The process of organic growth is when a business expands its capacity without borrowing money. An organic growth strategy involves a business utilizing all of its resources - without borrowing funds - to expand its operations and grow the business, according to Jaian Cuttari.
An organic business growth strategy involves increasing output, enhancing efficiency, speeding up production, increasing revenue, and improving cash flow. It is a critical component of success.
Growing organically: Three primary strategies
To facilitate organic growth, most companies implement three primary strategies:
Optimizing commercial activities, including pricing, marketing, and selling of goods and services.
Spending money on activities that fuel earnings and growth, such as the production of high-earning products.
Creation and development of new goods or services to offer or new models of operations
To fuel organic growth, most companies focus on one of the strategies mentioned above, as pursuing more than one can make it more difficult to determine what actions within a strategy are working and which aren't. Also, since growth typically requires large expenditures, it may be difficult for a company to fund multiple growth strategies at the same time.
A well-rounded organization will likely adopt or practice all of the strategies at some point. However, they usually only use one strategy at a time. Generally, only companies at the very top of the organizational hierarchy implement more than one strategy at a time. They are typically companies with more resources available.
In the long run, organic growth is more difficult to achieve because it takes longer and requires significant changes in how a business is run, according to Jaian Cuttari. However, organic growth can protect one's company as an independent entity (versus a merger or acquisition) as well as prevent one from incurring substantial debt (through loans or borrowed funds).
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