Business: Strategic Planning is Key to Business Growth

There are many reasons why having a growth plan is beneficial to your business, especially in tough economic circumstances. You can be sure that your competitors will be looking to obtain your customers or your share of the market, and in the absence of a growth plan, many businesses suffer from severe knock-on effects that impact revenue growth. Building and sharing a growth plan with your team and external advisors ensures that you are sprinting in the correct direction of customer segments that most value your offerings.

Constraints of proper growth plan leads:

•     Delaying your growth;
•   Intense Competition; and
•   lack of Accountability;
•   Lack of Learning from Execution.
•   No New Thinking;
•   No Sensible Target;
•   Poor Execution;
•   Wasted Efforts;

 

Before expanding your business, you need to take time to document your growth strategy. With a well-thought-out and documented strategy in place, you can ensure that your business growth is led by informed decisions, thereby avoiding surprise pitfalls that compromise profits.

 

                                   

Growth Strategy

A growth strategy is a document that details your business goals and defines your strategies for meeting those goals. It’s a road map detailing the goals you’re striving to meet, how you’re planning to meet them, and when you’re planning to execute.

 

The most effective strategies are documented so that they can be shared across the organization. Having a documented strategy creates cohesiveness, allowing decisions and initiatives across the company to be catered to established goals. While initial planning is crucial, iterative planning is important as well. By revisiting your strategy at regular intervals, you can make strategic shifts based on new information, market changes and historical data.

 

Business Growth Strategies

There are many ways to grow a business. Which way you choose to expand largely depends on your ambition, your reasons for growth, and the opportunities and resources available. However, two crucial factors for choosing a business growth strategy are:

 

•       Products – what you currently offer, and what you’d like to offer in the future
•   Markets – where you currently sell, and where you’d like to sell in the future

 

The Four Major Growth Strategies

In the simplest terms, there are four possible strategies for growth, each with its own distinct risks. These are:

 

Market Penetration

With market penetration, you try to sell more of the same things to the same market. The risks are usually low as you focus on capturing a bigger share of your current market with the products you already have.

 

Product Development

With product development, you are introducing a new product into your existing market. You’re effectively selling something different to the same customer, potentially encountering greater risks. With product development, a business usually has one of three choices.

 

Market Development;

Another option is market development, where you try to sell an existing product in a brand new market. For example, you may want to segment your existing market or reposition your product in it or target an entirely different geographical area. Market development is a growth strategy that involves selling your existing products or services to a new group of customers.

 

 

Diversification.

Lastly, with diversification, you are aiming to sell completely different goods or services to completely different customers. This is typically the riskiest of options; it requires both product and market development.

 

Starting and growing a business requires a significant amount of time, effort and planning. Quick decisions and big investments may be appealing, but unless they translate into functional and sustainable business models, the temporary excitement can lead to very public disappointment.

Before you take steps to grow your business, you need to document your growth strategy.