Types of Business Growth
A stagnant business is doom for failure. Just like anything in life, anything that remains in the same place and does not progress is sooner or later will turn into failure. Whatever type of business you have whether it is a small business or a multi-million dollar company its success or failure depends upon the strategy you employ for it to grow. According to a credible author, there are two types of business growth strategies.
Internal growth strategy and external growth strategy, integration of both internal and external growth strategies is vital to the overall development and continued reaping of the revenues.
How does integration of the two strategies done? How to integrate the two strategies for business growth?
Prior to the integration of the two strategies, it is first important to differentiate the two. A definition or a brief discussion of internal and external growth strategy is the first order of business. Internal growth strategy is simply explained in looking at the innate traits or aspects of a business. These are the employees, the structures and the products that your company or business offers. Reinvesting in these aspects of business does not promise immediate results or returns for the investment made. It only offer a potential return of the investment made. Internal growth strategies do not increase the size of a business. The investment to internal growth is based on the potential return of the investment made.
External growth strategy on the other hand is the expansion or the increase in the size of the business. This may be accomplished by the use of strategic mergers and acquisitions. These may also include the franchise of a business. The external growth strategy is based on the rationale that an increase in the company or business’s size will also increase the opportunity for returns of the investments. Unlike the internal growth strategy, external growth strategy yields immediate results or returns of the investments made.
How to Integrate Internal and External Growth Strategy for a Sales Industry?
For a service related business the internal growth may be focused on the increase in the number of the workers and the development of advancement to increase the productivity of or the work output for a specific amount of time. The increase in the output for a specified amount of time will increase the earning potential of a company or business. External growth may be utilized by outsourcing the work to other workers or subcontractors.
For a sales related business, internal growth may be utilized by enhancing the products you are offering, and the infrastructure that the company or uses. Franchising on the other hand is the external growth strategy that may be utilized in a sales related business.
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