Imagine you run a successful small business in Perth: sales are ticking up and your team is feeling confident. You face a familiar dilemma – should you go broad by expanding into new markets or launching new services, or go deep by investing in your existing team, culture and processes? This choice is at the heart of any business growth strategy for SMEs. Australian small businesses are the backbone of our economy (small firms added over one-third of Australia’s GDP in 2023), so getting this balance right is vital for long-term success.

As one café owner put it: “We could open a new store downtown, or double down on staff training at our original shop. Both could drive growth, but in very different ways.” This “broad vs deep” question shows up across industries. Going broad means reaching more – new customers, markets or products. Going deep means strengthening core – your culture, systems, teams and leadership. Each path has perks and pitfalls. The key is knowing when and how to choose each, so that growth is sustainable rather than frantic.

Going Broad: Expanding Markets, Services and Teams

“Going broad” is about growth on a larger scale. It might mean exporting your specialty furniture to other states, launching a second restaurant, or adding new product lines. The upside is clear: you diversify your revenue streams and capture new opportunities. For example, a software SME that adds a new service can tap into fresh customer segments. But expansion also brings risks – loss of focus, overstretched teams or diluted brand identity. A Harvard Business Review analysis warns that rapid growth without solid planning can fizzle: only about 15% of companies in a high-growth bracket sustained top-tier performance over 30 years. In short, growth can amplify problems if your foundation isn’t ready.

Before deciding to go broad, look for these signs:

·         Market opportunity and readiness: You have clear demand in a new market or a unique product fit. (E.g. a regional tourist shop sees strong online sales from interstate – maybe time to launch an e-store.)

·         Strong financial runway: You have enough cash flow or funding to invest without jeopardising current operations. Expanding too early can overextend budgets.

·         Scalable systems and processes: Your operations are already smooth. (Automation, documented processes and skilled staff are in place.) If you lack internal capacity, adding more work will create chaos.

·         Underutilised capacity: Existing assets (like production facilities or sales capacity) aren’t fully used. In that case, expansion can drive efficiency.

·         Clear competitive edge: You have a unique offering or expertise that can win in a broader market.

Going broad is often tempting – growth can be exciting. But remember, HBR research shows that sustainable growth is elusive. If you rush, you may risk losing focus on what made you successful.

Going Deep: Strengthening Your Core Systems and Culture

“Going deep” means digging into your business and making it stronger from within. This can involve investing in your people, culture, leadership, and internal systems. For example, rather than opening new locations, you might run leadership training, improve your technology and systems, or launch initiatives to boost employee engagement. Deep growth can look less glamorous, but it often pays off by improving efficiency, customer service and team retention.

Many SME leaders find that focusing on culture and talent creates a foundation for long-term success. In fact, research emphasises that people and culture are the most critical resources. HBR notes that “consistent and profitable growth is … nearly impossible without … the quality, talent, and mindset of its people”[2]. In other words, no matter how many markets you chase, if your team isn’t strong, growth will stall.

McKinsey’s research underlines this: companies with top-quartile cultures – where employees share clear beliefs and vision – deliver about three times the shareholder returns of companies with weak cultures. They also see higher profitability and return on capital. In practice, a Perth engineering firm that focused on internal process improvements and staff development saw its project delivery times improve and client retention grow – a “deep” move that boosted performance even before it considered taking on new projects.

Before deciding to go deep, look for these signs:

·         Team and leadership gaps: High staff turnover, low morale or leadership burnout suggest it’s time for investment in people and structure.

·         Process bottlenecks: If orders are getting delayed, quality is slipping, or customer service is lagging, build better systems first.

·         Flat or declining margins: If sales are up but profits aren’t, inefficiencies, wastage or poor cost control may be the culprit. Deep fixes can restore health.

·         Customer retention issues: Struggling to keep existing customers? Strengthening core value (service quality, reliability) often helps more than new sales channels.

·         Cultural drift: Mergers or rapid hires can dilute your culture. Re-aligning vision, values and behaviours might be urgently needed.

Going deep doesn’t mean ignoring growth; it means preparing for growth. By enhancing your culture and capabilities now, you’ll be better equipped when you do decide to expand.

Strategy Development for SMEs: Crafting the Right Approach

Neither broad nor deep is inherently “right” – smart leaders know when to alternate between them. A balanced business growth strategy for SMEs looks at short-term wins and long-term health. Here are some practical tips: 

·         Listen to data and feedback: Use customer and employee feedback to flag weaknesses. If customers complain about service, go deep. If surveys show untapped demand, go broad.

·         Set clear, realistic goals: Don’t chase growth for growth’s sake. Align expansion plans with clear strategy and market research. Deloitte notes that sustainable business performance blends profit goals with people and process goals over the long haul. (focus on sustainable business performance).

·         Test before you invest: Pilots or small trials can de-risk broad moves. Likewise, invest in small internal projects before overhauling everything.

·         Balance hiring: Expand your team carefully. Fast hiring can fill gaps, but hiring without vetting can lead to “wrong team” problems (a leading reason startups fail).

·         Maintain customer focus: Whether broad or deep, never lose sight of the customer. Always measure how changes impact client satisfaction.

In practice, an SME might decide to go broad in one area and deep in another. For example, a Sydney-based online retailer may expand into New Zealand (broadening markets) while simultaneously upgrading its warehouse automation (going deep on operations). The key is that these moves reinforce each other, and don’t over-extend capacity. 

For many SME leaders, figuring out this mix can be tricky. That’s where expert guidance helps. Consider leveraging professional strategy development support. Chalon Performance Consulting offers a Strategy Development services designed for exactly this: helping small and medium businesses decide when and how to balance expansion with strengthening their core. A structured strategy development process can turn uncertainty into a clear roadmap.

Towards Sustainable Growth

In the end, the ultimate goal is sustainable business performance. Short-term bursts of growth are tempting, but without a solid foundation they rarely last. By contrast, deep investments in culture, leadership and systems pay dividends over years. As McKinsey found, companies with healthy cultures and strong organizational health boost not just morale but profits and returns.

A balanced approach means knowing yourself: your company’s unique strengths, weaknesses and market position. Broad moves should only follow when you can support them; deep moves should complement ongoing growth. With thoughtful strategy development, you can aim for growth that is not only big, but better. 

For SMEs in Australia, this balance is the difference between fleeting success and enduring performance. By choosing wisely when to go broad and when to go deep, leaders set their businesses up to thrive in any economy – not just today, but for decades to come.