The information provided below is for informational purposes only, is not intended to be construed as legal or any other type of professional advice or guidance and may not be accurate or suitable for your specific situation.
*If you want to achieve business growth, you need to do more than cross your fingers and hope for the best. First, make sure that your current operations are running smoothly. Then choose a growth strategy.
Use your strategy to guide you to a growth opportunity. Set a goal and define key performance indicators (KPIs) to track your progress towards it. Draw up a business plan for your project, implement it and monitor your results.*
Once you’ve nurtured your business past the start-up stage, think about your next steps. For most businesses, this means working towards some form of growth.
Even if you have no interest in becoming a major company, it’s still worth trying to grow your business. Done properly, this growth will increase your profits. This can open up exciting new opportunities for you. So here is a quick guide on how to create a growth strategy.
Review your current operations
Growth means scaling up your operations. Any minor issues are very likely to become major ones, so take a little time out to assess and address them.
In particular, look at your company structure. If you started a sole proprietorship (or partnership), then it may be wise to incorporate before you push for growth.
Then look at your business processes and actively check for pain points. If you have staff, don’t just rely on your managers to tell you what you need to know. Survey the people in entry-level positions, especially the customer-facing ones. They are the people who know first-hand if there are issues that need to be fixed before you expand.
Choose your business growth strategy
There are four main business growth strategies:
In the context of growth strategies for small businesses, “acquisition” is far more likely to mean being acquired than acquiring another business. Some entrepreneurs do specifically aim to grow a business up to a point where a larger company wants to buy it. This can be a perfectly reasonable strategy. However, you need to work on other forms of growth before being bought.
Companies of all sizes should always implement this growth strategy. Internal growth is about optimizing everything you do. Aim to deliver the highest level of results with the minimal level of resources, retaining the maximum level of revenue.
Small companies have a lot of scope to use internal growth strategies. This is because they tend to be relatively inefficient to start with, usually due to a combination of inexperience and lack of buying power.
As small businesses develop, they work out where their operations can be improved. They also build their purchasing power. Then it’s easier to invest in solutions that improve their workflows.
Organic growth is the sort of growth that can happen without a specific growth strategy. But if it can happen without a specific growth strategy, it may happen even better with one.
What’s more, creating a growth strategy for organic growth is often relatively straightforward. Look at what’s already delivering your best results and do more of it.
Achieve business growth by expanding your market share where you are now. Don’t work on product development or create new services.
Another option is to look at areas that aren’t doing as well as they could and improve them. This is often a higher-risk approach. It may be better to just drop these underperforming areas.
Strategic growth is often called diversification. It means branching out into new markets or new products or services. This really does require a growth strategy, ideally set out in writing.
The main reason for this is that you will effectively be starting a new business, albeit one that exists within your current business structure. Therefore go through the same process as when you started your current business.
Pick one growth opportunity to focus on
Once you’ve chosen your strategy, choose a specific opportunity. For example, if you’re aiming for organic growth, aim to increase your market penetration in a specific area or your market share with a specific demographic. Or for strategic growth, aim to enter a new market or create a new product.
Whatever strategy you choose, start with the easiest option available to you. Then continue with the next-easiest option and so on. This allows you to build up traction so that each growth stage helps to finance the next.
Refine this into a growth goal and supporting KPIs
Your growth goal will be individual. It should, however, be defined in specific, measurable and realistic terms (SMART). It needs to be specific because you need a way to assess whether or not your strategy is succeeding. It needs to be realistic because setting unrealistic goals is setting yourself up to fail.
It also needs to be measurable so that you can objectively assess your business growth. The measures are typically referred to as Key Performance Indicators (KPIs). Monitoring these can give you early alerts on how well your strategy is delivering.
Turn your strategy into an actual growth plan
A growth plan is essentially a small-scale business plan and covers the following points:
Organization and management
Products or services
Sales and marketing
Even though you will probably operate on a much smaller scale than when you launched your business, take this exercise just as seriously. In particular, undertake a robust analysis of any new market.
Also be prepared to adapt or even abandon your chosen strategy if your analysis indicates this is the right course of action. This may be painful in the short term. In the long term, it will be far less painful than pulling out after you’ve invested a lot of resources in the plan (e.g. in product development).
Action your plan and track the results
Give your strategy the level of resource it needs, but not at the expense of your core business. If necessary, invest in extra resources to help you manage the extra load.