Have you ever heard the saying, “If you aren’t growing you’re dying?” It makes it sounds like the only reasonable thing to do is grow!
When looking to grow, is it better to do so through your own internally generated capacity (organic growth) or should you be looking to make acquisitions (inorganic growth)?
While there is no absolute right answer, many business owners face the question at some point. Deciding what to do requires a clear understanding of your goals, internal resources and existing capabilities as well as a realistic consideration of the benefits and challenges associated with each path.
If you are going to grow organically, which occurs when a company internally develops new customers, products, or markets, you need to evaluate your ability to do so. Start with your management team. It is essential to have capable people to provide the vision and strong leadership necessary to develop new products or markets to achieve the growth you want in the time you want it.
Other key areas to address are your sales team and facilities. Growing internally requires an aggressive sales team to enter new territories, and someone with knowledge of new products you plan to take to market. Look closely at the ability of your existing facilities to handle the projected new growth to determine if expansion will be necessary. Also, consider if your growth will require significant research and development – do you have the time and resources to invest in this new R&D?