Initially start-ups grow by increasing sales of their product or service in the target market(s) they have identified. This is called penetrating the market(s). Businesses start by penetrating their existing market with their existing product or service as quickly as possible. They will probably have started to move from a selective distribution network to a more intensive network that gets them to more of their target market and probably a broader geographic base. At the same time, they may already be adopting a more aggressive promotion and pricing strategy that encourages further market penetration ahead of the emerging competition. Alongside this, they will be building the brand as a vital part of their promotional message. The question that arises is how to achieve further growth once the original market has been successfully penetrated and its limits reached. Investors are always looking at the scalability potential of a business. Once the initial idea has been proved in the market, where will future growth come from? Unless we are talking about a lifestyle business with limited growth potential, some consideration must be given to this in the business plan, even for a start-up. The extent of planning depends on the time scale and degree of certainty for this growth.
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