Successful business owners know that a business plan is essential – it guides decisions early on and focuses investments later. What many business owners overlook is the value of also developing a growth plan.
In this brief overview, Excelsior Growth Fund’s Business Advisory Services team reveals why a growth plan is important and what to include in yours.
Key differences between business plans and growth plans
While a business plan contains all of the key information needed to establish a viable company, a growth plan focuses specifically on those things that are needed to grow. In a nutshell, it’s less focused on operations and more on opportunities.
With this in mind, here are the “top 5” things to focus on in your business’s growth plan:
1. Opportunities for growth
Growth looks different from business to business. For some, it’s adding new locations, for others it’s adding new products or services, and for many, it’s a mix of the two. Regardless of the type of growth, it’s important to ask yourself how you can expand what you offer.
Once you identify some opportunities, do your research, just as you did when your business was in the pre-startup phase. While conducting your research, think about the following questions:
- What’s the demand for these new offerings?
- Who are your competitors?
- What differentiates your offerings this time around?
2. Key metrics and milestones
When developing a growth plan, it’s important to define the metrics and milestones that will be the hallmarks of your success. Since growth looks different from business to business, you should clearly identify your benchmarks and goals. Your benchmarks and goals may include expanding from one service to many, expanding your distribution, increasing your customer base and sales, or developing the most innovative products in your industry. Identifying these measures will focus your time and resources early on.
As you develop your goals, it’s also important to develop a timeline to meet them, including interim points for evaluation along the way, such as monthly or quarterly evaluations. This ensures your expansion stays focused while enabling you to make adjustments, when needed, to keep you on track.
Most growing businesses eventually need more staff. Before hiring new staff, it’s important to determine what key positions you need to add and if these positions will be permanent or temporary, full-time or part-time. This is one of the most expensive areas of business growth, so plan thoughtfully, and then allow yourself the time needed to get the right people in place.
Also, consider your role as your business grows. Early on, you likely wore many hats. Now, where are your time, talents and passion best spent? Conversely, some business owners envision growing to the point that a management team handles the day-to-day work, while you focus your attention and efforts on the big picture. If that’s your goal, clarify what it takes to get there.
4. Marketing strategies
Even if your business and brand are well-established, you still have to stay top-of-mind for your audience. When you launch new products or services, it’s a great time to re-engage existing customers while bringing new ones on board. One way to do this is to reward customer loyalty with a special offer or use another offer to gain new clients. You could also develop or redesign your website or logos to attract or re-engage customers. No matter what your marketing strategy is, be sure to account for all the time and costs when creating your growth plan.
Develop a marketing plan that builds on current successes. This doesn’t mean that you have to invest a lot of money – you just have to know how and where to reach your key customers. Use your email lists, social media channels and other low-cost and high-impact avenues to communicate often.
5. Financial condition
You’ve likely heard the old saying, “It takes money to make money,” and rarely is this truer than when businesses are growing. Is there enough money to fund growth now and to cover new costs?
Meet with your accountant to review your business’s financials, share your plans, figure out realistic costs and achievable revenue increases, and examine cash flow.
If cash flow is pinched, evaluate what you need to get you where you want to be. There are a lot of options: bringing on partners or investors, taking on business loans or reducing costs can all help. Talk to your accountant, your banker and other professionals for advice.
Successful growth takes planning
Businesses that offer quality products or services that people need, will grow – but without sound growth plans, it’s easy for businesses to become victims of their own successes. Be proactive and plan for your growth and you’ll ensure that you’ve got the support of new and existing customers, the right staff and the funds needed to fuel long-term success.