Business growth is an important factor in start-up success – find out the strategies you can use to drive growth and how to write a plan that helps you achieve your objectives.
For most businesses, growth is vital to their long-term success and survival.
Without it, your operations may stagnate, your sales could decline, and you might lose your start-up’s advantage to competitors.
Why is a business growth strategy important?
In the early days of starting a business, some entrepreneurs focus on organic growth by using their own internal resources and operations.
More established businesses can continue to use an organic growth strategy – but it is often not enough as it’s slow and can leave your business open to losing market share to competitors opens in new window.
Instead, inorganic growth can drive faster expansion through, for example, taking on external funding opens in new window and investment.
To achieve business growth, a strategy is important.
It helps you define your goals and ambitions and ensures you have all the resources and help required to fulfil your objectives.
Key business growth strategies
There are various common business growth strategies that start-ups can adopt, such as:
Also known as market development, market penetration involves selling more of your current products or services in your existing market and increasing your market share.
This could be selling to more customers or increasing sales opens in new window among your existing customers.
Examples of methods for achieving market penetration are reducing your prices, promoting special offers and promotions opens in new window, selling through new channels such as online marketplaces opens in new window, and targeted advertising opens in new window.
Product or service development
This involves launching new products or services or adding new features to your existing products or services and selling them in your existing market.
This growth strategy involves selling your existing products or services to a new market of customers, such as those in a different location or part of a different demographic.
Growth by diversification is selling new products or services in new markets that your business isn’t already operating in.
This can help your business to increase revenue but can be seen as a potentially risky strategy as it involves both a new market and new products or services.
To support successful diversification, it can be a good idea to conduct detailed market research opens in new window and testing to ensure there is a market for your new product or service and you fully understand how to operate in it.
Improving customer service
It’s often said that it’s more expensive to attract a new customer than keep an existing one, so it can be a good idea to focus on how customer service opens in new window can help to grow your business.
Consider ways to regularly assess the way you deal with customers opens in new window and make any improvements that may be required.
Ensure that complaints opens in new window are dealt with promptly.
Offering exceptional service and exceeding expectations could help to ensure customer loyalty opens in new window and increased sales.
It could also encourage existing customers to recommend your business to friends and family.
Other ways to grow your business
There are different growth strategies companies can explore, including:
The franchising process opens in new window involves allowing other people to use your brand and run it as their own business in return for a fee.
Well-known franchising examples are Subway and McDonald’s, but it can work for smaller businesses too.
Buying another company can be a way to grow your business quickly.
It can provide access to new products, markets, customers, and staff.
You can also consider buying a franchise opens in new window.
Working with other businesses with complementary target audiences can help your business expand its reach and attract new customers.
What to include in a growth plan
A growth plan should set out your business targets, goals, and ambitions opens in new window with an outline of the actions and strategies you will use to achieve them.
Points to consider including in your growth plan opens in new window are:
A critical factor in your growth strategy is knowing how many customers you want to attract to your business and the marketing tactics opens in new window and techniques you will employ to reach them.
Outline in your growth plan the marketing channels you intend to use to engage your target audience, such as social media opens in new window, public relations, search engine optimisation opens in new window, email marketing opens in new window, print marketing, and advertising opens in new window.
Your growth plan should assess your current employees opens in new window and ensure they are in the right roles to meet your goals.
It can be worth considering how to identify what further skills training is needed for your existing workforce and whether any new staff members opens in new window are required.
Your growth plan could include an overview of your finances so that you can help ensure your business is financially stable enough to achieve your growth objectives.
You can also use it to identify if external funding is required to meet your business goals.
Accessing finance can help your business fund its growth strategy.
Options you could consider exploring include:
Start Up Loans
Businesses trading for up to three years can access a low-interest personal loan of up to £25,000.
Once you’ve secured a Start Up Loan, you may be able to get a second loan that you can use to grow your business.
Learn more about a Start Up Loan opens in new window.
Other debt finance
A grant opens in new window is funding for a specific purpose, such as business growth activities, that you don’t need to pay back.
Grants are provided by public and private sector organisations.
This involves selling shares in your business to investors in return for funding.
Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.
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