You can facilitate and speed up expansion by having a clear road map.
What is a business growth plan?
A business growth plan is an outline for where a company sees itself in the next one to two years. The growth plan should be formatted to follow along with each quarter. At the end of each quarter, the company can review what goals it met and what goals it missed during that period. At this point, management can revise the business growth plan to reflect current market standing, learn more about managed sitecore services.
Why are business growth plans important?
These are some of the many reasons why business growth plans are important:
- Market share and penetration. If your market share remains constant in a world where costs consistently increase, you’ll inevitably start recording losses instead of profits. Business growth plans help you avoid this scenario.
- Recouping early losses. Most companies lose far more than they earn in their early years. To recoup these losses, you’ll need to grow your company to a point where it can make enough revenue to pay off your debts.
- Future risk minimization. Growth plans matter for established businesses too. These companies can always stand to make their sales more efficient and thereby become more liquid. This liquidity can come in handy should you need money to cover unexpected problems.
- A business growth plan is beneficial to a company as a whole, but for most businesses, the main purpose is to write it with investors in mind. Investors want an outline of how your company plans to build sales in the coming months.
- Concrete revenue plans. Growth plans are customizable to each business and don’t need to follow a set template. However, all business growth plans must focus heavily on revenue. The plan should answer a simple question: How does your company plan to make money each quarter?
What factors impact business growth?
Countless factors can affect your business growth. These are some of the key elements:
- Leadership. To achieve your goals, you need to know the ins and out of your business processes and how external forces impact them. Without this knowledge, you can’t direct and train your team to drive your revenue. Ultimately, this will lead to stagnation rather than growth.
- Management. As a small business owner, you’re innately involved in management – obtaining funding, resources, and physical and digital infrastructure. Any management styles that hamper your acquisition of these resources for the sake of saving money could hamstring your growth. The money you’ll earn after growing could retroactively cover your current costs.
- Customer loyalty. Acquiring new customers can be five times as expensive as retaining current ones, and a 5% boost in customer retention can increase profits by 25% to 95%. Combined, these statistics make customer loyalty fundamental to business growth.
What are the four major growth strategies?
There are countless growth strategies for businesses, but only four major types. With these growth strategies, you can determine how to build on your brand.
- Market strategy: A market strategy refers to how you plan to penetrate your target clientele. This type of strategy isn’t intended for entering a new market or creating new products and services to boost your market share; it’s about leveraging your current offerings. For instance, can you adjust your pricing? Should you launch a new marketing campaign?
- Development: This strategy means looking into ways to break your products and services into a new market. If you can’t find the growth you want in the current market, a goal could be to expand to a new market.
- Product strategy: Also known as “product development,” this strategy focuses on what new products and services you can target to your current market. How can you grow your business without entering new markets? What are your customers asking for?
- Diversification: Diversification means expanding both your products and target markets. This strategy is usually best for smaller companies that have the means to be versatile with the products or services they offer and what new markets they attempt to penetrate.