Vertical VS Horizontal Business Growth

As a small business, you need to be prepared to take advantage of expansion opportunities. Essentially, business growth can be seen as horizontal or vertical. These differing approaches have their merits as well as setbacks. Monitoring measured annual growth will help to determine which direction you're heading and determine a course of action.

Horizontal business growth is focused on developing your core, while vertical business growth focuses on expanding outside of your core to take on new practices. Take an ice cream shop for example. If business is booming and it’s time to expand, you can either grow horizontally by opening a new location or acquiring other local ice cream stores, or you can take a vertical approach by implementing new business lines, such as pizza.

Horizontal Business Growth

Why grow horizontally? Take the example of a local coffee shop that’s expanded to multiple locations. Similar businesses face the same issues, so you can come up with solutions that meet the needs of every store. Workflow processes can be standardized in multiple locations. Streamlining in this manner reduces expenses and creates further opportunities.

Performance goals help your team focus on what is important to the business – achieving company sales and profit targets. With everyone focused on the same performance metrics coupled with strong leadership coaching, your team will embrace the goal.

Vertical Business Growth

It is important to go into business growth with eyes wide open. Your local market may have reached capacity. There is simply no more horizontal local growth potential to be had. If this is the case, vertical business growth tactics may be your best option for expansion.

Adding a vertical approach to your core business could involve acquisition of a complimentary company and the introduction of new products or services. For example, Dunkin’ Donuts acquired Baskin-Robbins, adding ice cream to the product line. The same can be done in small business. 

Growing vertically provides new revenue streams to increase business. For example, Spotlight Publicity grew vertically by offering a literary print press to compliment our marketing services for authors.

Research is paramount in order for vertical business growth to succeed. An improper expansion, such as implementing a vertical growth outside of your area of expertise could be detrimental and lead to business failure.

For inspiration, look at the examples of Amazon, Apple and Disney. Each of these powerhouses famously started in garages. Look at them now.


For more information, contact Spotlight Publicity for your a free consultation.