A lot of companies are not growing quickly or are not growing at all. The reasons for this are manifold. Usually they focus on the wrong type of business. In this article we want to describe key factors for growing a company quickly and more importantly in a sustainable fashion.

1) Look out for new market trends

The good thing about new market trends is, that large business are usually putting a lot of marketing dollars into these trends. Good examples would be the topics Cloud, Mobile, Analytics or Big Data. Except Analytics, which already is a big market, the other topics are becoming more relevant by the day. But from a business perspective for the large companies they are rather small opportunities, as they do not generate a lot of turnover. This can be a huge chance for start ups and upcoming companies. Because on the one side, a lot of buzz is generated around those topics by the big players in the market, but on the other side the business generated is only interesting to very small companies.


2) Compete on markets where you can be better than others

Again new markets are the one’s, where large companies have issues to adapt quickly. One such example is the market for mobile business apps. There are several reasons why the larger companies are slow to adapt to new technologies such as Android and iOS. One major reason is that they usually have other business areas in which they are raking in huge sums of money. An example would be an IT company which produces and sells ERP solutions. Usually the turn over generated, by even one deal, goes into the hundreds of thousands of dollars, if not millions of dollars. An app project on the other side would only be in the lower tens of thousands and therefore a sales person from that company would not be interested in taking up such kind of projects. That has ripple effects, because of this reason large companies do not train their employees on these technologies so much. This is again a great chance for smaller companies, as they can focus on these new technologies and can out compete the larger companies easily.

3) Avoid saturated markets

There are a lot of saturated markets, where a lot of players have entered the market because of the opportunities available there. An example would be the eCommerce market. Already a lot of companies are in those markets and are pushing the prices down and professionalizing their services on the same time. Of course, one could avoid competing on that specific market by introducing a new technology in the market which is not directly competing on the same level as the other players offerings. An example for the eCommerce Market would be a Cloud-solution (Software-as-a-Service) for the same. The market for eCommerce cloud solutions is not yet saturated and has room for growth.

4) Quickly add up numbers to determine whether an undertaking is lucrative

Let’s say you have a business idea which generates 100 times 10 dollar a year. This would result in a yearly turnover of about 1000 Dollar a year. This might not be a good business opportunity to pursue. On the other hand 1000 times 300 Dollar a year would be a better business proposal.

5) Go into high margin business

The issue with low a margin business is, that even small disturbances can be a strong negative blow to your business. Let’s say you make 10 cents on 1 Dollar and you are a business situated in India. If the exchange rate would drop by 10 % your margin would erode and you would be making no profits at all. By having a high margin business, these kinds of risks can be handled.

6) Try to keep maintenance per client low (also called 20/80 rule)

A lot of business gets cluttered up by clients who make a lot of work but do not bring in any revenues or even profits. It’s better to focus on one client which brings you a good profit per month, than to focus on 100 clients that each brings you a small profit.

Here an example calculation:

Let’s say you will find 100 clients which each pays 10 Dollar a month. That would add up to 1000 Dollars a month in revenue. Now you will have to cater to each client. Giving them support, answer to queries, have meetings to update on the status, creating offers, updating on new information, and many more tasks. Either you or one of your employees will be needed full time to cater to the needs of these 100 clients.

Now suppose you had 1 client who would pay you 1000 Dollar per month. This would completely free your agenda. In the best case you would only need a few Emails per week and a weekly status call to satisfy that one client. The rest of the time you could take to find other clients who can generate that kind of high revenue or focus on improving strategy or supporting employees to further their knowledge and collaboration.

7) Specialize and be recognized as a specialist in the market

Businesses tend to try to cater to all markets at the same time out of fear to miss out on a specific opportunity. The issue here is that the people in the market are usually looking for a specialized partner who can solve their particular need in the best possible way. An example would be a medium sized company who is on the lookout for a company who can offer customized cloud development and implementation services. One of the company’s employees has been given the task to find a company who could offer those services. Suppose the employee finds two companies, Company A and Company B. Company A offers different services from web development, to mobile app service and cloud services is one of their offerings among those. Company B on the other side is specialized in customized cloud development and implementation services.

It does not need a lot of guess work to know that the company’s employee and their management will go for the specialized firm because they will feel more confident that Company B can implement the new solution without fault and possibly also very quickly. After all … they are specialized in that area.

What do you think are important points to remember to growing a company quickly and in a sustainable fashion?


Looking forward to an interesting discussion. Kindly use the comment section below for your input.

The author: Sascha Thattil is Co-Founder and CEO of YUHIRO. YUHIRO offers dedicated IT services to small and medium sized companies.

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