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What is Organic Growth in Business?

You might not realise it, but you’re probably already running your business in a way that encourages organic growth.
What is Organic Growth in Business?

You might not realise it, but you’re probably already running your business in a way that encourages organic growth.

Organic growth is a way to expand your business by relying on and using your own resources and capabilities. Sometimes referred to as internal growth, organic growth is the main way that businesses grow.

There are two types of business growth. The opposite of organic growth is inorganic growth, or external growth, which involves business takeovers, acquisitions, or mergers. In other words, it’s an investment in your business from outside sources.

As with any business strategy, there are organic growth pros and cons.

Organic growth advantages


Organic growth is controllable and entirely in your hands. You choose how you make it happen, which opportunities you pursue, and the timeframe over which you implement it. Because of this, it’s more stable and sustainable than inorganic growth and can be more manageable.

Organic growth also empowers you to build on your business’ strengths. It gives you the opportunity to carve out and cement your niche and USP. You get to identify which areas you develop and exactly how you do it.

Finally, organic growth could be financed entirely by you. You can set aside profits or choose a way to finance growth in a way that you’re comfortable with.

Organic growth disadvantages


Organic growth thrives when the economy does, so you have to carefully time your action. If you’re unsure when it’s the right time to pursue organic growth, outline your plans first and monitor the economy to find a time that works for you.

You also need to be patient if you pursue organic growth. It’s not the quickest way to guarantee growth but it is sustainable. If you have shareholders or third party investors, they may not be satisfied with the rate of growth.

If your business is already successful and you’re the market leader, you might find that there’s a ceiling to your organic growth. This means you can either seek investment or diversify.

Examples of organic growth in business


There are multiple ways you can organically grow your business.

  1. Introduce new products

New products or services are the first places you can grow organically.

Consider whether you want to launch a completely new product, or choose to introduce a similar but different offering. This could be along the lines of a cheaper or more luxurious option, a different colourway, or a new style. Consider how you can diversify the products you already have and if you’ve exhausted those options, you can try something new.

  1. Expand into new markets

The next way you can encourage organic growth is by introducing your products to new markets.

If you sell goods, you don’t necessarily have to set up shop in a different country, but could instead export overseas. This will give you a good idea of whether or not there is an appetite for your business, and you can take it from there.

  1. Open new businesses

If you have shops, you can open new businesses in new locations. This can be at home or overseas depending on your ambitions.

Just like tactfully introducing new products, if you choose to open new shops you can first try doing it at home to strengthen your position before taking your venture into brand new markets.

  1. Invest in production

If you’ve successfully explored all other avenues, the last option is to invest in production.

This could be methods to increase production or make it more efficient or investing in technology that facilitates innovation.

Growth is achievable


Make sure you have a clear plan and be prepared to experiment. Don’t be afraid to test combinations and new ways of doing things.

If you incorporate plans and research into everyday operations then you’ll naturally pursue, and hopefully, achieve organic growth.

How could Esme help?

Here at Esme loans, we offer business loans to SMEs looking to grow or generally invest in their business. If you’re interested in securing business finance, get in touch with us today or find out how to apply on our website. You can also get an instant quote to find out how much your monthly repayments could be.