Marketing Growth Strategy

This strategy involves growing your business by increasing your market share or expanding into new markets. Businesses focus on customer types, regions, or audiences to guide their efforts. Marketing tactics include:

• Rebranding to appeal to new audiences.
• Launching new products for different markets.
• Opening new locations.
• Adopting targeted marketing strategies, such as local or event marketing.

How to Grow a Company Successfully:

1. Use a Growth Strategy Template

Starting a new business or growing your existing company requires a plan. Using a Growth Strategy Template is a great way to keep track of your steps. Studies show that businesses with a plan are 260% more likely to launch successfully and 30% more likely to grow. Take the time to plan your path.

2. Choose Your Targeted Area of Growth

Pick the areas where you want your business to grow. Common growth focuses include:

• Hiring more employees
• Expanding office, retail, or warehouse space
• Opening new locations or branches
• Entering new regions, cities, or countries
• Adding new products or services
• Growing revenue or profit
• Increasing your customer base
• Improving customer acquisition rates

Your growth plan might include more than one focus. For example, increasing sales could lead to more revenue and possibly the need for new locations or staff.

3. Conduct Market and Industry Research

Researching your industry helps you see if your growth idea is practical and necessary. Ways to gather information include:

• Running surveys
• Hosting focus groups with customers
• Reviewing existing industry research

This step will give you facts to shape your goals and timeline, making your plan more realistic.

4. Set Growth Goals

Now, set clear, achievable growth goals. Think about your end goal and break it down into specific numbers and timelines. For example, rather than just saying “increase sales,” you could set a goal to “grow sales by 30% each quarter for the next three years.”

5. Plan Your Course of Action

Outline how you will achieve your growth goals. A detailed plan will help your team understand and support the process.

6. Determine Your Growth Tools and Requirements

Before executing your plan, decide what resources you’ll need. These may include:

• Funding (capital investment or budget allocation)
• Tools and software (for faster growth and insights)
• External services (consultants, designers, etc.)

These tools will help you reach your goals faster and more efficiently.

7. Execute Your Plan

With your plan and resources in place, it’s time to take action. Make sure to:

• Hold stakeholders accountable
• Keep communication clear
• Compare your results to the original goals
• Adjust your plan if needed

Your growth strategy will be unique to your business, but these basic steps can guide you in the right direction.

Growth Strategy Examples:

1. Viral Loops

Some growth strategies depend on users to keep them going. A viral loop is one of these strategies. Here’s how it works:

• A user tries your product.
• They get an incentive to share it with others.
• They share it, and their network signs up.
• New users get the incentive and share it again.

This process repeats itself. The goal is for users to be excited enough to share the product, making it grow on its own. Although it’s not guaranteed to go viral, if it works, it can keep growing nonstop. Dropbox is an example of this strategy, where users get more storage space for each friend they refer.

2. Milestone Referrals

Milestone referrals are like viral loops but with a twist. Instead of offering the same incentive for each referral, businesses give bigger rewards for more referrals. For example, if you refer ten friends, you might get a bigger reward than if you only refer two.

This makes it more engaging and encourages people to keep referring others. Morning Brew uses this model. They reward users with things like stickers, tote bags, and backpacks based on how many friends they refer.

3. Word-of-Mouth

Word-of-mouth is one of the most powerful ways to grow. People trust recommendations from family and friends more than any advertisement. When people are happy with a product, they tell others, and this can lead to new customers. The key to making word-of-mouth work is to focus on creating a great experience for your users. Pete Blackshaw once said, “Satisfied customers tell three friends; angry customers tell 3,000.”

4. The “When They Zig, We Zag” Approach

Sometimes, the best way for a company to grow is by offering something different that stands out from others. For example, imagine your company created an app to help users switch playlists between music streaming apps. Many competitors are making money through ads or paid subscriptions, which frustrate users.

You could offer a unique experience by removing ads and offering a free trial from the start. This could attract customers who are tired of the same problems with other services. The key here is standing out and offering something different to capture customers’ attention.

Example: In the crowded field of online mental health services, companies like BetterHelp and Talkspace are popular. But Octave set itself apart by offering users a platform where they can find therapists that accept their insurance without extra fees. This focus on insurance coverage is what makes Octave different and appealing.

5. In-Person Outreach

A more personal approach can also be very effective. People like interacting with businesses face-to-face. It can help a company grow by creating connections and building trust.

This can include:

• Hosting or sponsoring events
• Attending conferences in your field
• Hiring brand ambassadors
• Any other way to directly engage with your target audience

The main benefit is that in-person outreach cuts through the ad overload many consumers face, making it stand out more.

6. Market Penetration

Market penetration is a strategy to increase your product’s market share. It means getting more customers by either attracting customers from competitors or getting your current customers to buy more.

Example:
Coca-Cola has a 42.8% share of the soft drink market in the U.S. If Pepsi or Sprite wanted to increase their market share, they would need to take customers away from Coca-Cola or other soda brands.

7. Market Development

If a company feels it has hit its limit in its current market, it might turn to market development. This strategy focuses on finding new markets or creating new products to reach a broader audience.

Example:
Uber started as a ride-sharing company but later expanded with Uber Eats for food delivery. It also introduced Uber Freight for shipping and is still growing by offering even more services around the world.

8. Product Development

To keep growing, many companies introduce new products or improve existing ones. This helps attract new customers and keep current ones happy.

Example:
Apple constantly develops new products. For example, they spend billions on research and development every year to improve their devices and keep customers loyal.

9. Growth Alliances

Growth alliances are partnerships between companies that help both grow by combining their strengths.

Example:
Sephora teamed up with Kohl’s in 2020, bringing its products into Kohl’s stores. This helped Sephora reach new customers while Kohl’s attracted more beauty shoppers. Later, Target also partnered with Ulta Beauty, adding dedicated spaces for Ulta in stores, helping both brands grow.

10. Acquisitions

Acquisitions happen when one company buys another. This can help a company grow quickly by getting new products or customers.

Example:
Procter & Gamble started as a soap company but grew by acquiring other companies like Pampers, Tide, and Old Spice. These acquisitions helped Procter & Gamble become a leading consumer goods company.

11. Organic Growth

Organic growth is one of the best ways for a business to grow. It includes:

• Focusing on SEO.
• Creating interesting content.
• Using effective advertisements.

Rather than relying on external factors, organic growth is a long-term strategy that supports steady success.

What we like: Organic growth should always be a part of your strategy, even if you’re also trying other ways to grow. If your business isn’t growing organically, it means something might be missing.

12. Leverage Social Media

Having a strong social media presence is key for business growth. You need to have brand pages on platforms like:

• Instagram
• Facebook
• Pinterest
• TikTok
• X

Social media helps you connect with your audience and makes it easier for potential customers to find your brand. It’s also useful for word-of-mouth marketing, as current customers often share content with their network. Influencer marketing is also growing fast. By 2025, it is expected to be worth $22.2 billion.

13. Provide Excellent Customer Service

It’s easy to focus on getting new customers, but keeping the ones you have is just as important. Customers who are already loyal to your brand can bring in valuable referrals. Great customer service ensures that your current customers remain happy and stay with your brand.

What we like: Keeping customers loyal has one of the best returns on investment, so it’s worth focusing on.

The Key to Growing Your Business

Sustainable, controlled growth is the key to a successful business. Industries are always changing, so companies must adapt. The most successful businesses plan for growth, work for it, and earn it.

Want your business to grow the smart way? At Engage Coders, we help you plan and achieve steady, long-term success. Let’s build your future together. Contact us today to get started!