Company Growth means a business is getting bigger or improving over time.
This can happen in many ways — not only by making more money. Company growth is the increase in a business’s size, value, performance, and operations over a period of time.
Business growth: The process by which a company expands its operations, increases its revenue, customer base, market share, product offerings or geographic presence.
Organic growth: Growth generated internally by the company (for example through more sales, new products, improvements) rather than by acquisitions or mergers.
Inorganic growth: Growth coming from external activities like mergers, acquisitions, joint ventures or partnerships.
Top-line growth: Increase in revenue or gross sales over a period of time (before deductions).
Scale-up / High-growth company: A firm that has found a working business model and is now rapidly expanding (for example >20% annual growth in revenue or employees over some years).
🧮 Why it matters
- Growth signals that the company is gaining competitive strength, reaching more customers, and potentially increasing value for owners/stakeholders.
- For investors or lenders, growth helps justify valuation, expectation of returns, and risk assessment.
- For management, understanding growth helps set strategy: what to invest in, where to expand, when to control costs.
1️⃣ Financial Growth Metrics
| Term | What it means | Why it matters |
|---|---|---|
| Revenue Growth (%) | Increase in sales over time | Shows demand + business expansion |
| Profit Growth | Increase in net profit | Shows if the company is growing efficiently |
| CAGR (Compound Annual Growth Rate) | Average yearly growth over a period | Smooths ups/downs to show true trend |
| EBITDA Growth | Growth in earnings before interest & taxes | Helps compare companies fairly |
2️⃣ Market & Scale Growth Metrics
| Term | Meaning | Use |
|---|---|---|
| Market Share | % of the market a company controls | Shows competitive power |
| Customer Acquisition Rate | Speed of gaining new customers | Essential for scaling |
| Retention Rate / Churn | Customers staying vs. leaving | Affects long-term stability |
3️⃣ Startup & Tech-Company Growth Terms
| Term | Meaning |
|---|---|
| Product-Market Fit | Customers strongly want what is offered |
| Scale-Up | Company moving from small to rapid growth stage |
| Rule of 40 | Revenue growth + profit margin ≥ 40% (benchmark for SaaS) |
| Burn Rate | How fast cash is being spent (important before profitability) |
4️⃣ Types of Company Growth
| Type | Definition | Example |
|---|---|---|
| Organic Growth | Growth from internal operations | Selling more products, new stores |
| Inorganic Growth | Growth through acquisitions/mergers | Buying another company |
| Vertical Growth | Expanding within supply chain | Owning suppliers or distributors |
| Horizontal Growth | Expanding product lines/markets | Adding new product categories |
