The Roots of Organic Growth
14 November 2018
How To Grow Your Business Organically
One of the reasons why this mentality develops is the fact that most executives think about growth in regard to acquisition only. Organic growth may not be a quick profit generator, but it certainly generates more revenue over a longer course of time. Companies should constantly seek strategies to facilitate organic growth as underestimating it will hinder their chances of competing with their business rivals.
Organic growth is considered to be the Holy Grail of marketing. However, finding the right balance in strategies to drive growth is both elusive and counter-intuitive. What offsets most companies to invest in organic growth is the massive upfront investment. Although the acquisitions route might be a little cheap, it results in a lower ROI compared to the organic strategies.
The companies with organic growth will achieve much more than the companies that prefer inorganic growth. A look at the share-price performance of 550 US and European companies clearly suggested that companies with organic growth generated higher shareholder returns as compared to the inorganic ones. There is no particular formula for delivering growth, but experts and analysts have narrowed it down to three fundamental strategies considered to be the roots of organic growth.
Funding and Venture Capital Approach
Most companies can be described as having three broad growth profiles; investors, creators and performers. As per research, 60 percent of these companies focus on designing a primary strategy for their growth. The primitive strategy covers all three profiles. The remaining 40% prefer having three different strategies for these three profiles. Executives that have a large businesses usually favour having a diversified approach while small businesses prioritise sticking with a single strategy. Having a diversified approach offers broader options for growth but consequently, it comes down to a primitive strategy that focuses on a single profile, but covers all three of them.
The Power of Advanced Analysis For Business Growth
The companies that can afford resources to harness the power of advanced analytics will certainly exhibit extraordinary levels of organic growth because they simply know the basics of raising money. The advanced analytics tools do not come cheap, but studies prove that the companies who have adopted these tools enjoy a noteworthy upper hand (roughly 10-15 percent) in organic growth compared to the non-adopters.
Building the right reinforcing capabilities across dimensions like resource allocation, branding, marketing, and growth-oriented culture is the key for organic growth. Developing an understanding of options for activating growth paired with these reinforcing capabilities will have a beneficial impact on the business. The company will also be able to expedite the process of organic growth by building the right reinforcing capabilities.
Our highly-skilled team of qualified organic growth experts can help you achieve new levels of growth by becoming your advisors in terms of acquiring funding and securing venture capital if you are planning to look for investors in the future, or if you are already engaged with similar activities that involve financing and company growth. If that’s the case, then we highly encourage you to read our additional insights when it comes to developing distinctions between Seed VS Series A funding in order to help you decide which path you should choose depending on what level your company is on right now. Moreover, if you’d like to see more content about business growth in general, visit our website https://www.challenge.org and read our articles.