Introduction to Growth Strategy
If your business is experiencing stagnation or decline, then remember; you are not alone. Many businesses, in particular smaller businesses, struggle to show any significant year-to-year growth. Certainly, while external factors like the economy, changing regulations, and market disruptions can temporarily impact growth, it is important to remember that these external factors are rarely the root cause of systematic stagnation or decline, and remember this; they are temporary.
It’s human nature to look toward external reasons for why your business may not be achieving its full potential.
- If only the economy were stronger
- If your business sector wasn’t as crowded.
- Why can’t the state laws be friendlier to smaller businesses?
The list can become endless.
And it’s never helped by media reporting. After all, they have a story to tell and they’ll magnify it many times over. But none of these reasons will explain why your business, in particular, has become stagnant or is on a slippery slope to oblivion.
We have had the privilege of working with countless small businesses and startups for over 40 years. A company that plans and executes growth-related tactics is a growing company. These companies understand that continued growth has to be the subject of careful planning, it’s not going to fall out of the sky.
If you are ready to stop using external factors and begin the journey to focus on what’s important to your business, then read on.
Set Aside Time For Strategic Thinking
Managing customer inquires, handling suppliers, managing your cash flow, and keeping your staff productive, each one is more important than the other. But having to constantly manage these day-to-day problems can end in short-term thinking.
Give your brain the chance to think about long-term strategy, set aside at least 8 hours per month in your calendar for strategic planning – growth strategy. It will be the most important first step to seeing business growth. Brainstorm ideas, set targets, look into opportunities, and plan strategies.
As a business owner, president, or CEO, if you aren’t planning your long-term growth strategy, who is?
Addressing the day-to-day emergencies is very important but learn to delegate: it’s what your employees are employed to do. But looking toward long-term growth is something that only you’re qualified to do.
Create Accountability (With Your Growth Strategy)
Being accountable to someone is a crucial part of a growth strategy. Whether you’re a business owner, president, or CEO, you are far more committed to your cause if your share your vision for growth.
This boils down to one word, accountability. Setting your vision and making it public gives you full ownership and therefore responsibility for it. Public companies and their CEOs have to set out their targets to their shareholders, thereby creating accountability.
This, of course, does not apply to private business owners as they are not answerable to anyone. And that is why a growth strategy is important for them. There is no pressure to grow from outside sources so it has to be created internally. But it does have to be documented and shared with the business’s employees.
A growth strategy will empower you to establish and monitor your goals, tactics and put a timeframe to milestones. With a documented strategy any tactics missing your growth target are not working and need to be adjusted as needed or in the case of a drastic failure, try something different.
Your strategic planning will create accountability, forcing you to follow through on your growth targets. The next step is to start thinking tactically, ask yourself how you’ll achieve a particular goal. If, for instance, your goal is to double your revenue, then ask yourself:
- Why is the business stagnant?
- Why do I need to make a change there?
It is important to have a USP
Your Unique Selling Proposition – USP, is a really good way to get to the very root of your business’s stagnation. What is that thing that makes your business unique?
Ask yourself:
- What is unique about your business?
- Why should anyone buy your goods or services and not from your competitors?
- What is my company the expert at delivering to its customers?
Just hoping that a potential customer will choose your product or service without having a USP is the surest recipe for failure.
If there is nothing truly unique about your business then there is no reason as to why a customer should switch to you from a competitor. Most people have a reluctance to change so the reason needs to be a highly motivating one.
A strong USP is an essential component of any growth strategy. Growth comes from understanding why customers are buying from you, and how your service or product is different from your competition. With that in mind, if you don’t offer any unique benefits, you have to revisit your product or service immediately.
Understanding what is unique about your business and then communicating it to your customers is of the utmost importance. For instance: “With every dining meal you purchase, Greens will give one meal to a food bank. One for one”. This offer is Greens’ USP; every time you buy a meal from Greens, a family in need will benefit. This mission keeps Greens clear of any price, quality, and comfort comparisons.
Is Your Product/Service Valuable?
In addition to having a strong USP, your value proposition has to be clear from the outset. For example, what value is your current/potential customer getting from your product/service?
Is this value higher than the cost of the product/service? Most people will happily pay between $1,200-$1,800 for an Apple-branded laptop because they believe they are getting something more valuable in return. And considering how important a laptop is for work or education, it’s easy to see the value.
That being said, why would you pay $1,800 for an Apple laptop when you can get a similar experience from a Windows laptop for half the price? When you use a device every day, how that device makes you feel becomes very important. More specifically, usability, design, and quality become significant in your purchasing decision. More important than the processor speed, storage space, number of features, etc.
Let’s look at another example. At Walker & Sons (luxury kitchens), the typical customer is a busy professional couple who place more value on time, quality, and professionalism than the price. Therefore, build quality, uniqueness, superior craftsmanship, and full attention from the supplier are significant factors. On the other end of the spectrum, an average middle-class couple places a much higher value on price. Consequently, the latter couple is willing to accept a drop in quality and a longer time for work to be completed.
In summary, only focus on benefits your specific customers find valuable—for example, do they value convenience, cost, delivery speed, exclusivity, experience, design, or reliability?
Set Yourself Uncomplicated And Measurable Goals
At this point, you’ll have set yourself several goals, and whatever those goals are, remember this; complex goals are confusing and difficult to comprehend.
You cannot grow a business by yourself, so your employees and key stakeholders have to be clear on your growth goals. Also, fuzzy growth goals like “Double the business”, “Expand into new locations”, and “Look for new partner opportunities” are ineffective, because they are vague and impossible to measure and monitor.
All growth-related goals must be actionable, measurable, and timebound. For example, “Increase 2021 revenue by 30%, by converting 1,000 customers from a ‘standard’ to a ‘premium’ plan.”
Define Your Tactics
You need to ask yourself a question “How exactly are we going to reach our growth goals?”
Your vision or a high-level plan is a great beginning, but all goals need well-thought-out tactics. The intention is to define tactics to the point where you have enough to delegate and make a start. No more and no less. Tactics can, and probably will, change over time, so don’t spend too much time outlining every possible tactic and action.
Some of the tactics you have set out will prove effective and yet some will not. So, be ready to make any adjustments and move resources as needed. For example, you could create a premium trial campaign to entice standard plan customers to upgrade to the premium plan. If that proves ineffective, then we can try to produce an educational series highlighting premium features and their benefits.
Growth-related tactics are essential, but they don’t have to cover every single angle of your growth strategy. In general, your tactics will likely change over time; this is why excessive documentation on your part would be unwise. Simply define tactics to the point where you have enough to delegate and start. Strategies should be fluid.
Center Your Growth Strategy Around Your Customers
The first sign that your company is losing momentum is when you find that your customers have been persuaded to a new, more valuable proposition. This happens when a business becomes complacent. Stop paying attention to your customers and they’ll buy from your competition.
That is the reason any good growth strategy has to be centered around customers. For example; “How will growth strategy 1a help us serve our customers better, how will it impact their experience?”.
It can be all too easy to concentrate on new customers when aiming for growth while neglecting and negatively impacting your existing customers. Any strategy should address the impact any new tactics will have on existing customers as well as new ones.
For instance, how will the influx of new customers impact your support? If you currently just get by on a support staff of 2 for 1,000 customers, how will those 2 support staff perform with 2,000? By keeping your customers in mind while cultivating a growth strategy, you minimize the risk of neglecting any one particular customer type or segment.
Address Any Known Risks
Every growth strategy should outline potential risks and have a mitigation strategy in place. Known risks and the process for dealing with them should be established upfront.
Of course, not all risks will be identified at the beginning, but it would be foolish, and a false economy, to ignore known threats.
For example, regulatory changes, shifting trends, product recalls, or a new incumbent entering the market, are all potential risks that should be discussed and mitigated. Also, if you haven’t addressed those risks beforehand, you are far more likely to overreact and change your growth strategy every time you are faced with a new threat.
The mitigation steps you put in place with a cool head will almost always outperform your heat of the moment actions. It is, of course, correct to say that risks affiliated with growth are unknown. But, in fact, most will be known. So document potential risks and how you will deal with them. You’ll thank yourself when you encounter them.
Example of a Growth Strategy
As we mentioned earlier, try not to overcomplicate your growth strategy, especially at the start, that’s when you still have a lot of unanswered questions.
Here is a straightforward example to showcase the core elements of a great growth strategy.
Background
Our Home-made Ice Cream experienced impressive growth in its first 4 years of operation, growing from $0 to $2,500,000 in revenue. However, over the last 12 months, growth has stagnated, and revenue only increased by 4%.
Recent market research has validated that our “Cookie Dough” is still considered the best of its kind (locally). However, attracting new customers is becoming more and more difficult. Goal: Increase revenue in the next two years by 50%, by expanding beyond the greater Milwaukee area into two new markets.
Type of Growth Strategy
Market Development (selling current products in a new market).
Strategy
Focus on Madison (year 1), and then expand to Green Bay (year 2).
Tactics
- Partner with restaurants.
- Organize tasting events, and social media contests to increase brand awareness.
- Schedule press releases to increase interest and generate buzz.
- Organize interviews with local newspapers, bloggers, and other influencers.
- Implement targeted ads (Facebook, Google, and Instagram).
- Build a website personalization feature, so we can identify visitors from ‘expansion’ cities and offer them special promotions.
- Shift content marketing strategy toward ‘expansion’ cities.
Final Thoughts
It is no secret that the vast majority of high-performance companies have a clear growth strategy in place, regardless of their size. A growth strategy will document your growth vision, goals, and the tactics you’ll employ to achieve them. Just make sure everyone on your team is rowing in the same direction.
Finally, if you are new to strategic thinking and planning, your first growth strategy may need multiple revisions, but that’s ok. The fact that you took the time to document your growth strategy is more than most companies will ever do. Keep improving and refining it over time, and you will surely grow your business.