AN ASSIGNMENT

ON
ISSUES ON BUSINESS GROWTH
BY
ADEDOYIN TOLULOPE
MATRIC NO:20121982

DEPARTMENT: BUSINESS ADMINISTRATION

COLLEGE OF MANAGEMENT SCIENCES
FEDERAL UNIVERSITY OF AGRICULTURE, ABEOKUTA.

COURSE CODE: ETS 406

COURSE TITLE: VENTURE CREATION AND GROWTH

LECTURER IN CHARGE: DR AKINYELE

AUGUST, 2016.

INTRODUCTION
Bussiness GROWTH has been studied by researchers for many years.Different terms have
been used by different authors to define the stages of a business growth, but the events
through which each business passess remain more or less the same.
Even in tough economic circumstances, it is beneficial for every business to think about
growth. You can be sure that your competitors will be looking to obtain your customers or
your share of the market.

THE CONCEPT OF BUSINESS GROWTH

People often go in business for themselves because they have a special knack or interest in
something. They soon realize however, that that knack is not the only thing they need to be a
success. There are many internal factors that influence how fast or how big a company will
grow. If the owner doesnt acknowledge and attend to those critical factors, they are setting
their burgeoning enterprise up for potential failure or enduring mediocrity The most critical
factors often arent always obvious but Im ready to share them with you right now to help
you navigate the perils and enjoy the benefits of business ownership.
Here are 5 simple, yet critical concepts you MUST master if you are to experience the
growth and profitability you desire.
1.

Know your strengths and deficits

When youre crystal clear about your skills, you can leverage them to move mountains. You
can also use them to counterbalance your weaknesses. When youre working in your blind
spots, youll struggle to
accomplish goals. Youll try to do things you shouldnt and fail to delegate profitably.
2. Work within your value system
The whole point of being in business for yourself is to more closely control your own destiny.
Without a thorough assessment of whats important to you, day-to-day and for the long haul,
you rob yourself of
bringing in experiences that will create the fulfillment you need. Once theyre clearly
articulated, your chance for fulfillment increases dramatically.

3. Understand the market space you operate in

When you target the highest possible level of clientele for your product or service, your fees
have room to expand. When you clearly distinguish yourself from the competition, people
will seek YOU out. If you go to market blindly, you run the risk of stepping into a crowded
space, missing out on opportunities to leverage your companys unique advantages and not
being prepared internally for growth.
4. Have a variety of sources of revenue
Youve probably heard about the importance of diversifying your investments. Well, your
business is one of the most important investments you own. While you can make a great
living selling just one product or service, with more options, youre likely to improve your
revenue stream. During the recent recession, many businesses had to expand their offerings to
appeal to additional markets. Even as the economy recovers, having various offers for various
kinds of customers can help maintain your revenue stream. Just remember to not diversify to
far afield. If that happens, you run the risk of spreading yourself too thin and becoming
ineffective in your efforts.
5. Utilize your time in the most effective possible manner
Its tempting to work on that which is easy, comfortable and familiar. Unfortunately, those
kinds of activities rarely lead to outstanding results. Magic occurs outside our comfort zone.
Work in your personal sweet spots, delegate the rest and focus on the highest profit potential
activities possible.
These concepts are critical for your success. Implement them and practice them
consistently. They will pave the road to profitability for your business
REASONS OF BUSINESS GROWTH
There are many reasons that growth is beneficial to your business.
1. Greater profitability by spreading your overheads.
The more you expand, the greater the value you will get from each item on your list of
overheads.
2. You will have more customers.

This will give you greater security. If some customers switch to your competitors, you will
still have a larger volume of business.
3. With more people in the business you will have much more experience in your workforce.
They will come with knowledge of things which work well in your competitors and can be
utilised to improve your business.
4. If you are working in more market sectors for an increasing number of customers, you will
increase the businesss capability
considerably.
5. You will have greater purchasing power with your suppliers because you will be giving
them a greater volume of business and will receive better discounts.
6. Provided you have a sound approach to managing your business, growth usually results in
greater efficiency as well as economies of scale.
7. You will attract better people.
Everybody likes to be a part of a team where things are happening and there is a greater
chance of everybody developing their role.
8. Success attracts more (and better) customers.
They gain more confidence in giving you their custom if they can see that they are in good
company.
9. Striving for growth changes the whole attitude of a business.
It becomes much more outward looking and likely to succeed.
10. Growth creates a greater number of sales as you begin to develop the network of contacts
created by your customers, staff and
suppliers.
TYPES OF BUSINESS GROWTH
Growth is the goal of every business. Whether it's moving into a larger venue or taking your
product global, creating a vibrant business that produces new products, services, sites, and
jobs is the ultimate goal of a business owner. Determining the best way to grow your business
takes a
strategic plan and a solid understanding of how businesses grow.

These 4 types of business growth can help you assess how to best expand your current
business.
Organic Business Growth
Organic business growth is the most basic but most effective means of growth for a business.
Organic growth focuses on producing more products, services, and space for business success.
Businesses who are focusing on organic growth may buy a larger storefront or expand shifts
to manufacture more product. Businesses focused on growing organically need to literally
expand to accommodate their needs.
Organic growth is a solid business growth strategy for new businesses and also businesses
who have tapped into a new market and face shortage of product. Additional space or
production meet a growing need among consumers and prevent shortage. Organic business
growth is an unsustainable growth strategy but one that ultimately sets a business up for future
success.
Strategic Business Growth
Strategic business growth focuses on the long term growth of a business. Businesses who
should focus on strategic growth have reached the epoch of their organic business growth
stage and need to find additional markets. A strategic growth strategy may be to reach a
previously untapped market through advertising or create additional products to add to
inventory. Strategic business growth requires the money generated by organic growth because
businesses won't experience that same the watershed business acceleration. Instead, it will be
a gradual increase in sales.
Strategic growth is an essential stage for businesses that have plateaued. The strategic
business growth strategy allows businesses to focus on long-term plans and use stored capital
to attain those goals. Strategic growth is difficult for new businesses or businesses who are
producing less product than is in demand. Ultimately, strategic business growth is a great
strategy to tap when looking at long term business planning.
Partnership / Merger/Acquisition
For some businesses, acquiring, merging, or creating a partnership with another business can
present some unique benefits and opportunities for market expansion. This strategy of
business growth is the riskiest but also with the most potential success. A well laid merger or

acquisition can help a business enter a new market, manufacture more product, and gain the
customer loyalty cultivated by another brand.
Internal Business Growth
Internal business growth is both the easiest and hardest way to promote business growth.
Rather than looking outward to production, this business growth strategy uses current
resources and determines how they can be used better. Internal growth would include a
business implementing lean systems or automated workforce management systems. This
growth is often the hardest because rather than simply expanding into another market or
trying to expand a product line, businesses must change how they conduct business, a process
that can be scary to employees and managers.
STRATEGIES BUSINESS GROWTH
There are various strategies for business growth. Different businesses at different stages adopt
different strategies or a combination strategies to
meet the objective of the business growth. The folllowing strstegies are adopted for bussiness
growth which are as follows:
1. Market Expansion Strategy
2. Product Diversification Strategy
3. Market Opportunity Analysis
4. Competitive Market Analysis
5. Market Segmentation Strategy
Market Expansion Strategy

Market expansion strategy is one of the most common strategies for business growth .
Under this strategy, the businesses take the risk of moving into a new direction.
Businesses adopt the expansion strategy in following manners:

Expansion through concentration:

This includes the resource involvement in developing the product.Businesses try to focus on
the existing markets with the help of market penetration strategies.

Expansion through integration:

The businesses move up or down in order to meet the customer demands integration of the
adjacent activities.

Expansion through co-operation:

It is done through takeovers, strategic alliances, mergers and joint ventures.

Product Diversification Strategy
Diversification strategy is adopted by the businesses to boost up their sales and revenue
through introduction of new products. There are three diversification strategies that are as
follows:

Related or concentric diversification:

This kind of diversification is where the products and services are closely related to each
other. For example, sales of appliances, after sales warranty and services.

Horizontal diversification:

It is to add new products or services for the existing customers. For instance, a book seller
adds coffee service on the store.

Unrelated or conglomerate diversification:

The products and services offered under this strategy do not have any relationship with one
another. For example a fertilizer company starts offering dairy products too.
Market Opportunity Analysis
This analysis allows the businesses to determine how the new products can be developed and
introduced in the market. Also businesses can analyze the current position of the brand and
adopting ways to improve the market position.
Competitive Market Analysis
Competitive strategy enables the business to gain and analyze the competitors and come up
with the strengths and weaknesses of the businesses.
It allows the companies to get benefit from competition of direct as well as indirect
competitors.
Market Segmentation Strategy

Segmentation strategy is all about dividing the total segment of potential buyers into groups
or segments . This is the group of people that is most likely to respond to the products and
services of the targeted people.
There are various business growth strategies and businesses adopt them, keeping in view the
latest trends and requirements of the potential market as
well as the business itself.
CHALLENGES OF BUSINESS GROWTH IN NIGERIA
As a business grows, different problems and opportunities demand different solutions - what
worked a year ago might now be not the best approach. All too often, avoidable mistakes turn
what could have been a great business into an also-ran.
Keeping up with the Market
Market research isn't something you do as a one-off when you launch your business. Business
conditions change continually, so your market research should be continuous as well.
Otherwise you run the risk of making business decisions based on out-of-date information,
which can lead to business failure.
The more you succeed, the more competitors notice -and react to - what you are doing. A
market-leading offer one day may be no better than average a few
months later. Apparently loyal customers can be quick to find alternative suppliers who
provide a better deal. As products (and services) age, sales growth and profit margins get
squeezed. Understanding where your products are in their lifecycles can help you work out
how to maximise overall profitability. At the same time, you need to invest in innovation to
build a stream of new, profitable products to market.
Planning ahead
As your business grows, your strategy needs to evolve to suit your changed circumstances.
For example, your focus is likely to change from winning new customers to building
profitable relationships and maximising growth with existing customers.
Existing business relationships often have greater potential for profit and can also provide
reliable cash flow. Newer relationships may increase turnover, but the profit margins may be
lower, which may not be sustainable.

and financial management. At the same time, every business needs to be alert to new
opportunities. There are obvious risks to relying solely on existing customers. Diversifying
your customer base spreads those risks. Following the same business model, but bigger, is not
the only route to growth. There are other strategic options such as outsourcing or franchising
that might provide better growth opportunities. It's important not to assume that your current
success means that you will automatically be able to take advantage of these opportunities.
Every major move needs planning in the same way as a new business launch.
Cash flow and financial management
Good cash flow control is important for any business. For a growing business, it's crucial cash constraints can be the biggest factor limiting growth and overtrading can be fatal.
Making the best use of your finances should be a
key element in business planning and assessing new opportunities. With limited resources,
you may need to pass up promising opportunities if pursuing them would mean starving your
core business of essential funding.
Every element of working capital should be carefully controlled to maximise your free cash
flow. Effective credit management and tight control of overdue debts are essential. You may
also want to consider raising financing against trade debts.
Good stock control and effective supplier
Management tend to become increasingly important as businesses grow. Holdings of obsolete
stock may become a problem that needs periodic clearing up. You may want to work with
suppliers to reduce delivery cycles, or switch to suppliers and systems that can handle just-intime delivery.
Planning ahead helps you anticipate your financing needs and arrange suitable funding. For
many growing businesses, a key decision is whether to bring in outside investors to provide
the equity needed to underpin further expansion.
Problem solving
New businesses often run in perpetual crisis mode. Every day brings new challenges that
urgently need resolving and management spends most of their time troubleshooting.
As your business grows, this approach simply doesn't work. While a short-term crisis is
always urgent, it may not matter nearly as much as other things you could be doing. Spending

your time soothing an irritated customer might help protect that one relationship - but
focusing instead on recruiting the right salesperson could lay the foundations of substantial
new sales for years to come. As your business grows, you also need to be alert to new
problems and priorities. For example, your business might be increasingly at risk unless you
take steps to ensure your intellectual property is properly protected. If you are focusing on
individual marketing campaigns, you might need to devote more
resources to developing your brand.
Identifying the key drivers of growth is a good way of understanding what to prioritise.
A disciplined approach to management focuses on leading employees, developing your
management team and building your business strategy. Instead of treating each problem as a
one-off, you develop systems and structures that make it easier to handle in the future.
The right systems
All businesses produce and rely on large volumes of information - financial records,
interactions with customers and other business contacts, employee details, regulatory
requirements and so on. It's too much to keep track of - let alone use effectively - without the
right systems. Responsibilities and tasks can be delegated as your business grows, but without
solid management information systems you cannot manage effectively. The larger your
business grows, the harder it is to ensure that information is shared and different functions
work together effectively. Putting the right infrastructure in place is an essential part of
helping your business to grow.
Documentation, policies and procedures also become increasingly important. The informality
that might work with one or two employees and a handful of customers simply isn't practical
in a growing business. You need proper contracts, clear terms and conditions, effective
employment procedures and so
on.
Many growing businesses find using established management standards one of the most
effective ways of introducing best practice. Quality control systems can be an important part
of driving improvements and convincing larger customers that you can be relied on.
Investing in the right systems is an investment that will pay off both short and long term. You
benefit every day from more effective operations. If you ever

decide to sell the business, demonstrating that you have well-run, efficient systems will be an
important part of proving its value.
Skills and attitudes
Entrepreneurs are the driving force behind creating and growing new businesses. All too
often, they are also the people holding them back.
The abilities that can help you launch a business are not the same as those you need to help it
grow. It's vital not to fool yourself into valuing your own abilities too highly. The chances are
that you'll need training to learn the skills and attitudes required by someone who is leading
growth.
To grow your business, you need to learn to delegate properly, trusting your management
team and giving up day-to-day control of every detail. It's all too easy to stifle creativity and
motivation with excessive interference. As the business becomes more complex, you also
need to develop your time management skills and learn to focus on what's really important.
As your business grows, you may need to bring in outsiders to help. You'll want to delegate
responsibility for particular areas to different specialists, or appoint a non-executive director
or two to strengthen your board. As you start tackling a new opportunity, someone who has
experience of that activity can be vital.
For many successful entrepreneurs, learning to listen to - and take - advice is one of the
hardest challenges they face. But it may also be essential if you are going to make the most of
your opportunities. Some entrepreneurs, recognising their own limitations, even appoint
someone else to act as managing director or chairman.
Welcoming changes
Changes can be a major threat to a growing business. Assuming that you will continue to be
successful simply because you have been in the past is very unwise. Regularly revisiting and
updating your business plan an help remind you of the changing market conditions and the
need to respond to them. An up-to-date plan helps you identify what action you need to take
to change your business and the way it operates, for example:Changing to suppliers who can
grow with you and meet your new priorities. As your business grows, consistent quality and
reliability may be more important than simply getting the cheapest offer. Renegotiating
contracts to take account of increased volume.

You need to be fully committed to your strategy, even if it takes you out of your comfort zone.
This may involve hard decisions - for example making employees redundant or switching
business away from suppliers you have become friends with. But unless you're prepared to do
this, you risk putting your business at a dangerous competitive disadvantage.
CRITICAL SUCCESS FACTOR OF GROWING BUSINESS
Content is Everything.
It has been said that information is the new currency. Every day, were looking for more
information to help us make the decisions we need to make. What does this mean for your
business? There are people out there, searching for solutions to their problems. You need to
provide them with valuable information, content that shows you understand their problems
and explains just how your products or services can help them solve those problems. You have
to take on the role of trusted advisor rather than a salesman. When people know you have the
solutions to their problems, they will buy from you.
Return On Investment.
Any efforts youre using to market your products and services, you MUST demand a return
on investment from it. This starts with knowing exactly WHY you are using each strategy you
are using to promote your business. Is it Radio, TV, Flyers, Social Media, Banner Ads? Are
you using it to build brand awareness, make more sales, encourage repeat buyers, seek
referrals? Once you have the goal clear in mind, it becomes easier to track what youre doing
and know if its working or not. You MUST demand a return on investment. If its not
working to achieve the results you need, Dont do it.
Model Success.
Success Leaves Clues is a popular saying Im sure you know. There is also a popular saying
from Tony Robbins If you want to achieve success, find someone who is already successful
and do what they did. In other words, model them. If youre in an industry that has a lot of
successful businesses,
Model them. What are their products and services, how do they offer them, Who are their
clients? Then do what they are doing. If they have a system that
works for them and is constantly bringing in business, then that is where you want to get to.
Now, I feel a few disclaimers are needed here. Model them, dont copy them. Use what they

do as a template for your own business. Second, this does not stifle or downplay the
importance of innovation. By all means, you want to think of ways to be unique, stand out etc
and that is important. But, you need to know what it is they are doing and know what their
formula of success is. Then you can insert your own unique service offering.
Attend Events
Attending events, networking with people in and out of your industry and continual learning
and improvement is critical to your business growth. If youre not consistently learning new
strategies to enhance your business growth, if youre not consistently going out there and
knowing whats working in your industry and out, if youre not consistently investing in
yourself and your business, your business will become irrelevant sooner rather than later.
Why? The world has changed. Tactics that worked 2 years ago, 1 year ago, 6 months ago, may
no longer be relevant and unless you keep yourself in the loop, you will miss out.

CONCLUSION
Recognising and overcoming the common pitfalls associated with growth is essential if your
business is to continue to grow and thrive. Crucially, you need to ensure that the steps you
take today don't themselves create additional problems for the future. Effective leadership will
help you make the most of the opportunities, creating sustainable growth for the future.
REFERENCE
http://www.studylecturenotes.com/mba-marketing/business-growth-strategies-definitiontypes-and-examples

Sam Bediako-Asante; Friday March 11, 2016, Tips on Business growth

http://www.juststartups.com/growth-development/57/challenges-of-business- growth.html
Different Types of Business Growth Strategied Published by Westford School of
Management at, July 8, 2016
http://www.stayoutfront.com/Blog/Show/6/Ten-reasons-that-growth-is-good-for-yourbusiness.

https://www.linkedin.com/pulse/challenges-growing-business-how-meet-them-ifg-consultingnig-ltd
theiventeam.com/business-growth/5-critical-sucgrowth-in-2016/