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Are You Planning Organic Or Acquisition Growth?

Just like in your garden growing organically takes a little longerbut it is a sustainable form of growth and companies like Apple have used it to gradually grow their business and client base for the long run.

 

 

Acquisition growth on the other hands relies on take-overs, mergers, and acquisitions. While this form of growth brings an immediate boost to the company it is not a sustainable way of reliable growth.

Small Business Growth Strategies

Your growth strategy should not exclude any options. Your business can benefit from acquisition growth but organic growth should always be part of your company’s overall expansion. A well structured organic growth gives you the ability to acquire assets when your company needs the resources. The acquisitions become part of the organic growth supplementing any deficiency your company is experiencing.

 

Sustainability

Small businesses have a high rate of failure with most of them going out of business in their first five years. This high failure rate is mostly due to unsustainable growth. Inexperienced business owners think they have to always grow no matter what the cost.

This attitude is backed up by:

  • Bad financial management
  • Poor customer service because of high demand
  • Funding unwarranted growth
  • Burnout by owners and employees

Sustainability means understanding the needs of your company and meeting those needs by producing within your capability while delivering what your customers demand.

Organic

Choosing an organic growth approach has its benefits and risks knowing what they are can help you adopt the features that suit your business and eliminate those that might harm you.

Benefits

Online businesses can benefit greatly from organic growth because of the following reason:

  • It is cheaper
  • It supports a creative environment
  • Provides a diverse customer base
  • Better working environment and superior customer service
Risks

The risk associated with organic growth is generally accepted by businesses that use this method of growth. Some of the risks include:

  • Slow growth
  • Loss of market share from competitors
  • Loss of personnel, it becomes harder to keep talented staff is they don’t see growth
  • Not finding new investors

 

Acquisition

If you are aggressive and you want your company to grow at a faster rate this is the way to go.

Benefits

Some of the benefits of acquisition are:

  • Faster market expansion
  • Aggressive earning
  • Better acquisition of quality talent
  • Lower operating costs
  • Latest technology in products and service 
Risks

This strategy carries with it a lot of risks because acquiring new assets and merging with other companies can have unintended outcome in the future including:

  • Liabilities from the acquisitions
  • Difficulty in full integration
  • Customer and personnel attrition
  • Loss of your company in part or wholly

Performance And Technology

The best way to see how your company is growing and determine what is working is by measuring your performance and using the latest technology. Measuring your performance gives you an opportunity to engage your employees and promote competition within and outside of your company. Technology makes your company more efficient by keeping track of your operation, customers and marketing efforts. A business needs a good plan and this plan should include how you are going to grow and at what rate. If you let your product and customers dictate how you grow you will have a better chance of succeeding.

Photo and Video Credits

Sujin Jetkasettakorn / FreeDigitalPhotos.net
DigitalArt / FreeDigitalPhotos.net
Vudhikrai / FreeDigitalPhotos.net
HolmanVctor / YouTube.com
FounderMachine  / YouTube.com

 

Author : Frank Griffin

Frank has been a soldier, a social worker and an insurance agent. Currently he spends his time volunteering and working for NGOs in third world countries, specifically Ethiopia. Writing lets his brain exercise and he loves tackling any subject. Frank enjoys visiting indigenous groups around the world and his goal is to visit as many of them as possible before they end up being tourist attractions.

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