5 Tips for an Effective Growth Strategy
As a business owner, you know the importance of growing your business. Even if you’ve passed the startup phase and/or are happy with the current size of your client base, if you’re not looking for ways to expand your business, you risk losing that base to a competitor, a disruptor in your space or a changing market. Which means that planning for growth is essentially planning your business’s survival.
If, however, your objective is world domination, a thoughtfully planned and well-executed growth strategy is fundamental to your goals. That said, let’s take a look at five suggestions for implementing an effective growth strategy.
#1: Set Realistic Goals
The first step for an effective strategy is to set goals and the first step to setting goals is knowing where you currently stand and how you got there. As Financeit puts it, “you can use past data, insights about your target customer and future projections to inform your growth plan”. In other words, to know where you want to be in the future, you need to look at your past and the data you’ve accumulated about your customers, sales, profits, costs-per-goods/services-sold, marketing and pricing strategies, cost-per-acquisition, etc.
With that information, you can set S.M.A.R.T. goals (specific, measurable, attainable, relevant and time-bound) and further break down each goal into incremental milestones to help you plan your strategy and define ways to gauge your success in achieving those goals.
#2: Look for Ways to Optimize Your Current Business
It might be tempting for a business owner or growth strategist to assume that growth necessarily means looking outside of your current market for new or related products or services to sell. But there could well be opportunities to grow your company by getting better at what you do and making the most out of your current sales. This could mean several activities including eliminating inefficiencies without cutting corners, improving your product or service, implementing a customer loyalty plan, trying different pricing and marketing strategies and/or targeting a new demographic.
Price Waterhouse Cooper Canada recommends that companies look within, or at their “core business” for growth opportunities before prospecting in markets outside of their current niche as they already have the infrastructure and assets in place to help them realize those opportunities.
#3: Look for Ways to Diversify
Once you’re confident that you’ve maximized your growth potential in your current market, you may decide the way forward is to diversify. A recent BDC study found that companies that diversified tended to be more successful financially. Diversification can be done in various ways such as selling complementary products or services, marketing in new geographies and/or acquiring, partnering or merging with another business.
#4: Ensure You Have the Resources to Carry Out Your Strategy
Having a well-crafted plan is only as valuable as the budget and staff you assign to reach each step towards your goals. Ideally, you’re able to finance your growth with revenue and it’s important to prioritize your goals so you can divert resources accordingly.
#5: Track Your Progress and Evaluate Your Strategy
In order to accomplish this, your company will need a way to track key, relevant metrics, analyze the results and compare them against your goals and established milestones. This should be done regularly and the intervals for evaluation, whether quarterly, bi-annually or yearly, for example, will largely depend on the size of your organization and scope of your strategy.
It’s important to remember that, like any other business plan or strategy, if you see that it’s not working, it’s important to know why so that you can make an informed decision on whether to stick to it or pivot into a new direction.
For insuring your business, contact the business insurance experts at alignedinsurance.com