What is the definition of internal growth in a company?

Internal growth refers to an organization's expansion that is achieved through its own efforts rather than through acquisitions or mergers. This type of growth is often linked to improvements in operational efficiency and effectiveness, which can be measured through metrics such as same-store sales.

Same-store sales specifically track the revenue generated by retail locations that have been open for a certain period (typically at least a year), providing a clear picture of a company's internal performance irrespective of any new stores that may have opened during the period. This focus on existing operations illustrates how well the company can grow organically by optimizing its current resources and enhancing its operational output.

While options like buying other businesses or new product development might lead to growth, they do not represent internal growth as they rely on external strategies. Similarly, just reporting an increase in sales does not directly indicate how much of that growth came from existing operations versus new stores or external factors. Hence, focusing on same-store sales reflects the essence of internal growth accurately.