How to build a dynamic business by nurturing exponential growth.
What actions do you need to take to triple your business growth?
It’s easier than you think with the right strategy! The key is to understand the concept of exponential growth.
What is exponential growth, and how can you apply it in real life?
Do you know what compound interest is? Exponential growth works on a similar principle.
Imagine you increase sales by 10% per month, starting with a threshold of £5,000 in January.
What results will you generate in a year?
Some may think that since 10% of £5000 is £500, over the course of a year, however sales will increase by £6000 in those 12 months (12 × £500). In a year’s time, income will be £11,000. This is linear growth, where income grows by a specific value, i.e., £500. This linear growth is independent of the initial value.
We express exponential growth instead as a percentage, it depends on the initial value. 10% of £5000 is £500. Therefore, you will earn £5500 in February. However, 10% of this new amount is £550.
Thus, in March you will earn £6050. Another 10% increase will be £605. This means that in April you will earn £6,655 - 10% of this value of £665.50. This means an income of £7320.50 in May. Thus, increasing income by 10% per month, in a year’s time it will now be £15,692.14.
The table below presents a detailed comparison of linear and exponential growth.
Income Amount of Increase
Income Amount of Increase
A 10% monthly increase results threefold over the course of a year.
The company’s income will increase almost tenfold to £49,248.66 after two years of rapid growth and exceed £150,000 after three years!
It’s an enormous challenge to keep up such a business growth rate for three years. Planning for a 10% income boost is as simple as planning for a 30-fold increase, but it is in the execution that you will find the difference.
What’s the correlation between exponential growth and business development?
The theory sounds impressive, but can you grow your business at that rate and sustain it?
An example of exponential growth is Facebook. At the end of 2004, the company had one million active users. By 2006, this figure had increased to 12 million, by 2008, 100 million, and by 2012 it had exceeded one billion.
This is a 1000-fold increase in under a decade.
Facebook's revenue figures are impressive. Similarly, CleverApp’s data shows that in 2004, revenue was £400,000, but in 2018, it was £55 billion. An increase of 13,753,150% in 14 years!
Achieving an average annual growth of 250% can lead to a remarkable increase in revenue. This can be maintained every month, with an increase of about 8%. This already looks much more realistic. Right?
Is scaling an option for your business?
Assess the scalability of your business before expanding and attracting new customers.
Determine the amount of new customers you can manage. Be aware of your limitations. Recognize when you require additional measures to advance and expand your business.
Consider what you can improve now if you can only take on a few new customers. For example, manufacturing companies can optimize production chains. Service companies can develop efficient organizational and recruiting procedures to manage a larger team.
Even “scalable” businesses, e.g. those selling digital products, need to prepare for an influx of new customers, i.e., more messages, emails, social media comments.
The key to business growth is marketing.
Customers are essential for your business to survive.
Your marketing channels are instrumental in building business operations and growth.
Entrepreneurs are always thinking about how to attract new customers. Reaching new audiences is crucial.
Current customers also play an important role in business growth.
According to MarkinBlog, acquiring a new customer is up to seven times more expensive than retaining an existing one. Devise methods to keep your current customers for longer.
How can you inspire your current customers to use your offerings more frequently?
What actions can you take to encourage them to use more expensive services or place larger orders?
You must provide great products and excellent services. Motivate them to make the most of your offerings. Discounts, rebates, and loyalty programs are effective. Sending out a newsletter can prove to be an ideal way of maintaining contact with customers.
What’s the quickest way to achieve business growth through marketing?
Maintaining current customers and gaining new ones is key. To achieve this entrepreneurs must decide on a marketing strategy.
What is the key to achieving maximum growth?
The holy grail of marketing does not exist. You can choose to promote through either online marketing or traditional methods. Your options include Instagram, TikTok, YouTube, blogging, podcasting, or paid advertising. You have many opportunities to explore!
Test, test, test!
Begin with one outreach channel and monitor its outcomes. Stick with it if you’re satisfied. Expect more from your marketing by experimenting with new strategies.
When transitioning to entrepreneurship from full-time work, it's important to limit your marketing channels.
Dedicate your energy to one or two outreach channels. Adopt a small step strategy as your focus.
Growing your company doesn’t require the production of a time-consuming and energy-draining, complicated business plan. Flexibility is the key entrepreneurial trait during times of crisis.
Minor changes can be an excellent strategy for business growth. Consider multiple ways to boost sales.
For example, as a freelancer, you can increase your sales conversions or generate more inquiries.
To increase product sales, focus on sending more emails, improving Open Rate and CTR, and expanding your marketing reach.
Many factors influence revenue- break down your sales process into smaller steps and elements and determine how to enhance each one. This is where magic comes to life. When these factors have an impact on each other, a synergistic effect occurs.
Here’s an example to consider. Envision:
An increase in traffic to your landing page by 10%.
Achieving a 10% increase in landing page conversion.
A boost to email open rate by 10%.
A rise of 10% in the CTR of emails.
The sales page conversion rate increased by 10%.
Together, your five changes have resulted in a 50% increase. Yet, their interaction results in a final increase of 61%.
As an example, 1,100 people will enter the landing page instead of just 1,000. If the conversion rate is 10%, 110 people will sign up instead of 100. But if you increase the conversion rate by 10% (from 10% to 11%), you’ll get 121 sign-ups. Therefore the increase in total is 21%.
Pay attention to other elements of the company as well, e.g. consistent communication, email response time, website UX. Small changes accumulate and add up to spectacular business growth in the long run.
Exponential growth is a novel approach to business development.
You can achieve business growth three times over by repeating a 10% growth rate. With this method, you can concentrate on what's happening now instead of focusing on distant goals.
The best way to attain exponential growth in a company is to examine the factors that influence revenue. Reflect on ways to improve certain aspects of the business. By optimizing interrelated factors, a synergy effect can help you achieve better results!
Don’t forget about marketing as your business grows. Customers are key to the success of any business. Consider ways to draw in new customers and methods to boost profits from existing ones.