Five key things that fast-growth businesses do well
Thursday, December 20, 2012/
But it’s perhaps more useful to look at the common characteristics of fast-growth businesses, rather than the rate of growth itself.
Start-ups that manage to scale quickly generally do one of three things, according to Marc Peskett, director at business advisory firm MPR Group: sell more of your current product to existing customers, sell new products or services to existing customers or sell to new customers.
There is no single right answer to this conundrum, but it is vital that you put in place several essential internal processes to aid your growth.
We’ve picked out five things that fast-growth businesses do well. Are you emulating them?
1. Standing out from the crowd
The businesses best set up for speedy growth are those that are in the right place at the right time to exploit a consumer trend or new technology that is set to capture the market’s attention.
“It is not just luck,” says Dr Tom McKaskill, serial entrepreneur, educator and author. “The best ventures are based on a dramatic change, whether it is technology, regulations, the economy or in the way society operates.”
“That change generated an opportunity for a new product or service, a new process or a new way of delivering an existing product or service to meet an unmet need or solve an existing problem in a much more effective manner.”
Peskett adds: “To continue to grow, it’s important that you provide something new for the next generation of improved products and services that the market wants.”
“Your offer needs to evolve over time to stay relevant to the market and fresh to your existing customers. In fact, you can combine the two, by testing a revised offer with some of your existing customers.”
“Take an element of your product or service and refresh the offer associated with it to make it sound new and therefore exciting to your current customers.”
“Gather feedback from them and test variations on the offer to refine it and see which generates the most enquiries or sales and then launch the winning combination.”
“This beats the approach that many businesses take of developing a new offering and trying to make it absolutely perfect before they test it or bring it to the market. Time and effort is wasted here and the outcome could be that the market isn’t interested in buying anyway.”
2. Customer targeting
Most start-ups are happy to get a sale from any source. All income is equal, right? Fast-growth ventures, on the other hand, have a keen understanding of exactly who their customer is and why they need the business’ product or service in their lives.
“While it is possible to sell to everyone, the successful high growth business typically has a very tight definition of the ideal customers and knows how to find them,” explains McKaskill.
“The best customer is easily identified, able to be approached and is willing and able to purchase. Businesses which rely on the potential customer finding them have difficulty proactively influencing their growth.”
Once they identify their target customers, high-growth businesses appeal to them in a clever way. They take choice out of the equation by positioning themselves as the only viable remedy to a problem that must be immediately fixed.
“Business is driven by transaction revenue,” says McKaskill.
“The best high growth businesses solve a problem which has high urgency, high utility or resolves a strong physical or psychological need for the customer.”
“Situations where customers have extensive choice, can delay buying, or are indifferent about buying the product or service are very difficult situations in which to drive a high growth business.”
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