Creating a Valuable Business

2. Growth

2.1 Operating in an expanding market makes it easier to grow your business.

• If you are operating in a market that is stagnant, or in decline, you may want to exit the business or merge with competitors.Larger companies are usually in a better position to exploit mature markets.
• It is difficult for a small business to create market growth.

2.2 Create a business which can be scaled up.

For example, you might aim to:

• Expand into other geographical areas.
• Acquire smaller competitors.
• Franchise the business.

2.3 A narrowly focused business, which pursues its goals relentlessly, is the most likely to create outstanding value.

• However, it is also the type of business most at risk of failing.Diversifying into related products or businesses that suit your strengths can reduce this risk.
• Outsourcing non-core activities can improve your business' focus. But you risk losing control of them.

2.4 Strategic alliances can be an important source of growth, particularly if you do not have the resources to exploit your opportunities fully. For example:

• Working with a major distributor may be more effective than developing your own sales channels.Tying in key partners in this way also reduces the risk of losing business to competitors.
• You might want to involve a partner in exploiting your intellectual property - or you might want to sell the rights.