One similarity among business-owners is the desire for business growth. The growth strategies chosen, however, couldn’t be more diverse. Do you recall Tawanda Nyambirai and the overnight explosion of TN Grill, TN Mart, TN Harlequin, TN This and TN That across the country? Do I also need to mention how, they almost all disappeared overnight again? Have you noticed the slow and steady growth of the Transerve autoparts business over the years? Am I the only one who sees the business continuing on that trajectory for the next few years?
One gets it right, while it does not quite work out as expected for the other. I really want you to get it right.
Business growth or decline can be estimated or recorded through the increase or decrease in some measurable indicator(s) of business size. These indicators can either be the value of sales/revenues recorded in a year, the balance sheet size, net profits realized in a month or a similar metric.
Countless strategies are available for adoption as viable strategies for any business growth. When growing your business empire, you will have to choose between two basic umbrella strategies; (1) organic or (2) inorganic. Organic growth is the process of business expansion by increasing your level of business activity, for example through new product development or expansion of your customer base. Such a strategy will see your level of sales gradually increasing over time. When you grow your business inorganically, you do it through merging with or buying another operating company. Your reported revenue increases almost instantly because you now “own” the revenue of the other company.
Let us take Innscor Africa as an example. In the 1980s, Innscor decided to expand its business by venturing into the quick-serve restaurant industry (Chicken Inn, Bakers Inn, Fish Inn, Creamy Inn etc.). They slowly nurtured that business division until it is the giant we see today, Simbisa Brands. That is an example of organic growth. In 2015, Innscor announced the acquisition of a controlling stake in Transerve, a motor parts distributor with more than 32 branches in Zimbabwe. That is an example of inorganic growth. Organic growth is all about setting up a business operation and nurturing to maturity, whilst inorganic growth is focused on alliances with an already established business entity.
In 2014, Econet Wireless Zimbabwe announced an investment of US$1 million in its Ecosure product through setting up an insurance company called Econet Life. That is an example of organic growth. Alternatively, Econet could have acquired an established and operating life insurance company. Econet Wireless Global acquired TN Bank and rebranded it to Steward Bank. They could have opted, instead to apply for a banking license and set up a new banking entity.
What is it going to be, for you? Organic or Inorganic? That question can not be rightly answered without carefully considering the specifics of your business. However, I have pasted two links which I have found to be the good education on business growth strategy.
After going through the links above, you should now have an idea of what each avenue will involve.
Remember, we can do big things here.