Every person starts their entrepreneurship journey with the hopes of establishing a business that generates significant positive cash flows or earnings, which increase at significantly faster rates than the overall economy.
However, only 2% of entrepreneurs in the world achieve this goal while the rest merely survive. These 2% thriving businesses are called “Growth Companies.”
It is a dream of every entrepreneur but only a few know how to achieve it. Therefore, I, Avi Arya, father of 2 girls, 6 dogs, husband to a superwoman, a streetcar racer, turned hotelier, now a social media marketer and the founder of Internet Moguls have decided to decode what is a growth company and how you can turn your business into a growth company that has very profitable reinvestment opportunities for its own retained earnings.
And to help you understand this concept even better, I have invited Matt Ward, a serial entrepreneur, ex digital nomad turned into a business coach who helps founders and businesses change the world for the better with experienced growth, strategy, marketing, and fundraising tactics to reach larger audiences, increase revenues, improve business models & processes, and make a bigger impact with their efforts.
I had an exciting conversation with Matt, where he shared 6 things that help you to expand your business. Read this article till the end if you want to discover how Matt helps companies from startups to Fortune 500 to scale and grow.
1. What is a growth company?
Typically, high-growth companies achieve 15 to 30% month-over-month growth in terms of the number of users and revenue. This is a significant scaling very quickly. How you can think about this is because not all businesses achieve that over time. It’s really about how quickly you accelerate and increase exponential growth within your business.
While this seems very vague for new business owners or entrepreneurs, you have to turn your business into a growth company. If you’re planning to take the venture capital route.
Companies that hit 20% to 30% month over month growth, can raise venture capital and funds easily.
2. How to achieve this level of growth for our business?
According to Matt, if you want to grow at the rate of 15-30% month over month, you have to create a viral product.
One viral fact about your product can give you at least 20% to 30% of growth. Because if you don’t create a viral effect for your business, you have to spend a ton on advertising.
Creating a viral impact of your business is even more important if you don’t want to focus on venture capital because otherwise, you have to depend on advertising to build a sustainable business.
3. Upsell to your existing customer, uplevel their life.
With every minute of the conversation, Matt was uncovering a new perspective that can help you to turn your company into a growth company. And at this point, a question popped up in my mind.
Should we upsell to our existing customers or find new clients to bring exponential growth to our business?
Matt added, any firm grows quicker by selling to current customers. But when you think if this is possible for a company to grow faster by selling to existing customers or by finding new consumers?
This depends upon two factors:
- How many clients do you have?
- What is their lifetime value?
If you have big numbers for both the above points, in general, it is much easier for you to gain momentum for scaling. As it is much easier to sell to existing customers.
The reason is you don’t have to persuade them from scratch. They already trust you. You only need to make their life a bit more easier than you are doing right now.
4. It is not possible to build a growth company without new clients
Matt Ward added that now when you know that selling to existing clients is easier, it doesn’t mean that you can build a growth company by just selling to existing clients.
You will never expand into an exponential business or into something that truly scales if all you do is sell more to your existing consumers. You also going to need to be acquiring new clients.
5. Acquire new customers through word of mouth.
“Matt, but how entrepreneurs can acquire new customers at a pace that helps them to build a growth company?” I asked.
I’d like to accomplish this through designing virality and word of mouth into the product itself so that it promotes itself, attracts more people, and also builds and sells organic upsells directly into the product.
There are a variety of different strategies you can use to accomplish this, but it really comes down to having the right calls to action at the right time, assisting people in looking good in front of their friends, and assisting your customers and clients in really up-levelling what they’re doing to make more money want to do. You can check my guide if you want to create virality in your product.
6. Analyze your competition and skills before expanding your business to a new country.
The conversation was getting more and more interested and I asked Matt Ward, “ Should one seek growth while expanding the business in new countries? If yes, how do you know which international market to penetrate before you take the plunge? What variables can help you assess the opportunities and threats you may encounter in your chosen country?”
So you believe your firm must develop and scale, and you’re wondering whether you should extend into new contracts and, if so, which ones. Well, that actually depends on your business model and your long-term goals.
At times, it’s ideal to simply build the business and grow it to a particular size.
However, if you want to build something that has the potential to generate venture capital funding or change people’s lives, you’ll need to expand to other countries.
Start by doing a little bit of competitive analysis. Determine your competitors, who are already in other countries and a little bit of a skills analysis of what competencies does your team have if you’re selling there.
For example, I live in Switzerland now and probably don’t have enough skills to jump into China because I don’t speak Chinese. However, I could go to the US and sell there because it’s a mass market.
Or you could try to tackle more of what we call the dock region market. Germany Austria Switzerland where I saw German-speaking it’s easier to scale up and build that way personally.
I prefer expanding country by country and building myself up in a bit of a blob. For anyone who’s ever played risk, you can conquer the world.
Conquering the world that way where you go country by country and expand outward you don’t have to have complete saturation in the country before moving on to the next country.
I believe you just need enough momentum to be able to win the country. Because a lot of markets have a winner takes all effect.
If there is a winner takes all effect, you need to do two things to expand in the international market:
- Get into the market.
- Win that market.
7. Build a trying and failing culture to encourage innovation.
“How do employees impact the growth of a company, Matt?” I asked. As we have already discussed creating virability and how we can scale in the international market, I want to know how employees impact a growth company and how we can encourage innovation in employees?
Matt replied, to begin with, Amazon has a fantastic system that I admire, and I believe they continue to employ it.
It’s a term that refers to coming up with something fresh that fails, but it’s something that you try. It is vital to honour the trying and failing culture if you want to inspire employees to try new things, as the vast majority of attempts fail.
Without taking those risks and pursuing innovation and attempting to create something new, you will never be able to build a truly dynamic business that will continue to grow in the future, which is why it is critical to foster this in your employees through a no-risk culture of trying new things and failing. If you are constantly under pressure to achieve, you will never explore new things since that is where the risk lies and where you will succeed.
8. Innovate through the eyes of your customer
Your clients are aware of some of their challenges, but they are also capable of coming up with creative solutions. Customers can sometimes come up with incredibly brilliant ideas, as Henry Ford discovered when he asked people who they wanted a quicker horse and carriage transformed into a car, and the same thing happened with Steve Jobs in Apple. If you develop a relationship with your customers through email marketing or social media, for example, that can be a great area to run polls. At the bottom of the list and becoming more loyal customers or buying something else from you.
9. Give ownership to employees.
Onboarding creative and innovative people is of the critical aspects of building a highly successful business. There’s a quote that goes something like this: if you’re the smartest person in the room, you’re probably in the wrong room, and that’s something I’ve definitely struggled with in the past.
The majority of my experience has been running smaller businesses that I saw sold for newer with a remote team, and it’s kind of like playing Michael Jordan with the high school squad.
You’re only able to build something this large and successful if you’re not relying on others to handle things that you can’t do.
The fact is to have exponential growth, you need to hire smart people. To hire smart people, you need to find people who are motivated. You give them additional training, you have to encourage what’s it called the ownership culture.
Then they must have that extra motivation to go the extra mile and not start another business.
By considering these simple yet effective factors you can expand your business to the scale of a growth company.
By following these simple steps you can expand your business exponentially and turn your company into a growth company. But if you are just beginning and feel lonely on your entrepreneurial journey, you can join our “Internet Mogul Of The World School” where we have created an ecosystem to support thriving entrepreneurs with the help of coaching and a supportive community.