Do You Know How To Spot Healthy Business Growth?
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Did you know, a business will double its size in five years if it grows at a rate of 12–15% annually?
More often than not, growth is the goal of the small to midsize business owner. Growth for each business owner can look different. For one it might mean increasing merchandise sales, for another it could be an increase in service customers. All share a common growth goal- the growth of revenue. In order to manage the full growth potential, we must first identify healthy business growth and how to cultivate it.
“Healthy business growth is key to a successful business. Growth at a rapid pace can result in the downfall of a business if not properly handled.”
To see how your business can reach its growth potential, we must answer the following questions:
- What is healthy business growth?
- How do we identify healthy vs unhealthy business growth?
- How can Sunsett.io help your small to midsize business grow?
What is healthy business growth?
Healthy business growth is business growth at a rate that can be sustained. Every business is unique in their growth patterns and therefore every business will vary in their size and capacity for growth as well.
When setting growth goals, it is important to set realistic goals that align with your company’s capacity for growth. Setting goals that are too overzealous could have adverse effects to your business. Rapid, uncontrolled growth can lead to failure if your company is not able to keep up with the newfound demand.
Healthy business growth allows for a business to maintain its value and creates more personal freedom for the owner.
“Healthy business growth is controlled growth.”
How do we identify healthy vs unhealthy business growth?
To create a successful business, we must focus on healthy growth and know how to spot unhealthy growth.
Three warning signs of unhealthy business growth that all business owners should be cognizant of are business costs growing at a quicker pace than revenue, scaling too quickly, and revenue not recurring. Now that we know the three warning signs of unhealthy growth, let’s dive deeper into each piece.
Growing at a Quicker Pace Than Revenue: As a business grows, the associated costs of owning and operating that business will grow. This is an unavoidable truth that must be accounted for when setting growth goals. This becomes unhealthy when the revenue being brought in by the business growth is not compensating for this increase in costs.
Scaling Too Quickly: When a business scales too quickly, uncontrolled growth occurs. To support growth, there must be a solid foundation set up to accommodate the business operating on a larger scale.
Revenue Not Recurring: In order for sustainable growth, it is important that a business have recurring revenue. If a business is focused on continually replacing customers and clients instead of retaining clients and adding to that foundation, it will be stuck in a constant cycle of trying to replace turnover.
Now that we have learned how to identify unhealthy growth, let’s learn how to identify and cultivate healthy growth. A diverse customer base, the process is in place, customer and partner inquiries and positive feedback are all highlights of healthy business growth.
Diverse Customer Base: Ensuring your customers are coming from a wide variety of backgrounds, industries, demographics, etc ensures your business has a range of leads at your disposal. If client turnover occurs, a wide customer base allows for these gaps to be filled more easily.
Process is in Place: In order to achieve healthy business growth, there must be a system process in place before the growth even occurs. This is one of the main determining factors on if growth will be healthy or unhealthy. These processes should like out how increased cost will be managed, what potential expansion looks like, and how that will be supported, if more support will need to be hired this should be clearly mapped out as well.
Customer and Partner Inquiry: One sign of healthy business growth is an increase in clients and potential partners reaching out to you. Marketing your business is key, but when you begin to see an uptick in outreach by potential customers, collaborations, investors, partners, and more there is clear growth.
Positive Feedback: When your business is receiving positive feedback, that shows that your business is meeting demand, and meeting that demand well. Being engaged with your customer base allows for this feedback to be used to support growth. It can highlight areas of improvement, untapped potential, and unexplored opportunities. Additionally, positive feedback attracts more customers. People are more likely to support and trust a business that has clear praise from past and current customers.
“To create a thriving business, we must focus on achieving healthy business growth and know-how to spot unhealthy growth.”
How can Sunsett.io help your small to midsize business grow?
Simple and easy-to-use tools, like Sunsett.io, are key in helping small to midsize businesses easily and efficiently track their goals and progress.
Sunsett.io provides an affordable option for small businesses to easily set realistic business goals and see their performance updates in real-time. With Sunsett.io, you are able to set realistic goals, make informed decisions for your business and measure success.
Inside Sunsett.io, powerful marketing analytics, data visualizations, personalized insights, and team collaboration tools help to save you time, and resources and grow your business. Sunsett’s personalized insights give businesses quick tips and metric suggestions based on your connected platforms and project goals.
Visit Sunsett.io and start a free 7-day trial and see how Sunsett can help you and your team work more collaboratively and turn your data into actionable insight and help your small business grow with confidence.
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