How To Think About Organic Growth

HOW TO THINK ABOUT ORGANIC GROWTH 

The common thread among my clients is a desire to grow their business. Growing profitable revenue can be an elusive goal if you are focused on keeping current customers happy. 

Like many seemingly insurmountable objectives, it gets easier if you break it down into more digestible bites. 

An easy filter to apply is “organic” versus “inorganic” growth. Organic growth, that which is created from within using existing resources, can often be easier, quicker and implemented incrementally, with little disruption to the business. 

Inorganic growth, or mergers and acquisitions, typically requires significant capital and the managerial capacity to undertake the integration of another business. 

For this article, we’ll focus on organic growth and break it down into even more consumable bites. 

1. Selling existing products or services to new market segments 
2. Selling enhanced offerings to existing customers 
3. Creating new offerings for existing markets, and, 
4. Selling into new geographies 

One of the easiest and quickest paths to growth is selling your existing offerings to new market segments. For example, you own a landscaping business and your primary market has been universities and school districts. Expanding to multi-family residential and office parks are natural growth opportunities. Often, nothing new needs to be designed, built or coded. The effort is focused on creating the right messaging for the new audience, generating awareness and pricing correctly. For speed to new revenue, this can be a good place to start. 

Selling enhanced offerings to existing customers can also deliver a quick win. Consider bundling a core offering with a secondary offering at a higher price point. One client added BI analytics on top of its data products and offered it at a premium price. Development costs and time can often be minimal in this type of undertaking. 

Creating new offerings for existing customers builds on the investment already made in a loyal client base. Cost of sales will be low, but the new offering will have to be developed, tested and brought to market. A client that builds portable gas detectors increased revenue by adding accessories such as a multi-unit charging and docking station at minimal cost and risk. 

Finally, selling to a new geography can be a relatively quick path to additional revenue. However, local regulations, unfamiliar competitors, differing cultures and languages and unexpected price sensitivities can all hinder the penetration of new geographies. Be sure to engage local knowledge and resources to ease the introduction to a new locale. 

When considering various growth initiatives, a scoring algorithm that plots ease of implementation against impact to profitable revenue can be a useful tool for choosing which opportunities to pursue first. 

Seneca Rocks Consulting works collaboratively with clients to uncover and exploit growth opportunities and advance the business toward its desired future state. Learn more at senecarocksconsulting.com or contact me at steves@senecarocksconsulting.com.