Seven ways to grow your business
There are multiple ways to grow your business. And multiple models that can support your imagination and planning. I use normally a spider model with seven directions of growth:
1. Customers
The most impactful source of growth are existing and new customers. Most companies underestimate the opportunity of deep-sell (more volume of the same product/service) or cross-sell (new or adjusted product/service) at existing customers.
New customers can be found either by market penetration, e.g. attract more customers in the same target group. Alternatively, acquire new customers from adjacent markets, so different target groups.
2. Products/Services
New products are of course a way to growth the business. But product extension, or different versions of the current product could also be possibility for growth. Additional services – either support, implementation, consultancy etc. – could also be an important way to grow, especially if these services are recurring.
3. Geography
Almost all of the Tech Companies that we are involved in service different markets outside The Netherlands. Most founders underestimate the ramp up time and risks for the first results in foreign markets. The most easy way to start is to grow internationally with your current customers.
4. Distribution
Direct sales to acquire the first proof points and customer references is the default for most startups. When growing the business more internationally, most companies are using an indirect distribution model with third parties. These can vary from resellers, implementation partners, marketing partners, lead generators and also OEMs.
5. Business Model
Depending on the product/service of Tech Companies, the business model can vary from a transaction fee, recurring license or service fee, to a pay per usage or pay per user. In addition, using a price differentiation per product (version), per customer, per customer group or other an other variable can also lead to significant growth of revenue and profit..
6. Value Chain Position
Forward or backward integration are also options to grow. These require in most cases more capital with a higher risk exposure. A famous example is the backward integration of Amazon to separate their e-commerce activities from their business of hosting and cloud services (AWS).
7. Other Technological Application
The last option is the develop and market different technological applications. This is the most complex and risky option. Examples are High Tech companies in our portfolio that have developed products with their optical technology for both the Life Sciences as the Industry (Material Sciences).