Which Type of Business Growth is Right for You?
As a business owner, it’s natural that growth is always on your mind. In fact, it probably pops into your head around 3 a.m. and has you staring at the ceiling for a while. (Just me?)
But what does growth mean, really?
For some, it’s about scalability – expanding your offerings and client base, along with your team, to meet a new demand. Then, it’s sell, sell, sell. Think of this as growing your business.
For others, it’s about sustainability – innovating within the scope of your business’ existing offerings to continue to meet the needs of those you already serve, focusing on customer loyalty and retention, and on keeping your people happy. Think of this as evolving your business.
Both are appropriate. And as you evaluate your business’ trajectory and what makes sense for you, it’s important to determine the type of growth that aligns with your goals.
Here’s the low-down on scalable vs. sustainable growth:
Scalable Growth 101
Scalability is often what comes to mind when you think of general business growth. Say you start a business selling dog jewelry. (This example is purely coincidence and not at all because Norman would be your #1 customer.)
In your dog jewelry business, you sell bedazzled collars and leashes, pet-inspired charms, and any other jeweled accessory a stylin’ pup might need.
You planned for $2 million in revenue the first year and hit $5 million. In short, business is going well.
As a result, you decide to ramp up production in order to meet the needs of a greater number of dog owners. This includes investing in advertising to broaden your reach, getting a larger warehouse for inventory and hiring new team members.Maybe you then add matching human and pet jewelry, holistic pet snacks, and grow your brick-and-mortar store footprint.
Bottom line: Scalable growth is about doing more of what you already do and then building upon that foundation to increase in revenue, employee size, etc.
Sustainable Growth 101
Not to be confused with eco-friendly practices, which go by the same term, sustainability is about growing from the outside inward. It also means you have an infrastructure, financial plan and understanding of any risk so you can continue to thrive.
Let’s take the same dog jewelry business example. If sustainable growth is your priority, instead of focusing on serving a greater number of customers, you double-down on serving your existing customers exceptionally well. This could include upgrading your jewelry clasps to make them more durable. Or offering a luxury jewelry line for the dog owners who want the most posh pooch on the block.
The outside inward approach means understanding what your customers like (and don’t like), and what they want to see from you. Using this feedback, you can evolve your business to better meet their wants and needs. Through tactics like focus groups and surveys, you can gauge how your customers feel about what you provide and intentionally grow your business with a solid understanding of what matters most to those you serve. And, you can continue to expand your business (in a scalable way!), just at a slower pace that often means less pressure for you and your team.
Bottom line: Sustainable growth is about evolving your business to continue to best serve your customers using a “slower” approach that doesn’t force you to put the business pedal to the metal.
Which Type of Business Growth is Right for You?
Both types of business growth have their place. Here are a few indicators to help you evaluate what type of growth (or both!) might be right for you:
Scalable Growth
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Who it’s ideal for: The business that wants to grow in production, employees and offerings.
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What it’ll help achieve: Greater revenue, larger business footprint and expanded client reach.
Sustainable Growth
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Who it’s ideal for: The business that wants to grow in the way it does business – not necessarily in volume.
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What it’ll help achieve: Consistent revenue, deeper customer loyalty and expanded services/offerings.
However you want to grow (or not!) the foundation of any successful business is its people. It starts with the people who show up to work for you each day. Are they satisfied? Do they know the mission and vision? Then, it’s the people who buy from and support you. Are you doing what you said you would do for them?
Happy growing!
