Business growth is one concept that has proven difficult to describe in a widely accepted term. The reason behind this disagreement could be because the concept of business growth is subjective. 

Every founder, entrepreneur, and employee have their own idea of business growth. This initial idea  might change after they launch their startups or when they begin working for a company. However, at the very beginning, business people tend to have some expectations of what growth should look like in the company or business they are in. 

What is Business Growth?

Business growth could be anything. It might mean increased profit to one founder. To another, it might mean having a high active user count for their products or services. A totally different entrepreneur might see business growth as positioning their company to deliver a high return on investment (ROI). And finally, some other entrepreneur might look to achieve more than just one aspect of these. 

Whatever the case, true business growth will involve improving the performance, productivity, or general image of a business. 

How To Measure Business Growth

Each of the different aspects of business growth have a specific way in which they can be measured. This is done using business metrics - and there are lots of them. 

An example is that an entrepreneur who is after making profits can employ the gross profit margin business metric. It involves subtracting the cost of goods sold from the total revenue of the company and then dividing the result by the total revenue. 

Similarly, founders who are more concerned about growing their active user count can make use of the active user metric. This helps businesses monitor the number of people who are actually engaging with their application, website, products or services and not just the people who have signed up to use the product or service. 

You can find more details on business metrics and how to apply them here in our article.

The 4 Types of Business Growth

1. Organic Business Growth

Organic growth in a business is tied to the development of physical structures like offices, visible products and other material assets or properties. As you can imagine, this only fits new startups looking to create a presence or mature businesses looking to expand or scale. 

Organic growth usually occurs within a short period of time. The reason for this is that it is costly and so entrepreneurs speed up the growth process in order to avoid prolonged expenses. 

2. Strategic Business Growth

Strategic business growth typically comes after the organic business growth phase. The work here involves planning, rehearsing, and reviewing laid-down procedures or strategies. 

Since physical growth has already taken place, strategic growth sets out to maximise the output of these physical structures. 

3. Internal Business Growth

There is another type of business growth aside from the strategic and organic growth which we have mentioned. It is the growth of internal structures and processes. 

Typically, this internal growth features the implementation of new models or approaches for resource management. It also goes over and beyond to imply the very steps taken in these resource management processes. 

4. Collaboratory Business Growth

In this fourth type of business growth, a company will be caught up with building partnerships and collaborations. It will also work to create a solid reputation among users of its products or services. Overall, the activities in this stage of growth will either make or mar the business’s brand. 

Conclusion 

If you’ve read up to this point, you would agree that organic, strategic, internal, and collaboratory growth are paramount to any business. Founders need to take the time to anticipate for, and measure each of these different types of growth. One of the ways they can do this is by focusing on more specific growth like an increased active user count and then applying relevant business metrics to track their performance with it. 

Of course, getting all this done is no small deal. However, founders can ensure that their old and new businesses develop a product life cycle when they successfully apply this.