The vast majority of small businesses have growth ambitions; but very few business owners actually take the time to put a written plan in place. Creating a growth strategy might seem like something you can do without, particularly when you have a never-ending list of day-to-day tasks demanding your time and attention. However, not putting a tangible growth strategy in place could mean you actually lose business. Or, at the very least, it could increase the chance of losing customers to your competitors.
What is a growth strategy?
A growth strategy is simply a business growth plan that focuses specifically on the expansion of the company and how you’re going to achieve it. It will take some time to create a workable plan. However, that effort will be rewarded many times over when it comes to keeping your growth efforts on track.
Your business growth plan should include:
- A description of expansion opportunities.
- Financial goals broken down quarterly and yearly.
- A marketing plan that details how growth will be achieved.
- A financial plan that determines the capital available to achieve the growth.
- A breakdown of the staffing requirements.
6 questions to answer when creating your growth strategy
1. What are your primary growth objectives?
One factor that can quickly derail a business growth plan is having either too many growth goals or not setting any objectives at all. Growth, just like any business objective, needs to be measured. You should set no more than three specific growth targets that are realistic and have a timescale attached. This should be a mixture of short-term and longer-term goals. Potential growth goals include:
- Launch two new products by the end of the year
- Increase revenue by 10 per cent over the next quarter
- Employ three new members of staff over the next six months
- Take on three new clients worth more than €15,000 each by Christmas
- Move to a bigger office within 18 months
- Increase profit by 50 per cent over the next three years
2. Why do customers buy from you rather than your competitors?
One of the first steps in building a successful growth strategy is to understand what it is you’re doing well now and why customers choose to buy from you rather than the competition. Conducting customer research will help you understand your value proposition and establish what it is that differentiates your products and services. This should be identified and enhanced in the future to help drive business growth.
3. How can you expand existing or create new revenue streams?
There are only three ways to grow, all of which increase your revenue. They are to:
- Increase the number of customers
- Increase the average transaction size
- And to increase the number of purchases each customer makes
As part of your business growth plan, you need to consider how you will achieve at least one of these three goals. Will you introduce new products or services? Market to new customers? Or perhaps change your pricing or promotional strategy? Typically, it’s easier to sell more to existing customers than it is to find new ones, but that could limit your growth potential.
4. What relationships do you need to develop?
One of the greatest opportunities for growth lies in the expansion of relationships that already exist within the business. For example, do you have existing marketing partners that could promote your business in new sectors? Could you become involved in a joint venture with a supplier or customer? Are there are new relationships with suppliers or vendors you can build to take your business to the next level? Exploring your current and potential relationships could help you identify a frictionless route to growth.
5. How can you reduce your costs?
Business growth often goes hand-in-hand with increased costs, but grow cleverly and it is possible to decrease your costs proportionately. For example, renting the office equipment you need and hiring specialist technology that allows you to branch into new sectors can reduce the costs significantly. Equally, there may be economies of scale you can benefit from as you grow.
6. What metrics impact growth?
What are the business metrics that will help you meet your growth ambitions? An increase in leads or sales revenue is the result rather than the cause of business growth. To understand what is causing business growth you have to measure things like:
- Total spend per customer
- Cost per acquisition
- Percentage of leads converted
- Percentage of repeat business
Grow your business for less
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