Business growth is a concept that transcends simple financial metrics, encompassing a multidimensional transformation that reflects the evolution of the organization and its impact on the environment.
Traditionally, growth has been measured by increased revenue, market expansion, or a rise in the workforce. However, a more comprehensive view reveals its complex and varied nature. In the financial realm, it can manifest through an increase in EBITDA, the growth of net equity, or the expansion of created value. For instance, a tech startup may experience significant growth in its valuation, even with negative EBITDA in its early stages.
Operational growth, equally crucial, involves improving process efficiency, increasing production, or expanding geographically. A manufacturing company, for example, may be growing substantially in production capacity without this immediately reflecting in its financial statements.
From a strategic perspective, growth can manifest as business diversification, brand strengthening, or improving competitive positioning. These aspects, although less tangible, are essential for long-term success.
It’s important to recognize that growth is pursued differently depending on the company’s stage. Startups often prioritize value creation and equity growth, while companies in the growth phase seek to improve all indicators simultaneously. Companies undergoing restructuring may temporarily sacrifice net equity to improve EBITDA, while mature companies may focus on maintaining strong indicators, even if this implies a reduction in total created value.
In the agricultural sector, the concept of growth takes on additional nuances. Beyond expanding hectares or increasing production, true growth involves evolving from a producer to an entrepreneur. This process involves professionalizing management, incorporating technology, and diversifying risks.
For example, a soybean producer in Argentina’s Pampas may start their growth by increasing the cultivated area. However, the qualitative leap occurs when they begin managing their activity as an integrated business: implementing management systems, diversifying crops, vertically integrating production, or expanding to other regions. This business approach not only increases profitability but also enhances resilience to external factors such as climate or market fluctuations.
True business growth, therefore, involves a holistic vision that goes beyond financial indicators. It includes the ability to adapt to a changing environment, continuous innovation, and the ability to create sustainable value over time. It’s not just about getting bigger but about becoming better and more efficient.
In conclusion, understanding business growth requires a broad and nuanced perspective. It’s not a sprint but an endurance journey where evolution occurs in multiple dimensions. The companies that thrive are those that understand that growth means constantly adapting, innovating, and creating sustainable value, not just for shareholders but for the entire value chain in which they operate.
At Simpleza, the consulting firm where we tackle these challenges, we have refined our understanding of business growth into a concise yet powerful definition: growth is “the increase in the capacity to create sustainable value.” This perspective guides us in our daily work, helping companies not only grow in size but also develop their capacity to generate lasting value in an ever-changing world.
