What is Business Growth and Why is Measuring it Important?


Whether a business is just starting up, or is a well-established firm, measuring growth can be an important factor. Sometimes businesses can separate ‘profitability’ from ‘growth’ but often it can be that the two are intrinsically linked – in other words, you can’t have one without the other.

Recognising this is just one of the reasons why measuring business growth can be important, however its benefits can go beyond just assessing financial success. In this post, we’ve looked at this in closer detail to help explain what else it can also involve.

What is ‘Business Growth’?

While there isn’t a set business growth definition, it can be broadly described as the rate a business has grown and its success during a set amount of time. The ‘measuring’ aspect can be the processes that examine and determine the growth; this could be done annually, monthly or even over shorter weekly periods.

Types of Business Growth

Business growth can be facilitated or seen in a number of ways. These can include:

  • Organic Business Growth
    Organic business growth typically refers to the literal growth of a business, be it via expansion or the management of increased supply and demand. This is also something that smaller businesses typically experience more as these increases are easier to recognise with smaller operations.
  • Internal Growth
    Internal growth is where a company might look to facilitate growth without investment; instead they may look to streamline or improve internal processes to make them more effective.
  • Strategic Growth
    This is typically where a business looks at growth in the long run, rather than in the short term through the thorough planning and implementation of new and innovative approaches. This isn’t typically something a startup or SME would try as it’s more commonly used by larger companies who have exhausted the more common business growth strategies
  • Additional Examples of Growth
    If a business was to use some of the above strategies, here are a number of examples of where subsequent business growth can be measured:
    • Rises in sales, profits and revenue streams
    • Responses to marketing campaigns
    • Increased staff numbers
    • Investment in new equipment or facilities
    • Franchising and the opening of new sites

Naturally, these can depend on the nature of the business and certain types will only be relevant to certain sectors.

The Advantages of Measuring Business Growth

With business growth strategies like the above in place, a company can then begin to see a number of benefits and possible advantages by regularly assessing the performance of them.

A short selection could include how it can:

  • Demonstrate Progression
    Arguably the most obvious positive to measuring business growth is a company can get a clear view of how far it has come – or grown – over different timeframes.
  • Highlight Positives
    As well as the above, a business will then be able to also highlight the major gains, wins and positives this growth has brought them. This could then be something to build on and recognise as a strength.
  • Highlight Issues
    At the same time, it can point out areas that have not been as successful. The benefit here is it can highlight problems and make it easier for businesses to look at new strategies to help improve their situation.
  • Improve Motivation
    If a company can report back to its staff on profits and positive performance, this could also lead to a rise in employee satisfaction levels and motivation.

How to Measure Business Growth

As aforementioned, measuring business growth can be done over different periods of time, but the specifics of this can vary. There are also steps that businesses of all sizes can take when they look to calculate, measure and manage business growth. These could cover:

  • Setting growth targets and objectives before implementing plans
  • Formulating a business plan around this which includes taking time to monitor performance
  • Staff may be given the responsibility to report on different areas of a business and feed this back periodically – this might be through basic aspects like looking at increased numbers of clients and sales, all the way through to more intricate aspects like product quality and customer satisfaction
  • Alternatively, some companies may hire external (and objective) support for reporting, or to give an overview of their business growth performance
  • Some businesses may look at what their competition are doing and compare their growth and results against them


With all this in mind, it certainly does seem that measuring business growth can be quite beneficial in both the long and short term. It can also be said that, companies that are yet to start effectively measuring business growth could be missing out on the potential benefits it can bring and implementing such strategies could prove to be a positive step forward.

Image courtesy of iStock

Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.

This article has been compiled using information available to us up to 20/08/21.

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