Company Growth Strategy: 7 Key Steps for Business Growth & Expansion (2024)

A concrete business growth strategy is more than a marketing effort. It’s a crucial cog in your business machine. Without one, you’re at the mercy of a fickle consumer base and market fluctuations.

So, how do you plan to grow?

If you’re unsure about the steps needed to craft an effective growth strategy, we’ve got you covered.

Table of Contents

• Why You Need a Business Growth Plan
• Business Growth
• Types of Business Growth
• Business Growth Strategy
• Types of Business Growth Strategies
• Product Growth Strategy
• How to Grow a Company Successfully
• Growth Strategy Examples

Why You Need a Business Growth Plan

We know the why is important — so why do we think building a business growth plan is so crucial, even for established businesses? There are so many reasons, but here are three that apply to almost all businesses at some point:

• Funding. Functionally, most businesses are always on the lookout for investors, and you’ll have an advantage if you can present a solid growth plan to convince them. Most expect it.
• Insurance. Growth creates financial padding, like a forcefield to protect your business when unexpected issues crop up. The economic upheaval for brick-and-mortar businesses in 2020 is a perfect example.
• Credibility and creditability. For brand new businesses, getting a loan and making sure you can pay back your bank is at the top of the priority list. There’s no real profit until that debt is managed. Having a growth plan will not only help you secure a business loan, it will be there to refer to so you’ll know what to do to continue making your payments.

For the majority of businesses, growth is the main objective. With that in mind, business decisions are often made based on what would contribute to the company’s continued growth and overall success. There are several methods that can facilitate growth which we’ll explain more about below.

Types of Business Growth

As a business owner, you’ll have several avenues for growth. Business growth can be broken down into the following categories:

1. Organic

With organic growth, a company expands through its own operations using its own internal resources. This is in contrast to having to seek out external resources to facilitate growth.

An example of organic growth is making production more efficient so you can produce more within a shorter time frame, which leads to increased sales. A perk of using organic growth is that it relies on self-sufficiency and avoids taking on debt. Additionally, the increased revenue created from organic growth can help fund more strategic growth methods later on. We’ll explain that below.

Example: Organic growth could be putting some of your revenue aside to purchase a second machine — doubling your production without debt. This increases your ability to take more and/or larger orders. In this way, you create more revenue to invest in a third machine or fund another growth strategy.

2. Strategic

Strategic growth involves developing initiatives that will help your business grow long-term. An example of strategic growth could be coming up with a new product or developing a market strategy to target a new audience.

Unlike organic growth, these initiatives often require a significant amount of resources and funding. Businesses often take an organic approach first in hopes that their efforts will generate enough capital to invest in future strategic growth initiatives.

Pro tip: Strategic growth can be a major endeavor depending on the size of your business. Be prepared to learn a lot, work hard at it, and see slow development. For quicker results, hire someone who knows a lot to work hard at it. Another option is to spend the money on a user-friendly platform that you or an employee can manage. Strategic growth is easily a full-time job for anyone, if not for a team of professionals.

3. Internal

An internal growth strategy seeks to optimize internal business processes to increase revenue. Similar to organic growth, this strategy relies on companies using their own internal resources. Internal growth strategy is all about using existing resources in the most purposeful way possible.

Example: Internal growth could be cutting wasteful spending and running a leaner operation by automating sales with AI, or some of its functions instead of hiring more employees. Internal growth can be more challenging because it forces companies to look at how their processes can be improved and made more efficient rather than focusing on external factors like entering new markets to facilitate growth.

4. Mergers, Partnerships, Acquisitions

Although riskier than the other growth types, mergers, partnerships, and acquisitions can come with high rewards. There’s strength in numbers. A well-executed merger, partnership, or acquisition can help your business break into a new market. You can also expand your customer base or increase the products and services you offer.

A company’s industry and target market influence which growth strategies it will choose. Strategize, consider the available options, and build some into your business plan. Depending on the kind of company you’re building, your growth strategy might include aspects like:

• Adding new locations.
• Investing in customer acquisition.
• Franchising opportunities.
• Product line expansions.
• Selling products online across multiple platforms.

Pro tip: Your particular industry and target market will influence your decisions, but it’s almost universally true that new customer acquisition will play a sizable role.

That said, there are different types of overarching growth strategies you can adopt before making a specific choice, such as adding new locations. Let’s take a look.

Types of Business Growth Strategies

There are several general growth strategies that your organization can pursue. Some strategies may work in tandem. For instance, a customer growth and market growth strategy will usually go hand-in-hand.

Revenue Growth Strategy

A revenue growth strategy is an organization’s plan to increase revenue over a time period, such as year-over-year. Businesses pursuing a revenue growth strategy may monitor cash flow, leverage sales forecasting reports, analyze current market trends, diminish customer acquisition costs, and pursue strategic partnerships with other businesses to improve the bottom line.

Specific revenue growth tactics may include:

• Investing in sales training programs to boost close rates.
• Leveraging technology to improve sales forecasting reports.
• Using lower-cost marketing strategies to lower customer acquisition costs.
• Continuing to train customer service reps to increase customer retention.
• Partnering with another company to promote your products and services.

Pro tip: Revenue for the sake of personal income is often important at the start of a business (to pay the bills) and end of a business (as an enticement while selling the company). But while you look to the future with your company running, it’s wise to use revenue growth toward continued overall business growth.

Customer Growth Strategy

A customer growth strategy is an organization’s plan to boost new customer acquisitions over a time period, such as month-over-month. Businesses pursuing a customer growth strategy may be more open to making large strategic investments, as long as the investments lead to greater customer acquisitions.

For this strategy, you may track customer churn rates, calculate customer lifetime value (CLV), and leverage pricing strategies to attract more customers. You might also spend more on marketing, sales, and CX, with new customer sign-ups as the north star metric.

Specific customer growth tactics may include:

• Investing in your marketing and sales organization’s headcount.
• Increasing advertising and marketing spend.
• Opening new locations in a promising market you’ve not yet reached.
• Adding new product lines and services.
• Adopting a discount or freemium pricing strategy.
• Tracking metrics such as churn rates, CLV, and monthly recurring revenue (MRR).

Pro tip: Remember that it’s about people. Market research tools such as trend monitoring can help keep you aware of what your target audiences are genuinely interested in. This way, you can meet them where they are and get those customer sign-ups.

Marketing Growth Strategy

A marketing growth strategy — which is related, but not the same as, a market development strategy — is an organization’s plan to increase its total addressable market (TAM) and increase existing market share.

Businesses pursuing a marketing growth strategy will research different verticals, customer types, audiences, regions, and more to measure the viability of a market expansion.

Specific marketing growth tactics may include:

• Rebranding the business to appeal to a new audience.
• Launching new products to appeal to buyers in a different market.
• Opening new locations in other regions.
• Adopting a different marketing strategy, e.g., local marketing or event marketing, to appeal to different markets.
• Becoming a franchisor so that individual business owners can buy franchises from you.

Pro tip: The idea here is to get a bigger slice of the pie by growing into already established markets. It differs from market development in that market development discovers or creates new markets instead of finding some space in existing ones. Most businesses are not trying to reinvent the wheel. They’re just getting a spot at the car show.

Product Growth Strategy

A product growth strategy is an organization’s plan to increase product usage and sign-ups or expand product lines.

This type of growth strategy requires a significant investment into the organization’s product and engineering team (at SaaS organizations). In the retail industry, a product growth strategy may look like partnering with new manufacturers to expand your product catalog.

Specific tactics may include:

• Adding new features and benefits to existing products.
• Adopting a freemium pricing strategy.
• Adding new products to the existing product line.
• Partnering with new manufacturers and providers.
• Expanding into new markets and verticals to increase product adoption.

Not sure what all of this can look like for your business? Here are some actionable tactics for achieving growth.

1. Use a growth strategy template [Free Tool].

Download HubSpot’s Free Business Growth Strategy Template

Don’t hit the ground running without planning out and documenting the steps for your growth strategy. We recommend downloading this free Growth Strategy Template and working off the included section prompts to outline your intended process for growth in your organization.

People at the start of their business venture are 260% more likely to launch if they have a business plan and 30% more likely to grow when they have a plan for it. You can still run, but plan your route first!

2. Choose your targeted area of growth.

It’s great that you want to grow your business, but what exactly do you want to grow?

Your business growth plan should hone in on specific areas of growth. Common focuses of strategic growth initiatives might include:

• Growth in employee headcount.
• Expansion of current office, retail, and/or warehouse space.
• The addition of new locations or branches of your business.
• Expansion into new regions, locations, cities, or countries.
• The addition of new products and/or services.
• Expanding purchase locations (i.e., selling in new stores or launching an online store).
• Growth in revenue and/or profit.
• Growth of customer base and/or customer acquisition rate.

It’s possible that your growth plan will encompass more than one of the initiatives outlined above, which makes sense — the best growth doesn’t happen in a vacuum. For example, growing your unit sales will result in revenue growth — and possibly additional locations and headcount to support the increased sales.

Pro tip: Geographical spread is popular right now. In a 2023 Forbes survey, 79% of business owners were focusing on expanding into new geographies. Of small brick-and-mortar and online sellers, 90% are looking to do the same. The business world continues to ramp back up after worldwide shutdowns, finding new openings where some businesses failed during the crisis.

3. Conduct market and industry research.

After you’ve chosen what you want to grow, you’ll need to justify why you want to grow in this area (and if growth is even possible).

Researching the state of your industry is the best way to determine if your desired growth is both necessary and feasible. Examples could include running surveys and focus groups with existing and potential customers or digging into existing industry research.

The knowledge and facts you uncover in this step will shape the expectations and growth goals for this project to better determine a timeline, budget, and ultimate goal. This brings us to step four…

4. Set growth goals.

Once you’ve determined what you’re growing and why you’re growing, the next step is to determine how much you’ll be growing.

These goals should be based on your endgame aspirations of where you ideally want your organization to be, but they should also be achievable and realistic — which is why setting a goal based on industry research is so important.

A SMART example from this Podium article is: “‘Increase customer retention rate by 20% within the next year through customer loyalty programs and improved customer support.’ This goal is specific (increase customer retention rate), measurable (by 20%), achievable (through customer loyalty programs and improved customer support), relevant (retention contributes to long-term revenue), and time-bound (within the next year)."

5. Plan your course of action.

Next, outline how you’ll achieve your growth goals with a detailed growth strategy. Again, we suggest writing out a detailed growth strategy plan to gain the understanding and buy-in of your team.

Download this Template

This action plan should contain a list of action items, deadlines, teams or persons responsible, as well as resources for attaining your growth goal.

6. Determine your growth tools and requirements.

The last step before acting on your plan is determining any requirements your team will need through the process. These are specific resources that will help you meet your growth goals faster and with more accuracy. Examples might include:

• Funding: Organizations may need a capital investment or an internal budget allocation to see this project through.
• Tools & Software: Consider what technological resources may be needed to expedite and/or gain insights from the growth process.
• Services: Growth may be better achieved with the help of consultants, designers, or planners in a specific field.

And then, finally, at long last...

7. Execute Your Plan

With all of your planning, resourcing, and goal-setting complete, you’re now ready to execute your business growth plan and deliver results for the company.

Throughout this time, make sure you’re holding your stakeholders accountable, keeping the line of communication open, and comparing initial results to your forecasted growth goals to see if your projected results are still achievable or if anything needs to be adjusted.

Your growth plan and the tactics you leverage will ultimately be specific to your business, but there are some universal strategies you can implement when getting started.

To expand a business and its revenue, companies can implement different strategies for growth. Examples of growth strategies include the following.

1. Viral Loops

Some growth strategies are tailored to be completely self-sustainable. They require an initial push, but ultimately, they rely primarily (if not solely) on users’ enthusiasm to keep them going. One strategy that fits that bill is the viral loop.

The basic premise of a viral loop is straightforward:

• Someone tries your product.
• They're offered a valuable incentive to share it with others.
• They accept and share with their network.
• New users sign up, see the incentive for themselves, and share with their networks.
• Repeat.

For instance, a cloud storage company trying to get off the ground might offer users an additional 500 MB for each referral.

Ideally, your incentive will be compelling enough for users to actively and enthusiastically encourage their friends and family to get on board. At its best, a viral loop is a self-perpetuating acquisition machine that operates 24/7/365.

That said, viral loops are not guaranteed to go viral, and they’ve become less effective as they’ve become more commonplace. But the potential is still there.

Part of the appeal is that the viral loop flips the traditional funnel upside-down:

What we like: Instead of needing as many leads as possible at the top, a viral loop funnel requires just one satisfied user to share with others. As long as every referral results in at least 1.1 new users, the system continues growing.

2. Milestone Referrals

The milestone referral model is similar to the viral loop in that it relies on incentives to kickstart and sustain it. But milestone referrals add a more intricate, progressive element to the process.

Companies that leverage viral loops generally offer a flat, consistent offer for individual referrals — businesses that use milestone referrals offer rewards for hitting specific benchmarks. In many cases, “milestones” are metrics like the number of referred friends.

A business might include different or increasingly enticing incentives that come with one, five, and 10 referrals as opposed to a fixed incentive for each referral. A company will often leverage this strategy to encourage users to bring on a volume of friends and family that suits its specific business goals.

Example: Harry’s Shave had an extremely successful referral program in place before they even launched that offered progressively more valuable rewards when you referred more friends.

Image Source

What we like: This strategy adds an engaging element to the referral process. When done right, milestone referrals are simple to share with relatively straightforward objectives and enticing, tangible products as rewards.

3. Word-of-Mouth

Word-of-mouth is organic and effective. Recommendations from friends and family are some of the most powerful incentives for consumers to purchase or try a product or service.

The secret of word-of-mouth’s effectiveness lies in a deeply rooted psychological bias all people have — we subconsciously believe the majority knows better.

Social proof is central to most successful sales copywriting and broader content marketing efforts. That's why businesses draw so much attention to their online reputations.

They know in today's customer-driven world — one where communication methods change and information is available to all — a single negative blog post or tweet can compromise an entire marketing effort.

Pete Blackshaw, the father of digital word-of-mouth growth, says, “Satisfied customers tell three friends; angry customers tell 3,000.”

Pro tip: The key with word-of-mouth is to focus on a positive user experience. You need to grow a base of satisfied customers and sustain the wave of loyal feedback that comes with it. With this method, you have to focus on delivering a spectacular user experience, and users will spread the word for you.

4. The “When They Zig, We Zag” Approach

Sometimes, the best growth strategy a company can employ is standing out — offering a unique experience that sets it apart from other businesses in its space. When monotony defines an industry, the company that breaks it often finds an edge.

Say your company developed an app for transitioning playlists between music streaming apps. Assume you have a few competitors who all generate revenue through ads and paid subscriptions — both of which frustrate users.

In that case, you might be best off trying to shed some of the baggage that customers run into trouble with when using your competitors' programs. If your service is paid, you could consider offering a free trial of an ad-free experience — right off the bat.

What we like: The point here is that there's often a lot of value and opportunity in differentiating yourself. If you can “zig when they zag,” you can capture consumers’ attention and capitalize on their shifting interests.

5. In-Person Outreach

While this particular approach was put on pause for a while, it's an effective method to consider. Sometimes, adding a human element to your growth strategy can help set things in motion for your business.

Prospects are often receptive to a personal approach — and there’s nothing more personal than immediate, face-to-face interactions. Putting boots on the ground and personally interfacing with potential customers can be a great way to get your business the traction it needs to get going.

This could mean hosting or sponsoring events, attending conferences relevant to your space, hiring brand ambassadors, or any other way to directly and strategically reach out to your target demographic in person.

What we like: With consumers used to being saturated with ads, in-person outreach shakes things up and will stand out to them.

6. Market Penetration

Competition is a necessary part of business. Imagine that two companies in the same industry are targeting the same consumers. Typically, whatever customers Business A has, Business B does not. Market penetration is a strategy that builds off of this tug-of-war.

Market penetration increases the market share — the percentage of total sales in an industry generated by a company — of a product within a given industry.

Coca-Cola, the most popular carbonated beverage in the United States, has a 42.8% market share. If competitors like Pepsi and Sprite were looking to increase market penetration, they would need to increase market share. This increase would imply that they are acquiring customers who were previously buying Coca-Cola or other carbonated beverage brands.

Pro tip: While lowering prices and advertising are two costly yet effective tactics to increase market share, they are part of a series of methods businesses can use for overall sales and customer retention.

7. Market Development

If a company feels as if they have plateaued and its current market no longer has room for growth, it might switch strategies from market penetration to market development. While market penetration focuses on a company and its current market, market development strategies lead businesses to tap into a new one.

Companies can decide to manufacture new products or find an innovative use for their project. Take Uber. Although few would say that the rideshare company has plateaued, six years after its launch in 2009, Uber launched UberEats, its online food ordering and delivery platform.

The company already had drivers set to take passengers to their destinations. Uber expanded their idea and has become one of the biggest names in the food delivery industry.

Pro tip: Brainstorm adjacent products or services you could offer to expand into new markets.

8. Product Development

For growth, many businesses need to introduce something new. Product development — the creation of a new product or the enhancement of an existing one — allows companies to attract new customers and retain existing ones.

Online fast-fashion retailers are an example of this. A company like ASOS built its brand off of clothing. To appeal to a bigger customer base, it has since added face and body products, a collection made up of ASOS products and other popular brands.

It is now ranked #5 in the U.K. among its competitors with an annual revenue over 1 billion dollars. If an interested customer prefers to shop for their clothes, makeup, and skincare products at once, the brand now serves as a big draw.

Pro tip: While this is one of the most common ways for a business to grow, be sure you’re listening to your customers so you know what they’re looking for.

9. Growth Alliances

Growth alliances are strategic collaborations between companies. They further the growth goals of the involved parties.

Take JCPenney and Sephora from 2006 to 2021. For Sephora, it couldn’t hurt for the makeup retailer to have more stores across the country. JCPenney, however, needed to keep up with powerhouses like Macy’s and its fully-fledged makeup section.

While Sephora contracted with Kohl’s post-2020, and Kohl’s plans to place Sephora in over 1,170 of its stores by 2025, JCPenny learned from that experience. After parting ways with Sephora, JCPenney leaned into its own selection of makeup — JCPenney Beauty — to rival its competitors.

In 2022, we also saw Target forming a growth alliance with Ulta Beauty, planning to create dedicated shop space for Ulta in at least 800 stores. The next year, in 2023, Fenty Beauty teamed up with Ulta Beauty at Target. Rihanna said they made this choice because their brand goal was to get Fenty to as many people as possible.

Pro tip: To make a growth alliance, look for an adjacent business that already serves your target audience (and vice versa) so you both benefit.

10. Acquisitions

Companies can use an acquisition strategy to promote growth. By acquiring other businesses, companies expand their operations by creating new products or expanding into a new industry. One of the more obvious ideas for growth, this strategy offers significant benefits to companies. They allow for faster growth, access to more customers, lower business risk, and more.

Founded in 1837, Procter & Gamble is a consumer goods company known for its acquisitions. It initially started in soaps and candles but currently has 65 acquired companies that have allowed it to expand into different markets.

The list includes Pampers, Tide, Bounty, Tampax, Old Spice, and more. Although its sales dipped between 2016 and 2019, Procter & Gamble’s net sales for 2023 were $82 billion, its best year within the last decade.

What we like: This is an easy (though sometimes expensive) way to grow since the products/services you acquire are already established and come with a customer bse.

11. Organic Growth

As mentioned previously, organic growth is the most ideal business growth strategy. It could look like focusing on SEO, developing engaging content, or prioritizing advertisem*nts. Instead of focusing on external growth, organic growth is a sustainable strategy that promotes long-term success.

What we like: Organic growth should always be part of your game plan, even while pursuing other business growth strategies. If your business isn’t growing organically, you’re not doing something right.

12. Leverage Social Media

Having a strong social media presence can be invaluable to marketing and business growth. Be sure to establish brand pages on all social media platforms like Instagram, Facebook, Pinterest, TikTok, X, etc. Social media can help you increase engagement with your target audience and make it easier for potential customers to find your brand.

It’s also great for word-of-mouth promotion, as existing customers will likely share your content with their network. There has been a huge upswing in the popularity of using social media influencers as well. The global influencer marketing platform industry is expected to reach $22.2 billion by 2025.

Pro tip: Be where your customers are. Research which social media channels are most popular with your target audience and focus your efforts there.

13. Provide Excellent Customer Service

It can be tempting to focus on acquiring new customers, but maintaining loyalty with your existing customers is just as important, if not more so, because they are already convinced and may evangelize for your brand for free. Providing an excellent customer service experience ensures that you’ll continue to keep the customers you have, and there’s a good chance you’ll reap some referrals too.

What we like: Customer retention offers one of the best ROIs, so it’s definitely worth investing in. Check out these strategies to keep your customers happy and coming back.

The Key to Growing Your Business

Controlled, sustainable growth is the key to successful businesses. Industries are constantly changing, and it is the responsibility of companies to adapt to these changes.

Successful companies plan for growth. They work for it. They earn it. So what's your plan?

Editor's note: This post was originally published in March 2020 and has been updated for comprehensiveness.