To Grow Your Business, Ask Yourself the Right Questions

Oftentimes, the approaches to growing businesses are as diverse as the range of businesses themselves. But choosing the right avenue, whether it’s organic growth or growth by acquisition, can be a challenge—unless you ask yourself the right questions.

Before taking a deep dive into the current state of your business, it’s important to first understand your options. Businesses that pursue organic growth—or growth from within—learn that such development requires time and nurturing. This method is prudent and tactful, and a business will typically grow slowly, steadily and profitably while minimizing the risk of cultural and integration challenges. For example, consider a PR firm that, for years, focused its services solely on media relations. As the business landscape evolved, existing clients suddenly started asking for help developing a digital strategy—such as creating a thoughtful social media presence or powerful online content marketing programs. To fulfill these growing needs, the firm decides to internally develop and add this offering to its list of services. In doing so, the company expanded its areas of expertise from within.

Another approach for this firm would be to choose to add this offering via an acquisition growth strategy. With this method, the firm’s market share and assets are immediately larger, new skills and knowledge become available and access to capital and new markets may be easier. There are two key ways to look at growth through the implementation of an acquisition strategy: the “scale play,” which focuses on finding a “like me” company that looks similar to yours; and the “competency play,” which will help you deliver new products and services you haven’t had in the past.

By example, the PR firm above might best approach meeting those needs through a competency play. It has a strong group of existing clients, it’s providing a great service and it’s generating decent revenue. But maybe it’s time for the firm to broaden its reach. To do so, it ventures into the world of advertising, and to make the biggest impact possible, the firm decides to acquire an ad agency in order to offer a new service that’s already reputable, experienced and established.

Both options have their perks—and both have their setbacks. Ultimately determining what works best boils down to understanding where your company is and where you’d like to see it go. That’s why, whether you’re looking to build from the ground up or looking to acquire someone who does what you’re lacking, approaching this decision with an inquisitive mindset is key to knowing how to proceed. This starts with taking a step back and fully addressing your individual needs in crucial areas and gauging how best to stay competitive in a dynamic business environment. It also means recognizing the holes in your business that need to be filled—the places where you could be stronger and better—and acknowledging those already in that space doing what you’re missing.

Asking yourself these questions is extremely valuable when determining the future health of your company. And in the end, what truly matters is being able to fully recognize what you do well, what you don’t do well and the best way to address each in planning for growth.