Pursuing sustainable, profitable high growth is a key objective of many start-up and SME owners and founders.
But what exactly is ‘high growth’ and how exactly can start-ups and SMEs achieve it?
To answer these questions, I examined two recent global studies:
- 2018 High Growth Study of Professional Service Firms conducted by the Hinge Research Institute (Note: Over 80% of the 1000+ firms participating were SMEs with Revenues over $1 million)
- 2017 CPA Australia Asia Pacific Small Business Survey
What Is High Growth?
High growth businesses are those that experienced 20% or greater compound annual growth in revenue over a 3-year period.
The Biggest Threats for High Growth Firms
- Increased competition from both new and larger competitors,
- Unpredictability in the marketplace
- Shortage of talent
Characteristics of High Growth Firms
The study showed that high growth firms:
- Conduct systematic, structured research at least annually to understand target market and customer/client needs
- Tend to be specialized:
- Offering specialised services
- Focusing on specific industries and business issues
- Invest significantly in marketing undertaking a variety of tactics and strategies
- ‘Productize’ their services
- Target new markets
- Invest in the training and development of their staff
Lessons for B2B Start-Ups and SMEs
- Gain an in-depth understanding of your target markets and customers—what we call ‘Listening’. It is critical to identify your strategy/roadmap for business growth
(Note: There are specific approaches to use to understand business customers which we will discuss in upcoming posts)
- Innovation must be undertaken across multiple areas of your business. Two forms of innovation that are important for all firms are:
- Product/Service Innovation
- Marketing Innovation
- Developing your staff is critical to providing them with the skills and knowledge to continually contribute to innovating and growing your business
Take Action Now
Meet with your management team to discuss and assess the following:
- What structured approaches, if any, does your company have in place to understand its target markets and business customers
- How are the learnings being used in your product, marketing and overall business growth strategies?
- What forms of product and marketing innovation is your company undertaking?
- Is there any opportunity to ‘productize’ any of your current service offerings?
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