So here comes another annual meeting where the different departments present reports updating their progress at the close of the financial year. It’s expected that every department has contributed in some significant way to the revenue generated for that year. So… how has your department contributed? Has there been any revenue growth? And what can this information facilitate moving forward? Bet you’re breathing easy if you have the asset of a B2B trump card!
What Is Revenue Growth?
Revenue growth refers to the increases (or decreases) which have occurred within a company, over the course of one period to the next. This is usually illustrated as a percentage. Thus making it convenient to use, to identify trends and patterns in the business.
Types Of Revenue Growth
1. Sustainable Revenue Growth
Sustainable revenue growth is geared at ensuring some sort of balance is obtained so that your business can thrive. In order words, your business needs to ensure it can support the revenue which it earns. If the business can not meet the demands of the client, well… Therefore,
2. Organic Revenue Growth
Organic revenue growth refers to what is done within your business to assist the growth of your business. This does not include mergers or acquisition of businesses. Organic growth is concerned with the growth which comes about as a direct result of sales of the existing product for the period. This type of growth is usually analyzed quarterly or yearly to properly assess organic revenue growth. Organic revenue growth is achieved when sales promote a drive in output.
3. Inorganic Revenue Growth
The acquisition of companies, take-overs, and mergers are key aspects of inorganic revenue growth. This type of growth is concerned with making purchases or partnerships which will continue to bring growth to your business.
4. Revenue Growth Management
It is important to analyze the information gleaned from calculating your revenue growth to maximize your business’ revenue growth. Doing so will allow you to make predictions based on your consumers’ habits which will foster optimized pricing and availability of your product. Simply put;
However, to achieve this, your business must take time to perceive what the customers value and provide that service or product at a price which the customer will find irresistible. Therefore as a provider, you must be willing to adjust the prices of your product to suit the needs of your customer but also draw in increased revenue for your business.
As a result, a disciplined pricing strategy is often the most critical in revenue growth management. Consider also, promotions as a means of attracting customers. This is helpful, especially if your inventory is up to date and you want to move various products in large volumes. Discounts also attract and generate interest in products which in turn help grow revenue for your business.