For many business owners, growth is their primary goal. They believe that scaling up their operations will help increase profits and secure the future of their business or brand. Some also believe a bigger business will be easier to manage, with more resources available to shoulder the workload.

However, there is growing research – like this Queensland University of Technology study – that shows there is no direct correlation between growth and profitability. In fact, evidence suggests that businesses focusing on profitability are more likely to achieve long-term growth than those actively pursuing growth.

One of the main reasons for this is that businesses that are focusing on growth often do so at the expense of quality. They prioritise investments (of both time and money) that will increase scope and scale, and often lose sight of what made the business great in the first place. This, in turn, reduces productivity, alienates customers, and can even jeopardise the future of the business.

Conversely, businesses that are pursuing profitability are usually looking for ways to be better at what they already do. Whether it’s through finding operating efficiencies or increasing customer engagement and loyalty, their investments are generally designed to further build their brand.

If your goal is to grow your business, you should carefully consider how you define success. Whether it’s increased revenue, a larger geographical footprint, or a bigger customer base; knowing why you want to grow will help inform your investment decisions.

Once you know your goal, you need a comprehensive and carefully considered plan. This should outline your approach to:

  • Hiring the right people: Resourcing can be one of the biggest barriers to growth. However, the need for additional people – particularly in senior roles – should not override good recruitment practices. It’s important that whoever you bring into the business shares its goals and values, as a bad hire can be very costly in the long-term.
  • Building your market: While it may be tempting to quickly broaden your target market, this will usually reduce the effectiveness of your advertising. Remember who made you the success you already are, and focus on growing that audience.
  • Expanding your footprint: A bigger business needs a bigger space, right? Before investing in new shopfronts, factories, offices, or even online markets, do your research and make sure it will deliver the greatest possible bang for your buck. Also, consider the ongoing costs of new locations (utilities, etc.) and any additional tools required.
  • Maintaining standards: Whether you’re in heavy industry or professional services, the quality of your offering will be the greatest determinant of your success. When there’s more people in the business and you’re serving a larger customer base, how will you make sure your products and services remain consistently the same?

A strong business relies on more than one thing to be competitive. Similarly, businesses that are looking to grow need to focus on more than just size to be successful – they need to find ways to use size to reinforce their existing competitive advantage. If you would like to explore ways in which to capitalise on your competitive advantage, whilst staying true to you brand or product, contact us. Our friendly staff will be happy to help.