Growth Plan: What is it & How to Create One? (Steps Included)
“I want to increase sales this quarter. I want to expand my business this year. I want to hire new employees this month. I want to improve the quality of my product by the end of this year. I want to hit a new market target.”
If you run a business, you’ve probably said these things or something similar a thousand times. After all, every business has a list of goals they want to achieve by a particular time.
In a perfect world, we’d set goals, and we’d reach them without much effort. Unfortunately, in the real world, there are a lot of things we need to do after setting goals, like creating a growth plan.
A growth plan isn’t just about the goals and future of your business, but also the strategies you would implement to make sure that your vision comes to life.
Considering the fact that 50% of businesses fail during their first five years and 66% fail during their first ten, creating a solid growth plan is quintessential.
So, in this blog post, we’re going to tell you all about growth plans and how you can create one that works like a charm. So buckle up because you’re in for a ride.
Growth Plan: What Exactly is it? (Definition)
A growth plan is a strategic plan about how every aspect of your business will walk towards attaining the business goals. With a growth plan in hand, you’ll know exactly what to do, how, and when to do it.
Even though a growth plan sounds like the marketing tactics you’d implement to grow your business, it’s a lot more than that. It encompasses an overview of everything you’d be doing to grow your business.
Let’s understand the concept of a growth plan better with an example.
Suppose you’re running a gaming laptop business. Your goal is to increase your sales by 60% over the next five years. To achieve this goal, you might need to carry out a plethora of tasks like:
- Hiring new, more experienced sales reps.
- Upgrading the product after conducting market research.
- Finding investors who’d be willing to invest in the new version of the laptop.
- Hiring a social media marketer to handle your business’s social media accounts.
- Creating a TV advertisement that hits the right spot.
Now, you’d be writing all these things in your growth plan, along with other details like timeline, budget, name of the people responsible for carrying out a particular task, and more.
Want to know some other reasons why you need to create a growth plan? Let’s find out!
Read more: Growth Marketing: What is it & How to Carry it out for your Business?
3 Reasons Why You Should Create a Growth Plan
1. keeps you focused.
When you’re running a business, you usually try to flap your wings around in different places.
But, when some places don’t give you the results you expected, you get frustrated and realize that you wasted so much of your time and effort that you could’ve invested in other areas.
Well, a growth plan can help you avoid that frustration. With a growth plan, you’d know exactly what areas you should be focusing on and what areas you don’t need to pay attention to.
The result? You won’t be wasting any time and effort on places you won’t get any return from.
Read more: Business Development Plan: What Is It And How To Create A Perfect One?
2. Helps You When Things Go Sideways
We don’t want to scare you, but the landscape of the market is changing at a rapid pace.
That means things in your business can go haywire at any time. But, you really don’t need to worry about that if you have got a strong growth plan in place.
Like we said above, in a growth plan, you write all the strategies that’d lead you to growth. When things go wrong, you can just pick one of the strategies, modify them according to the current scenario, and you’re good to go!
3. Gives You a Direction
Your business isn’t a road trip. You can’t go rogue and see where the road takes you. You need a roadmap, a direction…and that’s exactly what a growth plan gives you.
A growth plan shows you the way towards achieving your goals. It tells you the route you need to take to reach your goals . Without it, you might end up taking the wrong turn and reach a dead end.
To put it simply, when you have a growth plan with you, you’ll know all about what you need to do to make your business successful.
Considering the importance of a growth plan, creating it is not something you can rush through. There are some steps that you need to follow, and we’re going to tell you all about them.
How to Create a Growth Plan In 5 Easy-Peasy Steps?
Set 1. set goals.
Every plan starts with setting business goals , and a growth plan is no different.
After all, you can’t just say “I want this” and expect something to happen automatically. You need to define what exactly you want to achieve, i.e., you need to set your goals.
Also, always make sure that your goals are not vague but realistic and measurable. For instance, “ Increasing sales ” isn’t a solid goal. “ Increasing sales by 20% over the next 6 months ” is the kind of goal you can measure.
Step 2. Conduct Market Research
You might think that once you’ve decided on your goals, you can just go ahead and start creating strategies. Unfortunately, it’s not that easy.
There’s another important step that you need to follow: carrying out market research. Creating strategies without considering the market is not going to help you achieve your goals.
Examine your target audience, the condition of the market, and your competitors. Evaluate what your audience is looking for, how saturated the market is, and what your competitors are doing.
Step 3. Evaluate Your KPIs
Once you’ve done the market research, it’s time to get back home, aka your business, and do some digging. You need to find out what’s working for your business and what’s not.
The best way to figure that out is by evaluating your KPIs. For those who don’t know, KPIs stand for Key Performance Indicators. They are the metrics that are “key” in determining your business’s success.
By assessing your KPIs, you’ll find out the key areas that are giving you the most fruitful results. You can then target these areas while you’re brainstorming strategies for growth. This brings us to the next step:
Read more: KPI Report: What it is & How to Create a Perfect One?
Step 4. Create Strategies
Okay, so now you know everything about the market and your company, so you’re all set to create strategies that you’d be implementing to achieve your goals.
From hiring new sales reps to upgrading your existing product – your strategies can be anything, as long as they help you achieve your goals.
We don’t need to say this, but make sure that your strategies align with your present and future budget. You don’t want to overspend right now and then be short of money when you execute a future strategy.
Step 5. Execute Your Plan
Brace yourselves because it’s time to get the ball rolling and execute the plan. Start implementing all the strategies according to the timeline you’ve set.
However, there’s something that you need to remember: Your plan isn’t a static piece of document. You need to keep modifying and updating it as you go.
Just follow the old saying, ‘ grow through what you go through .’ A strategy isn’t giving the results you expected? Change it. A strategy is working too well? Increase its timeline. A strategy isn’t in trend anymore? Slash it.
Yay! You’ve now learned how to create a solid growth plan.
Now, all that’s left for you to learn is how to create it the right way . See, your growth plan is a VERY essential document. You can’t just type all the strategies out and think that your growth plan is ready.
Your plan needs to have a proper structure and layout. It needs to be easy on the eyes and easy to comprehend. Most of all, it needs to be written after getting inputs from all the departments in your business.
It seems like a tough and long process, doesn’t it? It’s not, because Bit.ai is a platform where you can do all this and more. Want to know more about Bit.ai? Read on!
Read more: Growth Hacking: What is it & 21 Tools that can Help!
Bit.ai – The Perfect Tool for Creating Growth Plans & Other Business Documents
Yes, that’s the essence of Bit.ai – a document collaboration platform where you can create, organize, share and manage all company documents and other content.
You do not have to worry about formatting or designing your growth plan at all – just pick a template, and put all your strategies in it. Did you know that Bit gives you the option to choose from over 70 templates ?!
This nifty platform lets you and your team collaborate in real-time by co-editing, making inline comments, chatting via document chat, @mentions, and much more.
Want to make your growth plan more robust and comprehensive? Add rich media into it! Bit lets you add excel sheets, social content, cloud files, charts, surveys/polls, code, presentations, and much more to your documents.
One feature that makes Bit stand out is ‘smart workspaces’. On Bit, you can create infinite workspaces around projects and teams. This will help you in keeping all your documents related to your growth plan organized!
Bit.ai makes creating documents as easy as ABC, and there’s no reason why you shouldn’t give it a try.
There are some things in business you just can’t avoid, and creating a growth plan is one of them. If you don’t want your business to disappear into thin air, you need to create a proper growth plan.
A growth plan literally has the power to take your business to heights, but only if you create it properly and accurately. It’s not even a gigantic task, considering that you have Bit.ai with you.
So, what are you waiting for? Go ahead, start working on your growth plan and skyrocket the growth of your business. We’re totally rooting for you!
Got any questions or suggestions? Feel free to tweet us @bit_docs. We’d get back to you as soon as possible.
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Bit.ai is the essential next-gen workplace and document collaboration platform. that helps teams share knowledge by connecting any type of digital content. With this intuitive, cloud-based solution, anyone can work visually and collaborate in real-time while creating internal notes, team projects, knowledge bases, client-facing content, and more.
The smartest online Google Docs and Word alternative, Bit.ai is used in over 100 countries by professionals everywhere, from IT teams creating internal documentation and knowledge bases, to sales and marketing teams sharing client materials and client portals.
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Writing a Business Growth Plan
Table of contents.
When you run a business, it’s easy to get caught in the moment, always focusing on the day in front of you. But to be truly successful, you need to be looking ahead. You need to plan for your growth. To help with that process, many business owners write business growth plans, which provide a timeline for the next one to two years on how revenue can increase. In order to write an effective business growth plan, you need to understand what one is, the different types of strategies to consider, and how to project ways for your revenue to grow.
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.
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.
Share your growth plan with key employees as a motivator. When employees see an opportunity for increased responsibility and corresponding compensation, they’re more likely to stay.
What to include in a business growth plan
A business growth plan focuses specifically on expansion and how you’re going to achieve it. Creating a useful plan takes time, but the effort can pay off substantially by keeping your growth efforts on track. You should include these elements in your growth plan:
- A description of expansion opportunities
- Financial goals broken down by quarter and year
- A marketing plan of how you will achieve growth
- A financial plan to determine what capital is accessible during growth
- A breakdown of your company’s staffing needs and responsibilities
Your growth plan should also include an assessment of your operating systems and computer networks to determine if they can accommodate growth.
How to write a business growth plan
To successfully write a business growth plan, you have to do some forward thinking and research. Here are some key steps to follow when writing your business growth plan.
1. Think ahead.
The future is always unpredictable, but if you study your target market, your competition and the past growth of your company, you can plan for future expansion. The Small Business Administration (SBA) features a comprehensive guide to writing a business plan for growth.
2. Study other growth plans.
Before you start writing, review models from some successful companies.
3. Discover opportunities for growth.
With some homework, you can determine if your expansion opportunities lie in creating new products, adding more services, targeting a new market, opening new locations or going global, to name a few examples. Once you’ve identified your best options for growth, include them in your plan.
4. Evaluate your team.
Your plan should include an assessment of your employees and a look at staffing requirements to meet your growth objectives. By assessing your own skills and those of your employees, you can determine how much growth can be accomplished with your present team. You’ll also know when to start hiring additional people and what skill sets to look for in those new hires.
Review and revise your growth plan often – at least once a year.
5. Find the capital.
Include detailed information on how you will fund expansion. Business.gov offers a guide on how to prepare your request for funding, as well as how to connect with SBA lenders.
6. Get the word out.
Growing your business requires a targeted marketing effort. Be sure to outline how you will effectively market your business to encourage growth and how your marketing efforts will evolve as you grow.
7. Ask for help.
Advice from other business owners who have had successful growth can be the ultimate tool in writing your growth plan.
8. Start writing.
Business plan software has streamlined the growth plan process. Most software programs are geared toward business plans, but you can modify them to create a plan that focuses on growth.
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Company Growth Strategy: 7 Key Steps for Business Growth & Expansion
Published: April 17, 2023
A concrete growth strategy is more than a marketing strategy, it's a crucial cog in your business machine. Without one, you're at the mercy of a fickle consumer base and market fluctuations.
So, how do you plan to grow?
If you're unsure about the steps needed to craft an effective growth strategy, we've got you covered.
Business growth is a stage where an organization experiences unprecedented and sustained increases in market reach and profit avenues. This can happen when a company increases revenue, produces more products or services, or expands its customer base.
For the majority of businesses, growth is the main objective. With that in mind, business decisions are often made based on what would contribute to the company’s continued growth and overall success. There are several methods that can facilitate growth which we'll explain more about below.
Free Strategic Planning Template
Access a business strategic planning template to grow your business.
- Sales and Revenue Growth
- Growth of Customer Base
- Expansion into New Regions
You're all set!
Click this link to access this resource at any time.
Types of Business Growth
As a business owner, you have several avenues for growth. Business growth can be broken down into the following categories:
With organic growth, a company expands through its own operations utilzing its own internal resources. This is in contrast to having to seek out external resources to facilitate growth.
An example of organic growth is making production more efficient so you can produce more within a shorter time frame, which leads to increased sales. A perk of utilizing organic growth is that it relies on self-sufficiency and avoids taking on debt. Additionally, the increased revenue created from organic growth can help fund more strategic growth methods later on. We’ll explain that below.
Strategic growth involves developing initiatives that will help your business grow long term. An example of strategic growth could be coming up with a new product or developing a market strategy to target a new audience.
Unlike organic growth, these initiatives often require a significant amount of resources and funding. Businesses often take an organic approach first in hopes that their efforts will generate enough capital to invest in future strategic growth initiatives.
Internal growth strategy seeks to optimize internal business processes to increase revenue. Similar to organic growth, this strategy relies on companies using their own internal resources. Internal growth strategy is all about using existing resources in the most purposeful way possible.
An example of internal growth could be cutting wasteful spending and running a leaner operation by automating some of its functions instead of hiring more employees. Internal growth can be more challenging because it forces companies to look at how their processes can be improved and made more efficient rather than focusing on external factors like entering new markets to facilitate growth.
4. Mergers, Partnerships, Acquisitions
Although riskier than the other growth types, mergers, partnerships, and acquisitions can come with high rewards. There’s strength in numbers and a well-executed merger, partnership, or acquisition can help your business break into a new market, expand your customer base, or increase your products and services on offer.
Business Growth Strategy
A growth strategy is a plan that companies make to expand their business in a specific aspect, such as yearly revenue, number of customers, or number of products. Specific growth strategies can include adding new locations, investing in customer acquisition, or expanding a product line.
A company's industry and target market influence which growth strategies it will choose. Strategize, consider the available options, and build some into your business plan. Depending on the kind of company you're building, your growth strategy might include aspects like:
- Adding new locations
- Investing in customer acquisition
- Franchising opportunities
- Product line expansions
- Selling products online across multiple platforms
Your particular industry and target market will influence your decisions, but it's almost universally true that new customer acquisition will play a sizable role. That said, there are different types of overarching growth strategies you can adopt before making a specific choice, such as adding new locations. Let’s take a look.
Free Growth Strategy Template
Fill out this form to access your template, types of business growth strategies.
There are several general growth strategies that your organization can pursue. Some strategies may work in tandem. For instance, a customer growth and market growth strategy will usually go hand-in-hand.
Revenue Growth Strategy
A revenue growth strategy is an organization’s plan to increase revenue over a time period, such as year-over-year. Businesses pursuing a revenue growth strategy may monitor cash flow , leverage sales forecasting reports , analyze current market trends, diminish customer acquisition costs , and pursue strategic partnerships with other businesses to improve the bottom line.
Specific revenue growth tactics may include:
- Investing in sales training programs to boost close rates
- Leveraging technology to improve sales forecasting reports
- Using lower-cost marketing strategies to lower customer acquisition costs
- Continuing to train customer service reps
- Partnering with another company to promote your products and services
Customer Growth Strategy
A customer growth strategy is an organization’s plan to boost new customer acquisitions over a time period, such as month-over-month. Businesses pursuing a customer growth strategy may be more open to making large strategic investments, as long as the investments lead to greater customer acquisitions.
For this strategy, you may track customer churn rates , calculate customer lifetime value , and leverage pricing strategies to attract more customers. You might also spend more on marketing, sales, and CX , with new customer sign-ups as the north star metric.
Specific customer growth tactics may include:
- Investing in your marketing and sales organization’s headcount
- Increasing advertising and marketing spend
- Opening new locations in a promising market you’ve not yet reached
- Adding new product lines and services
- Adopting a discount or freemium pricing strategy
- Tracking metrics such as churn rates, customer lifetime value, and MRR
Marketing Growth Strategy
A marketing growth strategy — which is related, but not the same as, a market development strategy — is an organization’s plan to increase their total addressable market (TAM) and increase existing market share. Businesses pursuing a marketing growth strategy will research different verticals, customer types, audiences, regions, and more to measure the viability of a market expansion.
Specific marketing growth tactics may include:
- Rebranding the business to appeal to a new audience
- Launching new products to appeal to buyers in a new market
- Opening new locations in other regions
- Adopting a different marketing strategy, e.g local marketing or event marketing , to appeal to new markets
- Becoming a franchisor so that individual business owners can buy franchises from you
Product Growth Strategy
A product growth strategy is an organization’s plan to increase product usage and sign-ups, or expand product lines. This type of growth strategy requires a significant investment into the organization’s product and engineering team (at SaaS organizations). In the retail industry, a product growth strategy may look like partnering with new manufacturers to expand your product catalog.
Specific tactics may include:
- Adding new features and benefits to existing products
- Adopting a freemium pricing strategy
- Adding new products to the existing product line
- Partnering with new manufacturers and providers
- Expanding into new markets and verticals to increase product adoption
Not sure what all of this can look like for your business? Here are some actionable tactics for achieving growth.
How to Grow a Company Successfully
- Use a growth strategy template.
- Choose your targeted area of growth.
- Conduct market and industry research.
- Set growth goals.
- Plan your course of action.
- Determine your growth tools and requirements.
- Execute your plan.
1. Use a growth strategy template [Free Tool] .
Don’t hit the ground running without planning out and documenting the steps for your growth strategy. We recommend downloading this free Growth Strategy Template and working off the included section prompts to outline your intended process for growth in your organization.
2. Choose your targeted area of growth.
It’s great that you want to grow your business, but what exactly do you want to grow?
Your business growth plan should hone in on specific areas of growth. Common focuses of strategic growth initiatives might include:
- Growth in employee headcount
- Expansion of current office, retail, and/or warehouse space
- Addition of new locations or branches of your business
- Expansion into new regions, locations, cities, or countries
- Addition of new products and/or services
- Expanding purchase locations (i.e. selling in new stores or launching an online store)
- Growth in revenue and/or profit
- Growth of customer base and/or customer acquisition rate
It’s possible that your growth plan will encompass more than one of the initiatives outlined above, which makes sense — the best growth doesn't happen in a vacuum. For example, growing your unit sales will result in growth in revenue — and possibly additional locations and headcount to support the increased sales.
3. Conduct market and industry research.
After you’ve chosen what you want to grow, you’ll need to justify why you want to grow in this area (and if growth is even possible).
Researching the state of your industry is the best way to determine if your desired growth is both necessary and feasible. Examples could include running surveys and focus groups with existing and potential customers or digging into existing industry research.
The knowledge and facts you uncover in this step will shape the expectations and growth goals for this project to better determine a timeline, budget, and ultimate goal. This brings us to step four…
4. Set growth goals.
Once you’ve determined what you’re growing and why you’re growing, the next step is to determine how much you’ll be growing.
These goals should be based on your endgame aspirations of where you ideally want your organization to be, but they should also be achievable and realistic – which is why setting a goal based on industry research is so valuable.
Lastly, take the steps to quantify your goals in terms of metrics and timeline. Aiming to "grow sales by 30% quarter-over-quarter for the next three years" is much clearer than "increasing sales."
5. Plan your course of action.
Next, outline how you’ll achieve your growth goals with a detailed growth strategy. Again – we suggest writing out a detailed growth strategy plan to gain the understanding and buy-in of your team.
Download this Template
This action plan should contain a list of action items, deadlines, teams or persons responsible, and resources for attaining your growth goal.
6. Determine your growth tools and requirements.
The last step before acting on your plan is determining any requirements your team will need through the process. These are specific resources that will help you meet your growth goals faster and with more accuracy. Examples might include:
- Funding: Organizations may need a capital investment or an internal budget allocation to see this project through.
- Tools & Software: Consider what technological resources may be needed to expedite and/or gain insights from the growth process.
- Services: Growth may be better achieved with the help of consultants, designers, or planners in a specific field.
7. Execute your plan.
With all of your planning, resourcing, and goal-setting complete, you’re now ready to execute your company growth plan and deliver results for the business.
Throughout this time, make sure you’re holding your stakeholders accountable, keeping the line of communication open, and comparing initial results to your forecasted growth goals to see if your projected results are still achievable or if anything needs to be adjusted.
Your growth plan and the tactics you leverage will ultimately be specific to your business, but there are some universal strategies you can implement when getting started.
To expand a business and its revenue, companies can implement different strategies for growth. Examples of growth strategy include:
Growth Strategy Examples
- Viral Loops
- Milestone Referrals
- The 'When They Zig, We Zag' Approach
- In-Person Outreach
- Market Penetration
- Market Development
- Product Development
- Growth Alliances
- Organic Growth
- Social Media
- Excellent Customer Service
1. Viral Loops
Some growth strategies are tailored to be completely self-sustainable. They require an initial push, but ultimately, they rely primarily (if not solely) on users' enthusiasm to keep them going. One strategy that fits that bill is the viral loop.
The basic premise of a viral loop is straightforward:
- Someone tries your product.
- They're offered a valuable incentive to share it with others.
- They accept and share with their network.
- New users sign up, see the incentive for themselves, and share with their networks.
For instance, a cloud storage company trying to get off the ground might offer users an additional 500 MB for each referral.
Ideally, your incentive will be compelling enough for users to actively and enthusiastically encourage their friends and family to get on board. At its best, a viral loop is a self-perpetuating acquisition machine that operates 24/7/365.
That said, viral loops are not guaranteed to go viral, and they’ve become less effective as they’ve become more commonplace. But the potential is still there.
Part of the appeal is that the viral loop flips the traditional funnel upside-down:
Instead of needing as many leads as possible at the top, a viral loop funnel requires just one satisfied user to share with others. As long as every referral results in at least 1.1 new users, the system continues growing.
2. Milestone Referrals
The milestone referral model is similar to the viral loop in that it relies on incentives to kickstart and sustain it. But milestone referrals add a more intricate, progressive element to the process.
Companies that leverage viral loops generally offer a flat, consistent offer for individual referrals — businesses that use milestone referrals offer rewards for hitting specific benchmarks. In many cases, "milestones" are metrics like the number of referred friends.
For example, a business might include different or increasingly enticing incentives that come with one, five, and 10 referrals as opposed to a fixed incentive for each referral. A company will often leverage this strategy to encourage users to bring on a volume of friends and family that suits its specific business goals.
The strategy also adds an engaging element to the referral process. When done right, milestone referrals are simple to share with relatively straightforward objectives and enticing, tangible products as rewards.
Word-of-mouth is organic and effective. Recommendations from friends and family are some of the most powerful incentives for consumers to purchase or try a product or service.
The secret of word-of-mouth’s effectiveness lies in a deeply rooted psychological bias all people have — we subconsciously believe the majority knows better.
Social proof is central to most successful sales copywriting and broader content marketing efforts. That's why businesses draw so much attention to their online reputations.
They know in today's customer-driven world — one where communication methods change and information is available to all — a single negative blog post or tweet can compromise an entire marketing effort.
Pete Blackshaw , the father of digital word-of-mouth growth, says, "satisfied customers tell three friends; angry customers tell 3,000."
The key with word-of-mouth is to focus on a positive user experience. You need to grow a base of satisfied customers and sustain the wave of loyal feedback that comes with it.
With this method, you have to focus on delivering a spectacular user experience, and users will spread the word for you.
4. The "When They Zig, We Zag" Approach
Sometimes the best growth strategy a company can employ is standing out — offering a unique experience that sets it apart from other businesses in its space. When monotony defines an industry, the company that breaks it often finds an edge.
Say your company developed an app for transitioning playlists between music streaming apps. Assume you have a few competitors who all generate revenue through ads and paid subscriptions — both of which frustrate users.
In that case, you might be best off trying to shed some of the baggage that customers run into trouble with when using your competitors' programs. If your service is paid, you could consider offering a free trial of an ad-free experience — right off the bat.
The point here is that there's often a lot of value and opportunity in differentiating yourself. If you can "zig when they zag", you can capture consumers' attention and capitalize on their shifting interests.
5. In-Person Outreach
It might be a while before this particular approach can be employed again, but it's effective enough to warrant a mention. Sometimes, adding a human element to your growth strategy can help set things in motion for your business.
Prospects are often receptive to a personal approach — and there's nothing more personal than immediate, face-to-face interactions. Putting boots on the ground and personally interfacing with potential customers can be a great way to get your business the traction it needs to get going.
This could mean hosting or sponsoring events, attending conferences relevant to your space, hiring brand ambassadors, or any other way to directly and strategically reach out to your target demographic in person.
6. Market Penetration
Competition is a necessary part of business. Imagine that two companies in the same industry are targeting the same consumers. Typically, whatever customers Business A has, Business B does not. Market penetration is a strategy that builds off of this tug-of-war.
Market penetration increases the market share — the percentage of total sales in an industry generated by a company — of a product within a given industry. Coca-Cola, the most popular carbonated beverage in the United States, has a 42.8% market share. If competitors like Pepsi and Sprite were looking to increase market penetration, they would need to increase market share. This increase would imply that they are acquiring customers that were previously buying Coca-Cola or other carbonated beverage brands.
While lowering prices and advertising are two costly yet effective tactics to increase market share, they are part of a series of methods businesses can use for overall sales and customer retention.
If a company feels as if they have plateaued and its current market no longer has room for growth, it might switch strategies from market penetration to market development. While market penetration focuses on a company and its current market, market development strategies lead businesses to tap into a new one.
Companies can decide to manufacture new products or find an innovative use for their project. Take Uber. Although few would say that the rideshare company has plateaued, six years after its launch in 2009, Uber launched UberEats, its online food ordering, and delivery platform. The company already had drivers set to take passengers to their destinations. Uber expanded their idea and has become one of the biggest names in the food delivery industry.
8. Product Development
For growth, many businesses need to introduce something new. Product development — the creation of a new product or the enhancement of an existing one — allows companies to attract new customers and retain existing ones.
Online fast-fashion retailers are an example of this. A company like ASOS built its brand off of clothing. To appeal to a bigger customer base, it has since added face and body products, a collection made up of ASOS products and other popular brands. If an interested customer prefers to shop for their clothes, makeup, and skincare products at once, the brand now serves as a big draw.
9. Growth Alliances
Growth alliances are strategic collaborations between companies. They further the growth goals of the involved parties. Take JCPenney and Sephora. For Sephora, it can’t hurt for the makeup retailer to have more stores across the country. JCPenney, however, needed to keep up with powerhouses like Macy’s and its fully-fledged makeup section.
In 2006, Sephora began opening stores inside JCPenney. As of 2022, Sephora Inside JCPenney is now in over 574 stores. Simultaneously, JCPenney now carries a selection of makeup to rival competitors.
Companies can use an acquisition strategy to promote growth. By acquiring other businesses, companies expand their operations through creating new products or expanding into a new industry. One of the more obvious ideas for growth, this strategy offers significant benefits to companies. They allow for faster growth, access to more customers, lower business risk, and more.
Founded in 1837, Procter & Gamble is a consumer goods company known for its acquisitions. It initially started in soaps and candles but currently has 65 acquired companies that have allowed it to expand into different markets. The list includes Pampers, Tide, Bounty, Tampax, Old Spice, and more. Although its sales dipped between 2016-2019, Procter & Gamble’s net sales for 2021 were $76 billion, its best year within the last decade.
11. Organic Growth
As mentioned previously, organic growth is the most ideal business growth strategy. It could look like focusing on SEO, developing engaging content, or prioritizing advertisements. Instead of focusing on external growth, organic growth is a sustainable strategy that promotes long-term success.
12. Leverage Social Media
Having a strong social media presence can be invaluable to marketing and business growth. Be sure to establish brand pages on all social media platforms like Instagram, Facebook, Pinterest, TikTok, Twitter, etc. Social media can help you increase engagement with your target audience and make it easier for potential customers to find your brand. It’s also great for word-of-mouth promotion as existing customers will likely share your content with their network.
13. Provide Excellent Customer Service
It can be tempting to focus on acquiring new customers, but maintaining loyalty with your existing customers is just as important. Providing an excellent customer service experience ensures that you’ll continue to keep the customers you have, and there’s a good chance you’ll reap some referrals too.
The Key to Growing Your Business
Controlled, sustainable growth is the key to successful businesses. Industries are constantly changing, and it is the responsibility of companies to adapt to these changes.
Successful companies plan for growth. They work for it. They earn it. So what's your plan?
Editor's note: This post was originally published in March 2020 and has been updated for comprehensiveness.
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Building your business growth plan
Why is a business growth plan important, what are the most important things to include in my business growth plan, assessing the business, setting goals, developing a strategy, summing it up.
If you own a business, you’ve set goals. Maybe there’s a series of benchmarks you’d like to hit or a clear vision of where you’d like to see the business in 10 years.
But long-term success is built on short-term tactics and medium-term strategy, as much as drive and vision. How will your business have changed six months from now? How about in one year, or three? If you don’t have clear answers to these questions, it’s time to develop a business growth plan.
A business growth plan is a detailed roadmap for where you want to take your business in the short to medium term. The plan views your business objectively, taking a full account of its strengths and weaknesses, opportunities and limitations. It positions you to build on what you’ve already achieved by helping you define where you’ve been, where you’re going and how you’re going to get there.
A well-constructed growth plan enables you to:
- Measure your market share and penetration, helping you to grow your slice of the pie
- Offset the losses you probably took during the earliest days of your business
- Reduce your risks by having concrete plans for every step of the growth process
- Stabilize your revenue streams by helping you envision what tomorrow will look like
- Attract potential investors by demonstrating that you have solid plans to grow their investment
Simply put, your business will be more successful with a growth plan than it would be without one. And if you don’t have a plan, you’ll probably end up losing ground to your competitors who do.
TIP: You don’t have to start from scratch: There are a lot of detailed templates for business growth plans available free online to Canadian entrepreneurs. Just make sure you find one that’s a good fit for your needs and the challenges of your industry.
Here are key must-haves that your business growth plan should include:
- A clear assessment of your business, including its position in the marketplace, its advantages and where it needs to improve ;
- Statements of your goals for the business in six months, one year, two years, and so on ;
- The steps you plan to take to get your business from where it is to where you want it to be .
Of course, all this is easier said than done. But the good news is that your plan doesn’t have to be perfect—circumstances can and will change over time and you’ll have to revise the plan accordingly. The critical task is to explicitly lay out these elements, both for yourself and for the other vital players in your business, to get everyone thinking about the future along the same lines.
Here are a four key questions to ask when assessing your business:
1. What’s my value proposition?
You’ve probably thought about this already, but it’s important to break down your value proposition into its most basic elements:
- What makes you better than the competition?
- Why should potential customers come to you instead of them?
- Why is your business relevant and why does it deserve to grow?
By answering these questions, you can focus on what’s most important and hone your message to your customers.
2. What are my company’s strengths and weaknesses?
There are many things that your business does well, just as there are probably areas where it struggles. It’s essential that you identify which is which. This will help you figure out how to reposition the field to maximize your company’s strong points and minimize—or even eliminate—its weaknesses.
3. What are my strengths and weaknesses?
At first, this may seem like the same question as above, but there’s a critical distinction between the two. You may live and breathe your business, but you aren’t your business. And its strengths and weaknesses aren’t necessarily the same as yours. For example, maybe you excel at customer service, but you have trouble managing your supply chain. Identifying your own shortcomings is a vital step—even if the process is painful-- towards helping your business succeed.
4. Who’s my competition and how can I learn from them?
Let’s face it: No matter what industry you’re in, you’ve probably come up against tough and savvy competitors. And odds are, they’re doing better than you in certain areas. You can gather valuable insights by observing your competitors closely, noting what they do differently and why they’ve made specific choices. Culling ideas from—and even improving on—your competition is a smart business practice and a good reminder that we can all learn from each other.
Here are four questions to ask when setting business goals:
1. How am I measuring success?
You’ve heard the old maxim: “What gets measured gets managed.” If you have no objective way to measure your business success, you can’t be certain where it’s succeeding—or falling short. Make sure to identify the key indicators having the biggest effect on your business growth, so you can focus your efforts on them.
2. Who’s my ideal customer now and in the future?
Your business was built to provide a service or solve a problem for certain people. Who are those people? What are the characteristics that identify them as potential customers? Is this group likely to change as you grow your business? The ideal customer often changes just as the business does, so be ready to adjust your approach.
3. What are my biggest revenue streams and how can I improve them?
It’s critical to have a firm idea of your revenue streams, so you can make detailed plans. Are your current revenue streams expanding, and is that expansion sustainable? What new revenue streams could your business tap into and at what cost? Revenue is the lifeblood of your business—any activity that isn’t associated with revenue generation might be a waste of your time and resources.
4. What are my targets?
It wouldn’t be a growth plan if you didn’t lay out specific, achievable targets. While it’s OK if some of your goals are more intangible—after all, not everything can be measured exactly—make sure most of the targets you set are measurable. For example, you could aim to increase your online revenue by 15% in the next six months or break into a specific target market within two years.
Remember: You may not be able to reach all of your goals, especially if they’re overly ambitious. But that’s OK—even necessary. Understanding how and why you fell short, and how you can do better, might be the best way to strengthen your business overall.
Here are key questions to ask when developing your strategy:
1. What kind of growth strategy is right for me?
This is a big question, but luckily, it’s not as complicated as you may think. While there are almost as many growth strategies in the world as there are businesses, they can all be sorted into a few major types:
- Development strategies refer to breaking into new markets. They’re best suited for businesses that have done all the growth they can within the limitations of their current markets.
- Diversification strategies mean broadening both your product and service offerings and your target markets. This is a big ask, so they’re usually best suited for smaller, newer businesses that have lots of room to grow, but on a modest budget.
- Market strategies refer to how you’re interacting with and developing your current market. If your business has access to a big market, but is only getting a fraction of its business, you’ll probably want a market strategy to increase the proportions.
- Product strategies focus on evolving the products and services offered by your business. This can mean increasing their quality and selection, lowering prices through efficiencies, and more.
When you’ve done a thorough assessment of your business and your goals, you’ll be in a good position to assess what type of growth strategy fits your situation best.
2. What goals are my top priority?
You probably can’t tackle all of your goals at the same time, so triaging is necessary. Which of the goals you’ve listed would be most beneficial—and which are the most urgent? Do your top goals depend on accomplishing others first or are they standalones? Do you have all the resources you need? If not, how can you get them? Having a clear list of priorities will be a big help in deciding the best way to tackle the challenges in front of you.
You know your business better than anyone, so don’t be afraid to expand on the above guidelines as needed. It’s almost impossible for you to hurt your business by planning too extensively, but it’s all too common for businesses to be hurt by not planning enough. No matter what your specific challenges are, engaging with them now is the best way to start coming up with solutions. The sooner you get started, the better off you’ll be.
All this can seem intimidating, but you’re not alone. There are many free resources available to help Canadian entrepreneurs grow their business nationally and internationally. Here are a few examples to help you build a greater understanding of how you can develop your growth plan.
What is MyEDC?
MyEDC is a free service we provide to all Canadians. We've gathered the resources, services and tools you need to protect and grow your business—all in one spot—get clear answers, make smart moves and succeed anywhere in the world.
You can find out more about MyEDC here . If you’re running a business in Canada, we can help you grow and expand into international markets. MyEDC is one of our best avenues to support your business.
Note: The contents of this article are intended to be used for general information purposes only and are not to be construed as legal advice. Please consult a legal representative for advice on your specific circumstances.
BDC: Manage your growth
Our partners at Business Development Bank of Canada (BDC) have spent a lot of time thinking about how you can grow your business. This is a free collection of their most valuable resources.
Government of Canada–Small Business Services
This resource hub is focused on small business development in Ontario, but almost everything it has to offer applies anywhere in Canada.
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What it means for your business
How to Write a Growth-Oriented Business Plan
5 min. read
Updated October 27, 2023
The business plan for strategic growth is one of my favorites because it’s about core business decisions, steps, metrics, and making things happen. It matches my vision of business planning as ongoing management and steering a business.
It’s not about explaining or defending a business for outsiders. It’s about what’s supposed to happen.
- Key components of the business plan for strategic growth:
- Milestones and metrics
- Essential business numbers
Let’s look at each of these.
- 1. Strategy
Strategy can be as simple as a list of bullet points, or brief descriptions, or even a series of photos.
Strategy is focus. Strategy is what you’re not doing.
My favorite metaphor is the sculptor with a block of marble—the art is what he chips off the block, not what he leaves in. Michelangelo started with a big chunk of marble and chipped pieces off of it until it was his David. So, strategy in your business plan serves as a reminder of what’s most important.
Michael Porter, who is perhaps the best-known business writer on strategy, said:
“The essence of strategy is choosing what not to do.”
I’ve worked on business strategy for several decades. I was a VP of a consulting company called “Creative Strategies.” I’ve come to realize that strategy is like driving and sex—we all think we’re pretty good at it.
But simplifying, doing today what will seem obvious tomorrow, is genius. I always say that the best strategies seem obvious as soon as you understand them. Furthermore, it seems to me that if they don’t seem obvious after the fact, they didn’t work.
What’s your biggest business challenge right now?
Identity, market, and offering.
I’ve dealt with dozens of strategy frameworks, and they all work pretty well if applied correctly. Still, my favorite is the one we use with LivePlan: problem, solution, market, and identity (or why us ). Don’t pull them apart. It’s the interrelationship between them that drives your business. Each affects the other two.
The problem you solve
We forget too often, so start with this: Your business is not about you, what you like to do, or what you want from it. It’s about your customers. And, most important, the problem you solve for your customers.
In a social media company that posts updates for its clients, the problem it solves is not social media; it’s getting the word out, and getting people to know you.
My favorite restaurant doesn’t just feed me a meal; it gives me healthy, delicious food, in a comfortable environment, a place I like to be for an hour or two with my wife.
Every business had better be solving a problem. If not, it’s continued existence is threatened.
Your solution to the problem above is your product or service. You can already see from the restaurant example that the choice of market influences the business offering. That’s strategy at work.
Your identity influences your choice of market, which influences your choice of product. Your choice of product influences your choice of market. They have to work together.
Your identity influences your choice of target market . The more tightly identified, the better.
Successful restaurants focus on people in certain areas with defined tastes, price sensitivity (or not), time sensitivity (or not), couples, parents with kids, business travelers, and so on.
What part of the market do you identify with? Who are you most comfortable serving?
Identity (in other words, “why us”)
Every business has its core identity. How are you different from others?
What are your strengths and weaknesses? What is your core competence? What are your goals? What makes you different?
These four choices are your business strategy. The growth in your strategy is what makes the difference.
Is there room in your current strategy to grow the business? Are you looking at a new market, maybe contiguous to your existing market? New products? The genius is finding the opportunity for growth, and managing the steps and resources to make it happen.
Don’t pull the strategy apart. Don’t take the various elements one at a time. Don’t ever stop thinking about them. Remember, in planning as well as in all aspects of business, things change.
Keep watching for this change. Change is the opportunity to grow.
- 2. Execution
Strategy is meaningless without execution.
Execution tactics are the steps, the activities, the decisions you make and paths you take to execute on strategy.
Execution tactics are the key elements of a marketing plan, product plan, and finance plan. Pricing, products, promotion, messaging, channels, social media, support, lead generation—it’s all about execution. And you can’t do a strategic growth plan without working through the tactics that will execute the strategy.
In the plan itself, as with strategy, tactics are only as formal as you need for execution. They are probably simple lists and bullet points. A Lean Plan is a good framework. No need to elaborate if your plan is for your team only, to manage growth. But write them down so you can use them later as reminders, and checklists for analyzing execution. The main use of your plan is for constant review and revision, like a business dashboard.
As you work with tactics, think about strategic alignment . Make sure your tactics match your strategy. If you have a high-price, high-value strategy, make sure your pricing and product offerings match. Make sure your messaging, channels, and promotions match. That’s strategic alignment.
- 3. Milestones and metrics
Your goal is execution, and milestones and metrics inform execution. Think of dates, deadlines, and concrete specifics.
Ask yourself how you’ll know as you execute your strategy whether or not you are on track. People like working toward milestones , and they like seeing their progress marked in specific and concrete metrics.
Metrics are sales and spending, of course . But also, depending on your type of business, other performance indicators like traffic, leads, conversions, presentations, visits, trips, engagements—and even likes, retweets, and follows. Make your metrics measurable and meaningful.
In your strategic growth plan, milestones and metrics are beautifully edited text. They are lists. They are dates, teams, names, and numbers.
- 4. Essential business numbers
Real planning has to be rooted in specifics, including sales, spending, and cash flow.
If you have an existing business, you are probably already managing cash flow and reviewing your performance and against your forecasted numbers regularly.
- 5. From then on, keep it fresh
The business plan is just the first step. From there, your projections lead you gracefully into reviewing plan versus actual results and looking for course corrections.
I call this the planning process, involving regular reviews. You track results, you compare the results to plan, and this year to last year. And you make course corrections, or stay the course, depending on what you decide.
Remember what former president Dwight Eisenhower said: “The plan is useless, but planning is essential.
To learn more about the growth planning process, check out the LivePlan Blog .
See why 1.2 million entrepreneurs have written their business plans with LivePlan
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
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Writing a Business Plan: Choosing a Growth Strategy
After launch, what's going to be your growth strategy?
Potential investors who read your business plan will want to know about your growth strategy—how you plan to grow your business once it's launched and off the ground.
Your growth strategy entails more than just demonstrating how your revenue will grow. This section of your business plan is about proving to others that you have a plan for bringing your product to new customers and new markets, and perhaps even introducing new products.
The obvious objective in outlining your growth strategy is to show how these moves will increase sales. This can happen in a number of ways.
If your business requires a retail presence, outline where you might seek to open additional shops and what your geographic strategy will be. Don’t assume you can go national just because your product is regionally successful.
New Client Acquisition
Once you’ve reached your original core customers, who else might be interested in your products? If you’re a business-to-consumer company, think about offering business-to-business services, and vice-versa. Office supply stores, for example, have been very successful at catering to the needs of individuals as well as small-business owners.
New products are an obvious way to grow sales, but their issuance often is poorly executed. Discuss your plan for introducing new products or services in the short, medium and long-term. These can be variations of your core product or completely new offerings that expand your overall base.
Restaurants often turn to franchising, and it is a feasible option for many other industries as well. Franchising works best when your product is consistent and customers have certain expectations about your brand.
How will you use the internet to grow your sales? Will you sell your product on your own corporate website, partner with an existing internet retailer or maybe advertise online to build local brand awareness? Using the web is not mandatory for selling your product, but your growth strategy should include an online element.
Look back at the marketing section of your business plan. If you’ve already addressed facets of your business growth strategy in that section, you can use it to detail your expansion, and then refer to your marketing section as an implementation tool.
Growth has bottom-line advantages, too. The more business you do, the more you can take advantage of learning curves and economies of scale. Learning curves allow you to become more efficient as you gain experience. Economies of scale refer to a reduction in average cost over time because of factors such as buying power and managerial specialization.
A final option to address is growth through acquisition. This would come into play after your startup is more established and ready to expand into other markets. At this stage, you may want to address which companies, or types of companies, would make ideal acquisition targets. Look for companies that are a good fit for your product and distribution methods, but that also present new opportunities for growth. Any duplication from an acquisition should be balanced out with growth areas.
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Growth rules: Which matter most?
In a recent article , we explained that achieving sustainable, profitable growth requires companies to actively choose growth through a holistic approach comprising three elements: developing an aspirational mindset and culture, activating pathways, and executing with excellence. 1 “ Choosing to grow: The leader’s blueprint ,” McKinsey, July 7, 2022. We then set out to bring those pathways to life through the ten rules of growth (see sidebar, “The ten rules of value-creating growth”), based on an in-depth study of the growth patterns and performance of the world’s largest public companies. 2 Chris Bradley, Rebecca Doherty, Nicholas Northcote, and Tido Röder, “ The ten rules of growth ,” McKinsey, August 12, 2022.
The ten rules of value-creating growth
Our research suggests ten imperatives that should guide how executives pursue growth pathways.
- Put competitive advantage first. Do you have a winning, scalable business model?
- Make the trend your friend. Will your strategy shift your portfolio toward granular pockets of profitable market growth?
- Don’t be a laggard. How do you benchmark your growth to that of your peers, and are you running faster?
- Turbocharge your core. Is your core business primed for growth? If not, what will it take to reignite that growth?
- Look beyond the core. A typical business generates 20 percent of revenue outside the core. Does yours?
- Grow where you know. Are you prioritizing new business opportunities where you are a natural owner?
- Be a local hero. Do you have a winning formula for your home market?
- Go global if you can beat local. Do you have a transferable advantage that can be leveraged to expand internationally?
- Acquire programmatically. Do you have a blueprint that outlines why, where, and how you will pursue programmatic M&A?
- It’s OK to shrink to grow. Are there parts of your portfolio that you can divest to fund growth?
We have since discussed this “growth code” with dozens of executives and boards to help them calibrate their growth strategies. In these conversations, one question keeps recurring: Are all these rules equally important?
The answer, of course, is no. The impact of near-core diversification or international expansion, programmatic M&A strategies or industry outperformance will depend heavily on a company’s context. But on average, what is the relative importance of each rule for a typical growth strategy?
To find the empirical answer, we went back to our data set of nearly 1,600 companies and looked at how mastering each rule would affect an organization’s probability of achieving TSR higher than its industry median. We then derived each rule’s relative impact on the probability of TSR outperformance. The resulting ranking lists the ten rules based on their relative impact: companies that mastered the rule were between 1.1 to 1.7 times more likely to beat their industries than those that had not (exhibit).
While the first rule—“put competitive advantage first”—falls in the middle of the pack, having a clear source of competitive advantage is a prerequisite for profitable growth. Companies with low returns need to transform their business models before investing in growth—otherwise, they might struggle to attract and deploy growth capital. Mastering this rule makes companies 1.3 times more likely to outperform their industries on shareholder returns.
“Don’t be a laggard” is the rule that emerged at the top of our ranking. Winning market share away from competitors is a sign of a superior business model, which investors tend to reward. As a result, such companies are 1.7 times more likely to generate peer-beating returns than those lagging behind their industries. While faster growth typically correlates with better returns, we were surprised that outgrowing your peers matters so much more than simply being in a fast-growing market (“make the trend your friend”).
Two rules—“turbocharge your core” and “be a local hero”—covering investment in growth within a company’s core industry or region (those contributing the largest share of revenue) have the second-highest impact of all the rules, at 1.6 times. This makes intuitive sense, as it is very difficult (although not impossible) to achieve enterprise-level growth if the largest parts of your portfolio are not firing on all cylinders. The takeaway is that companies with slow-growing cores should take a fine-grained view of their markets to unearth granular pockets of opportunity—for example, subdividing markets into combinations of customer or business segments and regions—to ensure they allocate capital to the fastest-growing combinations. Companies that lack this option should consider divesting underperforming parts of their portfolios, freeing up capital to pivot to other industries or regions (see the tenth rule, “shrink to grow,” which generates similarly positive returns).
Three of the rules (“look beyond the core,” “grow where you know,” and “go global if you can beat local”) highlight the importance of pursuing growth beyond the core. Across our sample, about 20 percent of total growth came from industries outside the companies’ core business, and 50 percent of all growth came from international markets. Businesses that leverage a source of competitive or ownership advantage to expand into adjacent industries or geographies are 1.2 to 1.3 times more likely to generate peer-beating returns than those that focus solely on their core. The implications for growth strategy are clear: keep refreshing your portfolio of businesses and continuously scan for new growth markets.
Finally, this research reaffirms the long-established fact that it is difficult for companies to consistently generate value-creating growth purely organically or through large acquisitions. 3 Robert Uhlaner and Liz Wol, “ Programmatic M&A: Winning in the new normal ,” McKinsey, March 21, 2022. Those with a programmatic approach to M&A (the ninth rule) are 1.2 times more likely to deliver peer-beating returns and successfully unlock the key growth pathways of expanding the core, innovating into adjacencies, and igniting breakout businesses.
While the impact of individual rules may differ, the biggest benefits come from combining them. In other words, the more rules companies master, the better they will perform. On average, companies that mastered two or three rules generated industry median shareholder returns, while the 38 percent of companies that mastered four or more generated more than four points of excess shareholder returns.
A deeper understanding of the relative importance of growth levers can help executives prioritize growth opportunities. But remember that sustaining profitable growth requires pairing winning strategies with an organization-wide commitment to “choosing growth,” backed by strong execution.
Chris Bradley is a senior partner in McKinsey’s Sydney office, Rebecca Doherty is a partner in the Bay Area office, Tido Röder is an associate partner in the Munich office, and Jill Zucker is a senior partner in the New York office.
This article was edited by Joanna Pachner, an executive editor in the Toronto office.
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What is Business Growth? [A Guide for Small & Midsized Companies]
What is business growth? If you’re a small or medium-sized company, the first step is understanding the definition of business growth. Then it’s learning how to better achieve and maintain the growth you want.
How to Define (and Achieve) Business Growth for SMBs
This is the ultimate guide to defining what is business growth and development for small and medium-sized companies.
If you want to:
- Be a growth-driven company,
- Zero in on types of business growth and why they’re important,
- Build what ultimately is a better business growth plan for your company,
… then you’ll love this guide. Let’s get started.
What’s Covered in This Guide
Click on each to jump to that section.
What is Business Growth?
How do you define business growth for your company.
- What are the Types of Business Growth?
Why is Business Growth Important for Small Companies?
What are growth strategies in business [4 types], how can you enhance the growth of the company [6 tips], how to maintain business growth and measure progress.
Business growth is a stage of a company’s lifecycle that is triggered by increased:
- Customer base
- Market share
- Opportunity to generate equity value
- Expansion of operations and other aspects of the organization
Business growth is an important goal for many entrepreneurs and it’s:
- The catalyst for transforming a start-up into a small business, a small business into a medium-sized company, and expanding an organization from there.
- Why leaders create plans and objectives that work together to align with the strategic vision they have for their companies.
- A critical factor that influences the success of any company.
A complete what-is-business-growth definition includes the idea that growth is something that must be measured to determine if it’s happening. Whether it’s impacted by leadership decisions, business opportunities, consumer trends, or something else, business growth starts with improved metrics that indicate success. That’s why companies will implement a business growth plan to measure growth’s progress.
Do you want to grow your business, or do you want to run a growth-driven company? Defining business growth for your own company comes down to understanding the difference between the two.
- A growing business focuses primarily on fast growth.
- A growth-driven business focuses primarily on sustainable growth.
Here are four considerations to help you assess whether you’re a growing business or a growth-driven business:
1. How do your marketers and sales reps get along?
Sometimes marketing thinks sales doesn’t get that the content they create can persuade people to buy. Sometimes sales thinks marketing doesn’t get how their strategies work to create selling opportunities.
A growing business may only want to pursue the quick sale, regardless of whether marketing and sales are at odds. A growth-driven business knows when marketing and sales align to accomplish compatible goals, it’s more likely that improved sales will follow. The organization can build and maintain long-term business growth.
2. Have you made any investments in technology lately?
Growth-driven businesses are prepared for the future with a robust plan for enabling technological advancements . Growing companies may have to wait until a crisis happens to invest in new technology if their plans are focused only on growth.
3. How are you establishing your customer base?
If you’re gaining customers and new markets by following the customer journey, you’re thinking like a growth-driven company. You have a plan to keep those customers for the long term, which will vastly improve your overall success.
If you’re only working to gain customers and new markets quickly, you’re thinking like a growing company. You may not have a plan to retain all those new customers. You may lose out on growth in the future.
4. What is your customer experience like?
A growing business may want to acquire new customers as fast as possible and focus less on a customer’s experience in the short term.
A growth-driven company will want to understand the motivations of a new customer and use that to improve growth. They understand that creating a great customer experience is key to keeping them as customers long-term. They will align the customer experience with their brand and growth goals. It establishes a deeper connection with the customer based on mutual values.
Understanding who your customer is and what they need will help you uncover new opportunities for growth.
What Are The Types of Business Growth?
Small and medium-sized companies can achieve growth in four different ways:
Organic growth happens when a company creates a favorable environment for expansion. New and small companies will start adding physical space and staff to accommodate increasing product and service offerings.
When companies focus on improving core processes and available resources to enable expansion, they’re building internal growth. This often occurs after measurable organic growth. It’s a period of fine-tuning and preparation for strategic advances in future growth.
Companies focus on strategic improvements that help increase long-term growth. They will use the tangible results of organic growth and the purposeful results of internal growth to create more growth. Like investing in new and better products for new markets.
A company can create growth by partnering with a company, merging two businesses, or acquiring another company. It’s a collaborative way to enable growth with a high potential for reward.
Companies approach business growth by using a variety of tactics. They can:
- Generate more success within their current market by increasing brand awareness.
- Reach a new type of customer in their market with their current product and service offerings.
- Focus on one segment of an industry to gain market share.
- Introduce new products or new product features to create more value in their offerings.
- Integrate another aspect of their product or service production process into their business model.
- Improve core processes to increase productivity and improve value.
- Expand operations to new locations.
- Focus on retaining current customers with high-quality service.
- Diversify with new product creation for an entirely new market.
- Offer their products and services through new distribution channels.
- Make operational changes that create more opportunities for growth.
- Invest in other organizations as a stakeholder.
As a result of strong, sustainable business growth, small companies can:
1. Hire and retain more people.
When a company can put the right people in the right seats, production can be expanded, customer experience capabilities can improve, and new opportunities can be created.
2. Enter new markets.
When a business can expand beyond an initial customer base, it creates additional growth goals for leaders and teams, research and development, human resources, and more.
3. Gain competitive advantage.
When a company has an edge over the competition, it is much easier to win a larger share of the market.
4. Create more value.
When a business creates new products and services, it leads to better outcomes and improved profitability.
The four classic growth strategies in business are product development, market development, diversification, and market penetration.
1. Product Development
This strategy takes advantage of an existing market by creating new products and services designed to attract a specific customer base.
An example of product development is a body care product line expanding into hair care.
2. Market Development
This strategy introduces a company’s existing products and services to new markets.
An example of market development is a motorcycle manufacturer opening a showroom in a new location or another country.
This strategy balances high risk with high reward by introducing new products or services to a new market.
An example of diversification is an industrial products company making hand sanitizer for healthcare organizations.
4. Market Penetration
This strategy finds ways to use existing products and services to increase market share.
An example of market penetration is a tech company lowering the price of their best-selling product and marketing it industry-wide.
For companies to achieve growth, they need the people, the strategy, the plan, the processes and infrastructure, and the resources to make it possible.
1. Put the right people in the right seats.
The people that populate the company workforce must be ready, willing, and able to drive growth.
2. Prioritize growth with a strategy.
Find that way to focus on creating growth, which will also create value for the company.
3. Write a plan for growth.
Map out how to measure actionable outcomes and predict success.
4. Facilitate growth through processes and infrastructure.
Do what must be done efficiently with the tools and resources that enable expansion.
5. Invest in what's needed to drive great outcomes.
Companies at all levels need the right amount of capital and other resources to drive business growth.
6. Improve your core processes with the right company-wide platform.
Growth-driven companies are increasingly looking for one platform like Ninety where they can set business objectives, streamline communication, and track performance across the entire organization.
The tools in Ninety help small and midsized businesses grow and scale by improving accountability, tracking data to make informed decisions, and staying connected, engaged, and productive.
With time and consistency, Ninety can help you get on track with things that will lead to business growth. Ninety’s interconnected tools help you:
- Track data and measurables and use that information to make smarter decisions and set better goals.
- Communicate and share critical information easily.
- Reduce miscommunications , missed deadlines, and wasted time.
- Improve company-wide transparency so that everyone can perform better.
- Increase accountability , improve productivity, and support personal initiative.
- Guide teams through feedback conversations, meetings, and planning sessions.
- Create a strong company culture of transparency, accountability, and collaboration.
- Work smarter, not harder, with support along the way.
How do you know your company is growing? Look first to your company goals and establish which metrics will show whether you’re attaining them or not. Track those. They could include:
- Number of quality leads, customers, and repeat customers
- Sales, revenue, and profits
- Number of employees, new hires, and retained
- Value of the company in the market
Create Your Business Growth Plan on Ninety
Now that you’ve learned about what is business growth, it’s time to put your knowledge into practice:
Build your business growth plan on Ninety now.
Want more step-by-step guides and actionable tips on planning, tracking, and achieving business growth? Subscribe below to the blog!
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How to Write a Growth Plan
Last Updated: June 23, 2023 References
This article was co-authored by Gina D'Amore . Gina D'Amore is a Financial Accountant and the Founder of Love's Accounting. With 12 years of experience, Gina specializes in working with smaller companies in every area of accounting, including economics and human resources. She holds a Bachelor's Degree in Economics from Manhattanville College and a Bookkeeping Certificate from MiraCosta College. There are 7 references cited in this article, which can be found at the bottom of the page. This article has been viewed 140,921 times.
If you’re lucky, your business will grow without much effort. However, most business owners need a plan. A well-drafted growth plan will identify potential growth opportunities and the amount of money you will need to fund the expansion. Your plan should have multiple parts, including a marketing strategy and different financial documents. If you need help, you should visit a business development center.
Analyzing Growth Opportunities
- Add new products or services. For example, you might run a nail salon. You could expand your offerings by turning the business into a day spa, complete with massage.
- Sell more products. You might have a boutique that sells vintage clothing. You can try to increase new sales by changing your marketing.
- Open in a new location. If you have a brick-and-mortar business, you can expand by opening another store in a new area.
- Target a different or additional market. There might be a larger market that remains untapped. For example, if you offer massage services to women, you might want to add men as a target market. Alternately, you might be targeting middle-class consumers. Instead, you could gear your business toward high-income people.
- Go global. Get a website so that you can sell to many different countries. Plan on creating a website and selling into markets you’ll never visit in person.
- Review your business's budget—there's almost always room to save money.
- Ask your current staff for help analyzing staffing needs. Ask them what other skills they have. Someone might be able to fill a new position created when you expand.
- If you need to hire staff, visit websites like PayScale or Glassdoor and check how much those employees normally make.
- Go through your budget and check what you can afford. Check how much excess cash your business has, if any, and whether you have a line of credit or business credit card you can use.
- Study the layout and overall design of the plan. You want a growth plan that looks professional. Copy what impresses you.
Drafting Your Growth Plan
- Description of your business. For example, “Jackson Data Processing is a two-person partnership that provides data entry and coding to medical offices.”
- Products or Services you offer. For example, “We collate, enter, and analyze client data before submitting it to appropriate government agencies and private insurers. We provide a one-time service, as well as regular billing and coding.”
- Unique characteristics of the business, if any.
- Strengths. Identify what your business does well. Think broadly and include tangible as well as intangible strengths. You should identify strengths in all areas of the business, such as marketing, finance, service, etc. For example, tangible strengths might include a great location or established customer base.
- Weaknesses. Identify what your business doesn’t do well. These should be things within your control. For example, a bad economy is not a business weakness since you don’t control it. Think of weaknesses such as limited resources, inferior technology, inexperienced staff, and poor location.
- Opportunities. These are external to your business. Generally, opportunities are situations you can exploit to your own advantage. For example, your industry may be booming. In that case, you may try to sell more units or sell additional products in order to grow your business. Alternately, an aging population might present an opportunity for you to target this market. Opportunities can be long-term or short-term.
- Threats. A threat is something beyond your control that could undermine your business. For example, competition is always a threat. However, other threats include increasing government regulations, technological innovations, or negative press attention. A declining customer base could also be a threat. If so, you might pursue growth opportunities by moving to a new location or targeting different consumer markets.
- Expansion opportunities. Identify the growth opportunities you intend to pursue and why they are the right choices based on your SWOT analysis. For example, interest rates may be low, and you intend to borrow to open a new store in a growing area.
- Marketing plan . You should identify your target market and your means of reaching them, by way of paid advertising or other methods. Discuss the costs of your marketing plan, and what kinds of free marketing you can use, such as using social media or increasing word-of-mouth by encouraging customers to leave a review online.
- Demographics of the market area. For example, what is the typical age, gender, education, and income of your targeted market and what are the demographics of the area where you will be expanding.
- Make sure that your plan answers questions like "What growth are you trying to do?" "What is your reasoning behind this growth?" and "What statistics do you have that other people want this growth?"
- Your current financial situation. Include profit and loss statements, cash flow analysis , etc.
- The amount of capital you will need.
- Your costs of operations. Explain your fixed costs, such as employee salaries, rent, and insurance.
- A “break even” analysis. This is the point when you start making a profit. You will need to calculate this point using your fixed and variable costs.
- For example, you might include background data for your company or a copy of a market survey used to develop your growth plan.
- You can also include copies of legal documents, such as your Articles of Incorporation.
- Call 1-877-322-8228. You can request reports from all three agencies at once. Your copy should be mailed to you.
- Visit annualcreditreport.com. You will need to provide your name, address, date of birth, and Social Security number for identity verification.
- Complete the Annual Credit Report Request Form, available here: https://www.consumer.ftc.gov/articles/pdf-0093-annual-report-request-form.pdf . Mail it to the address on the form.
- Someone else’s account being listed on your report. You might have a similar name or Social Security Number.
- Accounts opened as a result of identity theft.
- Accounts reported inaccurately. For example, an account might be reported as late or delinquent when you haven’t missed a payment.
- An account that appears more than once.
- Information that should have fallen off the report but which still appears. For example, unpaid debts should fall off after seven years.
- A mistake made in the balance owed or in your credit limit.
- SBA loans. The Small Business Administration guarantees loans for some small businesses. You get the loan from a regular bank, but the SBA will pay the bank if you default. SBA loans have favorable terms, though they require a lot of paperwork. SBA offers many types of loans, depending on your needs. You can get a loan to purchase equipment or buildings, expand your business, or to provide for working capital.
- Conventional bank loans. These may be easier to get than SBA loans and generally have low interest rates. However, the repayment period is typically shorter than with an SBA loan.
- Alternative lenders. If you don’t have great credit, you might seek out online lenders, such as Fundation and Kabbage. You will probably have to pay much higher interest rates.
- Business plan or growth plan
- Personal credit report
- Resumes for all members of management
- Personal and business income tax returns
- Personal financial statements
- Personal and business bank statements
- Legal documents, such as copies of your contracts, business licenses, leases, and articles of incorporation
- Your plan needs to be well thought out, organized, and something that another person can comprehend. Thanks Helpful 0 Not Helpful 0
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Thanks for reading our article! If you'd like to learn more about investments, check out our in-depth interview with Gina D'Amore .
- ↑ https://www.business.com/articles/writing-a-business-growth-plan/
- ↑ http://www.forbes.com/sites/davelavinsky/2013/10/18/strategic-plan-template-what-to-include/2/#4a955c63b55e
- ↑ https://www.consumer.ftc.gov/articles/0155-free-credit-reports
- ↑ https://www.consumerfinance.gov/askcfpb/1261/what-are-errors-show-credit-reports-out-having-creditors-report-your-accounts-credit-bureaus.html
- ↑ http://www.businessnewsdaily.com/7695-small-business-loan-guide.html
- ↑ https://www.sba.gov/loans-grants/get-ready-apply/gather-info-youll-need
About This Article
A well-drafted growth plan will help you identify growth opportunities and budget for the expansion. To write your growth plan, start by identifying areas of potential growth, such as adding new products or services, expanding into new territories or markets, and increasing your marketing to sell more existing products. Once you’ve decided on a direction for your growth, take a look at your goal and figure out what your business is already doing well and where it needs to improve. Use this to write a 5-year growth plan, detailing the steps you’ll take to put the plan in motion. Then, write a financial plan, including your current financial situation, the amount of capital you need to raise, and how you’ll secure it. If you need to hire extra staff for your expansion, include this in the plan and how much it’ll cost. For more tips, including how to get a business loan to support your growth plan, read on! Did this summary help you? Yes No
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Growth Planning: What It Is & Why It’s Essential in 2023
Posted november 15, 2022 by noah parsons.
It was the fall of 2008 and the financial world was falling apart. The “great recession” was just beginning. As companies failed and entire industries teetered on the brink of collapse, some sales channels at our small company dried up.
My wife and I had recently taken over Palo Alto Software (the creators of LivePlan). We were still getting our feet under us as we worked frantically to find the right strategy that would get our company through the recession.
During this time, we developed and refined the business planning process that kept our company alive. It helped us survive without any layoffs, and we came out of the recession as a stronger, healthier company primed for growth.
We knew that we couldn’t keep this growth planning process to ourselves—so LivePlan was built to make it easy for anyone to implement.
Now, growth planning isn’t just for existing companies like ours. It’s even more useful for new startups and small businesses that are risking everything to get up and running.
So, do you want to spend less time planning and more time growing your business? Let’s walk through the growth planning process and teach you how to make it work for your specific needs. No business or financial expertise required.
What is growth planning?
Growth planning is an ongoing business planning process that helps keep you focused, grow faster and adjust quickly to change. It prepares you to build a better business, not just a single business plan document.
It all starts with a simple, one-page business plan —which you can download and create with this completely free template .
From there, you can use growth planning to clarify ideas, set solid strategic goals, track financial performance, and refine your strategy as you learn more about your customers and their needs.
Here’s a quick overview of the four-step growth planning process:
- Create a plan : Quickly size up the potential of your idea, validate that it can be a real business, and set goals to make it work.
- Build your forecast : Develop an expense budget and financial projections to better understand where your business is now and where it is headed.
- Review the results : Compare your forecast against your actual sales and expenses each month to stay accountable and uncover new ideas.
- Refine your strategy : Adjust your business plan and forecast based on your learnings.
How is growth planning different from traditional business planning?
Traditional business planning is a chore for small business owners. For decades, it meant writing a monstrous 40+ page document that required hours of research, numerous revisions, and monotonous number crunching.
And yet, some companies continue to hold onto this outdated concept.
“It has become deeply institutionalized,” reads one Inc.com article about the history of business planning . “In recent decades, accelerating change has made it even more difficult to accurately predict what will happen six months out, much less a year out.
Traditional plans take too long to write, the data is almost immediately obsolete, and they often aren’t useful in day-to-day operations. They simply don’t provide the flexibility needed to adapt to today’s fast-changing world. In response, experts have come up with some alternatives.
In the late 2000s, Swiss business theorist Alexander Osterwalder developed the Business Model Canvas. It’s a faster and more visual alternative to formal business planning, but it introduces its own set of problems .
That’s why we developed growth planning. It’s an even simpler way to produce the business plan documents and pitch presentations that you might need to successfully start your business, raise money, or get a loan . Any entrepreneur can do it — regardless of their background, education level or how established their business is.
But, the goal of growth planning isn’t to just produce documents that you use once and shelve. Instead, it helps you build a healthier company that will outlast all the business failure statistics .
We like growth planning because
- It’s faster than traditional business planning. You can complete an initial one-page plan that covers all of the necessary details about your business in just 30 minutes .
- You can revise your plan and strategy in minutes instead of hours. This means that your plan stays up-to-date and useful for identifying potential problems and opportunities.
- It’s concise. Because growth planning requires you to document your ideas with limited text, your ideas are distilled to their core essence.
So, how exactly do you start growth planning? Let’s look at the four key steps you’ll be using to create a business growth strategy that helps you achieve your goals.
Step 1: Create a one-page business plan
The one-page plan format is essentially a one-page summary of your business concept. Think of it as your virtual bar napkin where you’re jotting down ideas about your business. Unlike a napkin, it’s easy to change and revise things as you go (and it lacks those pesky ketchup stains).
For your one-page plan to work, you’ll need to cover:
- Strategy: what you’re going to do
- Tactics: how you’re going to do it
- Schedule: who is doing what and when
- Business model : how you will make money
Addressing these four key aspects of your business helps explain what you’re going to do and how you’re going to do it. It’s great because you can easily share this with business partners and even investors to give them a summary of your business.
Your one-page plan can also be used as the foundation for a more detailed business plan document . But, for many entrepreneurs, a one-page plan might be all the planning you need to do, and you’ll be able to skip the entire detailed business plan.
Download our free one-page plan template and get started right away. LivePlan also includes a one-page plan, plus full financial forecasting, so you can use that if you’re looking for an online tool that includes more features than a downloadable template. For more detailed instructions, read our step-by-step guide for creating your one-page business plan .
For startups, use your one-page plan to test and validate your idea
Reducing risk is one of the most important benefits of early growth planning. Instead of rushing out to start your business, take the time to make sure you have a good idea and that you’ll be able to create a viable business. Most businesses that fail skip this critical step.
When developing your idea using the one-page plan framework, you write down all of your key business assumptions. These are your best guesses about who your target market (customers) will be, the problems they have, and how your business will help them.
Now it’s time to find out if your assumptions are true:
- Do your potential customers have the problem you think they have?
- What do your potential customers think of your solution?
- What’s the best way to sell to your potential customers?
- What marketing tactics will work?
There’s no better way to answer these questions than to actually talk to potential customers about your product or service. Find out how much they’re willing to pay, what competing products or services they currently use, etc.
If you need help figuring out how to talk to customers, check out this guide.
As part of this research, you may discover the need to refine your solution, or even reconsider the problem that you are solving. Since you haven’t created a detailed business plan at this point, you can easily adjust your one-page plan. The key to testing your idea is to constantly go back and revise it as you learn.
Even without moving past step one, you’re already practicing growth planning by circling back on your idea, testing its potential, and making strategic adjustments. Not only will you be better prepared to run a more profitable business, but you’ll avoid starting something that just won’t work altogether.
What if you need a more detailed business plan?
You may have a “business plan event.” A potential investor asks to see a more detailed business plan. A loan officer requires a detailed plan alongside your loan application. Maybe you just want a detailed 10-page document to hand to your team that easily explains your strategy.
If that’s the case, use your one-page plan as a starting point and add the information needed to make it useful for your business needs. Don’t write paragraphs and paragraphs of text. Try to still keep things as short and concise as possible.
Thankfully, you’ve already done the hard work of developing your business strategy. You’re just expanding on it with additional details on your marketing, sales, products, etc. You can check out our full guide on creating a detailed business plan document to learn exactly what to include.
Step 2: Build your forecast
The next step in the growth planning process is to build a financial forecast. This will help you set revenue goals, define expense budgets, and understand how cash moves in and out of your business.
If you’re a startup, you don’t need to build out incredibly detailed spreadsheets. Just take broad strokes to get a rough idea of what it will take to make your business successful and if it even makes financial sense to start a business.
If you run an existing business, you may already have these financial forecasts. But, if you don’t, now is the time to set your sales goals and create a budget for your expenses.
For this step, you will create:
- A sales forecast
- An expense budget
- A cash flow forecast
Building a sales forecast
For your sales forecast, think about how many products, hours, or meals that you might be able to sell in a given month and what each customer will pay on average. Then think about what it costs you to make and sell your product (your “cost of goods sold”). For detailed advice, check out our guide on building a sales forecast .
Budget for expenses
With a rough sales forecast in place, you can now think about your expenses . This includes rent, insurance, marketing, payroll, and other costs of running your business. Create a list of these expenses and then compare the costs of running your business to your forecasted sales.
This will tell you if you can run a profitable business based on your best initial guesses. Sales need to be greater than expenses, if not from day one, at least eventually.
You’ll almost certainly need to refine your numbers after your first pass. But this is still a worthwhile exercise to figure out if the business actually makes sense and can make money. Check out this guide for more details on creating an expense budget and calculating profitability.
Forecast cash flow
Finally, and most importantly, you’ll want to look at your projected cash flow. Your cash flow forecast will help determine how much money you need to raise to get your business off the ground and fund your growth. This is especially useful for companies that sell “on credit,” where customers don’t pay right away, as well as companies that carry inventory.
Unlike a profit and loss forecast, a cash flow forecast is all about tracking the timing of when cash moves into and out of your business. That’s because cash and profits are different .
For example, your profit and loss will show when sales get made, while your cash flow will show when you actually get paid. For any business that doesn’t get paid right away, this is very important.
To build a cash flow forecast, you’ll show all of the cash you expect to receive and subtract all of the cash you plan to spend. If the number is positive, you have “positive cash flow” and your bank account will be growing. If you have “negative cash flow”, your bank account is shrinking.
The real benefit of a cash flow forecast is that it can help you predict the amount of cash you will have in the bank. Knowing when you might run short on cash will help you determine the best types of loans and investments, and when you need them, to build your business.
Now, you could put all of these forecasts together with Excel, but I recommend checking out LivePlan . It will help you quickly produce all of the financial forecasts you need without complicated spreadsheets and immediately embeds your forecasts within the growth planning process.
Step 3: Review your results
Growth planning is all about steering your business toward smarter and more strategic action. To do this, you’ll track your actual financial performance and compare it to your plan to determine if your business strategy is working.
Tracking your performance is a simple process. At a minimum, you’ll review your actual sales and compare them to your sales forecast. Review your spending and see if you’re staying on budget.
Beyond sales and expenses, you may want to track other metrics to ensure that you’re on the right track. This fully depends on the type of business you are running.
The most effective way to do this is with a monthly plan review meeting . Setting a time for review ensures that you’ll actually prioritize stepping away from the day-to-day to zoom out and look at your business as a whole. By putting the meeting on your calendar, and ideally, including others, it becomes a can’t miss commitment.
Tracking your performance is arguably the most important step when growth planning. Without tracking the key metrics for your business, you won’t know if things are going well or going poorly. Spotting trends early and making adjustments to your strategy and tactics is critical to business success.
Don’t beat yourself up if you aren’t meeting or beating your plan. The goal of tracking your performance is not to “stay on plan” but to make adjustments if things aren’t going “to” plan.
Step 4: Refine your strategy
So far, you’ve created a one-page plan for your business, built a forecast, and are now tracking and reviewing your results against your plan. Now it’s time to take action and refine your strategy and your forecast—but only if you need to.
Based on the results of your review that you completed in step 3, you may need to refine your plan. Don’t feel like this is a requirement every month, though. You should only refine your plan if your strategy either isn’t working OR things are going much better than you had originally planned. If you’re meeting your expectations, staying the course might be the best bet.
When you review your actual results against your plan, look for problems and opportunities. If sales aren’t meeting expectations, think about your marketing and sales strategies and if you should refine those. Maybe you should adjust your spending and refine your expense budget moving forward.
On the other hand, maybe part of your business is doing better than expected. You might want to consider focusing more on that part of the business or using excess revenue in one area to fund development or marketing in another area.
While refining your strategy, take the time to explore different financial scenarios to see how each decision could impact your business. For example, you can experiment with alternative expansion or hiring plans to better understand the impact on your cash and profitability over the next several months.
Refining your plan and your strategy is the final step in growth planning before you begin the cycle again. Successful business owners use growth planning to understand the health of their business and guide it toward ongoing growth and stability.
Harness the power of business growth planning
I hope you found this guide to growth planning useful. The growth planning process has been instrumental in growing our business and I hope it will do the same for yours as well.
Not only do we practice growth planning as a company, but our LivePlan product is built to make it easy. We use LivePlan to manage our growth planning process and are constantly refining it to make it even better for your business as well as ours.
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- January 23, 2018
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A Strategic Plan for Business Implementation: 3 Steps to Getting Business Growth Done
Let me ask you a question:
What’s the ONE thing your business needs to take the next BIG step in its growth?
Is it more ideas? More knowledge? More information?
You need to have a good system in place to make sure your ideas are being prioritized intelligently and implemented efficiently.
If you’re like most marketers, entrepreneurs, and business owners I know, you already have a whole pile of notes, ideas, and to-do lists still waiting to be implemented.
If anything, you might have TOO MANY ideas. Too many projects.
And the problem is that you need to get better at implementing those projects. Actually getting them DONE.
Am I right?
If your to-do list has 50 growth strategies on it, you certainly don’t need any more growth strategies. No, what you need instead is a method to…
- Decide which project to tackle first, and…
- Actually DO IT in an effective and efficient way
And that’s what this post is all about.
The framework you’re about to learn is the exact same process we use internally at DigitalMarketer to implement our business growth strategies.
It came out of the frustrations we had in our own recent growth…
As a company, DigitalMarketer went from being a small team of two to three people to being a team of over 50 people in a relatively short time.
But here’s the crazy part…
Even though our team ballooned in size by 25x, we didn’t actually get that much more work done!
See, you can’t just throw more money and people at a problem like this and hope that will fix the issue. Because it won’t.
Instead, you need to have a good system in place to make sure your ideas are being prioritized intelligently and implemented efficiently.
So, without further ado, here are the three steps to doing just that—a business growth plan for avoiding “shiny object syndrome” and actually implement a growth plan in your business …
Business Growth Plan Step 1: Align Your Team to a Single Goal
The first step is to align your team to a single goal and AVOID multiple simultaneous projects.
Instead of trying to achieve many different things at once, it’s much better to focus on one goal at a time. And don’t move on to the next goal until you’ve achieved the first one.
Goals should be sequential, never simultaneous.
Sequential goals ensure maximum efficiency because they allow you to put 100% of your focus on that one thing.
Simultaneous goals, on the other hand, are a recipe for chaos and inefficiency. And the more projects you have going at once, the less efficient you will be. Guaranteed.
This applies to your entire team, whether you’re a team of one or part of a much larger department.
One of the big mistakes that many companies make is giving a different goal or project to every employee.
For example: Bob’s project might be trying to grow the email list, while Lois is charged with increasing conversions, and Steve is in charge of trying to cut down on customer refunds.
The problem with a situation like this is that there are dependencies between these projects, and those dependencies can cause a lot of in-fighting between employees.
As a result, nobody is able to do a really great job of achieving their goal and you end up with another quarter of mediocre improvements and stagnant growth across the board.
But what if you could get your whole team—Bob, Lois, and Steve—all focused on the same goal at the same time? This way, there wouldn’t be any competing agendas. Chances are they would do a much better job than any one person could do on their own.
So, why don’t more companies work this way? The answer might surprise you.
The Secret Danger of Good Ideas
For many companies, the thing that’s stopping them from adopting a more efficient, sequential goal structure is too many good ideas.
It might sound strange, but it’s true…
Good ideas have killed far more companies than bad ideas.
It’s rare for a bad idea to bring down a company. Instead, failure is more often caused by trying to implement too many good ideas at once .
This makes sense if you think about it: we’re on the lookout for bad ideas. Anytime we try something that doesn’t work, what do we do? We stop doing it. We pivot. We try something else.
Bad ideas are usually caught and thrown out pretty quickly.
But good ideas?
Good ideas are dangerous.
Anytime we try a tactic that works well…
Anytime we come up with a new campaign that makes a lot of sense…
Anytime we see a competitor doing something that would work for us…
Anytime we come up with a marketing idea that “could be a game-changer”…
We pursue those good ideas.
Eventually, we start chasing too many things—and before you know it we’re knee-deep in “shiny object syndrome.”
This puts you in a tricky situation. Because you don’t want to ignore all those good ideas. But at the same time, you can’t afford to pursue them all at the same time.
So, what should you do?
How to Organize & Prioritize Your Good Ideas
I recommend using this four-step grid to help organize and prioritize your good ideas.
So first, draw out a grid like this on a whiteboard somewhere your whole team can see it:
Each column represents one of the four primary “Growth Levers.” These are the four ways you can grow a company . And the 4 Growth Levers are:
- Acquisition: Getting new leads
- Activation: Converting your existing leads into customers
- Monetization: Increasing the average order value of your existing customers
- Retention: Reducing refunds and churn rate
Then you’ll want to take each good idea and put it into the column where it fits best, like so:
Writing down all your ideas in a central location like this does two important things.
First, it organizes your ideas in a way that makes sense from a growth perspective AND makes it easy to focus and prioritize each idea. This will become crucial in just a moment.
Second, it gets those ideas out of your head and down on paper.
Many of us are walking around with too many ideas floating around in our heads. And trying to keep track of those ideas leads to cognitive overload.
Mentally, it feels like you have too many browser tabs open on your internet browser.
But when you write down your ideas, it’s like closing one of those tabs. It frees up some mental space because you know you don’t have to keep track of that idea in your head any longer.
Choose One Column to Focus On
OK, you now have your ideas all written down and organized according to the 4 Growth Levers.
The next thing you need to do is to choose a column to focus on for a period of time.
Because here’s the thing:
Impact doesn’t happen when you improve ten different parts of your business by 1% each. It happens when you make a giant improvement in ONE area.
So, for example, let’s say that for the next 12 weeks you decide to focus on Acquisition.
For now, you can ignore all your ideas that fall under Activation, Monetization, and Retention, and focus 100% on your Acquisition ideas:
The next thing you need to do is to prioritize those Activation ideas. And to do this, I highly recommend using the ICE Framework. ICE stands for…
So, what you want to do is this: for each idea, measure the Impact, Confidence, and Ease of each idea on a scale from 1-10.
- Impact : How big of an impact will this idea have on your business? A 1 means that this idea will have a minimal impact, while a 10 means that this idea is a real “needle-mover” with the potential to dramatically grow your business.
- Confidence : How confident can you be that this idea will work? If you’ve tried it before and it worked well, this might be a 9 or 10. If it’s a gamble, it might be a 1 or 2.
- Ease : How easy or difficult would it be to implement this idea? The easier the implementation, the higher the score.
You should make this a discussion with your whole team. Give everyone a vote and average the results for each idea.
Here’s an example of how we scored a few different ideas here at DigitalMarketer using the ICE Framework. The ideas were “testing new homepage opt-in copy” and “launching a podcast.”
Test New Homepage Opt-In Copy
We knew that our homepage was a significant source of opt-ins. So, we knew that if we could move the needle and increase that conversion rate, it would have a high impact on our lead flow. (Impact of 10.)
At the same time, we had never tested the copy that was on the homepage. So, we were reasonably confident that we could beat that copy that was currently there. (Confidence of 9.)
Finally, because this involved changing just a few lines of text, it was super quick & easy to implement. (Ease of 10.)
ICE score: 10 + 10 + 9 = 29 / 3 = 9.7
As the ICE score suggests, this idea was really a no-brainer for us. As a result, it shot up to #1 on our list of priorities.
And we would go on to update the homepage to…
Launch a Podcast
We knew that if we could launch a podcast and have it do really well, that could be a huge needle-mover for our business. It could help grow our brand and generate awareness by reaching a massive number of people who listen to podcasts. (Impact of 10.)
However, we had never launched a podcast before—so we had no experience in that arena. As a result, we were not highly confident that we would be able to produce a great podcast right out of the gate. (Confidence of 2.)
And because we had never done a podcast before, implementing this was not going to be easy. It was going to involve lots of research, investing in new equipment, setting up a studio, and lots of other setup. Definitely not an easy process. (Ease of 1.)
ICE score: 10 + 2 + 1 = 13 / 3 = 4.3
This was a classic “moonshot” idea for us. Pulling it off would be tough, but the potential payoff was huge.
Keep in mind that just because it had a low ICE score, that doesn’t mean we didn’t do it. It just meant that we didn’t do it first . Instead, it got pushed down on the priority list of Acquisition ideas.
As you may know, we DID end up launching a podcast—and the Perpetual Traffic Podcast was a smash-hit beyond anything we expected. It turned out to be well worth the risk.
( RELATED: How to Launch a Podcast, Drive it to the Top of the Charts, AND Keep it There in Just 4 Steps )
The great thing about the ICE Framework is that it makes the process of project selection really transparent to the whole team, and nobody ever feels like their ideas are being ignored or disregarded.
Every idea gets scored by the team according to the ICE Framework, and everyone on the team gets a say in which projects get tackled first.
Business Growth Plan Step 2: Work in Focused Sprints (Not Exhausting Marathons)
People, teams, and companies perform best with short bursts of intense work followed by a rest.
We are NOT designed for long marathons.
(It’s interesting to note that according to legend, the first Greek runner who ever ran a marathon ended up falling down dead at the end of it.)
We tend to work much better when we can go all-out for a couple hours, then rest and recharge our batteries so that we’re fresh when we go at it again.
I’m not saying that you shouldn’t work hard, and I’m not saying that you shouldn’t work hard for long periods of time.
What I’m saying is that your work should follow a cycle that allows you to put forth 100% effort and then recover from that effort so you can do it again.
Work really hard, rest.
…you get it. 🙂
Fortunately, this sprint-based style of project implementation works perfectly with sequential goals because it allows you to pursue one single goal for that short period of hard work …
Then you take a break before pursuing the next goal.
And when you add all those sprints together, you get what we call a “season.”
Business Growth Plan Step 3: Work in 12-Week “Seasons”
We experience life in seasons. We’re never in one consistent mode all the time.
This applies to many different timeframes. Obviously, it applies to the seasons of a year, as the weather changes from cold, snowy winter to hot, thriving summer and back again.
But it also applies on the level of a week, where we have five days of focused work followed by two days of rest and recovery.
Similarly, each day can be thought of as having its own “seasons” too; often the morning involves some ramp-up time, after which we increase to our most productive period in the late morning. From there it’s common to have a lull in the afternoon, after which we ramp up again to finish our work in time to head home at night.
So, that’s why I think it makes sense to approach growth projects using that same idea of seasons.
And when it comes to putting growth projects into action, these are the five “seasons” of implementation:
- Learn : This is where you learn the principles that will help guide the implementation of your upcoming project. This isn’t “just in case” learning, where you’re researching something you might, maybe implement someday. It’s “just in time” learning where you’re figuring out how to implement one big idea that you’re about to work on NOW.
- Implement : This is where the rubber meets the road. Stop attending webinars, watching videos, and reading blog posts. Now’s your chance to take ACTION. Whatever your project is, this is the time to put in the legwork to get it done.
- Celebrate : Once you’ve finished implementing your project, take a moment to sit back and celebrate all your hard work! I don’t recommend celebrating your results at this point—because after all, not every project is going to be a win. Instead, simply celebrate the fact that you got something done. That you learned something. That you took meaningful action to grow your business.
- Optimize : Often we will implement something, but that implementation will be shaky at best. We’ll build a bridge, but it will be a rickety bridge with lots of holes and problems. That’s why we need to take time to optimize—to improve what we’ve implemented, to fix the bugs, to iron out the kinks. This is an important step because it helps us to get the best results from whatever it is we just implemented and make sure we’re putting forth a polished and professional effort.
- Rest/Repeat : Now that your project has been implemented and optimized, I recommend you take a little time off to rest before going at it again. This is important to recharge your batteries so that when the next season starts, you’re ready to give it all you’ve got and really kick butt on your next project.
Here at DigitalMarketer, we follow this season in 12-week cycles. We find that 12-week cycles work really well for a couple reasons.
For one thing, 12 weeks is long enough to allow you to really dig in and implement some significant solutions.
Secondly, 12 weeks gives you four quarters each year. This lines up perfectly with the 4 Growth Levers, which means you can focus on each Growth Lever once a year.
Our 12-week season looks like this:
We take just one week to learn, followed by four weeks of implementation. After that we give ourselves a week to celebrate, then we spend the next four weeks optimizing our work. Finally, we take a short two-week break before starting all over again.
3 Business Growth Mindsets
Now that we’ve covered the three steps of implementing a growth project, I want to briefly hit on three critical mindsets to getting growth done.
Business Growth Mindset #1: Patiently Impatient Thinking
“Patiently impatient thinking” means that you work with a sense of urgency…
Really push yourself to get your work done as quickly and efficiently as possible…
…while also understanding that results always lag behind your efforts.
A good analogy here is to think of this in terms of exercise.
You need a sense of urgency while putting in the work while being patient for the results.
If you want to lose weight and get in shape, how would you achieve that goal?
For one thing, you would probably start working out, right?
And if you wanted to get in really great shape, you would work out intensely. With a sense of urgency.
But at the same time, you have to recognize the fact that you can’t transform your body overnight.
It takes time for the results to come.
And the same thing is true of growth strategies. You need a sense of urgency while putting in the work…
…while being patient for the results—knowing that they will take some time, but they will come eventually.
Business Growth Mindset #2: High-Impact Thinking
The second important growth mindset is to foster high-impact thinking.
And to illustrate what I mean by that, I want to warp back to high school physics class for a minute. Let’s talk about Newton’s Second Law of Motion, which states:
Force = Mass x Acceleration
What this equation basically says is that to generate a lot of force you either need a lot of mass…or a lot of acceleration.
Growth ideas are the same way.
An idea with high mass and low acceleration might be like a steamroller. A steamroller doesn’t move very fast…but it’s so big and massive that once it reaches its target, it generates a massive amount of force.
For us, launching the Perpetual Traffic Podcast was a steamroller idea. It took a lot of work to get it moving, but once it launched it made a big impact on our business.
An idea with low mass and high acceleration might be more like a bullet. Bullets aren’t very heavy. They weigh just a couple ounces. But they’re shot with so much velocity that they are able to generate a massive amount of force.
The great thing about bullets is that you can implement lots of quick and easy ideas in a short amount of time. You can fire them off one after another.
In the 12-week implementation season, we spend the Learn and Implement phases focusing on steamroller strategies that will really move the needle.
Then during the Optimization phase, we focus on lots of bullets that we can implement to improve that steamroller idea as quickly as we can.
Business Growth Mindset #3: Leadership Thinking
I hear from a lot of business owners who claim to be the “visionary” for their company. They think their job is to come up with ideas, and that it’s the rest of their team’s job to implement them.
Leaders don’t merely plan…leaders lead. They DO! Because good leaders understand that…
“A good plan violently executed now is better than a perfect plan executed next week.”—U.S. General George S. Patton
You don’t need a perfect plan. You need a good plan that gets DONE. And as a leader, it’s your job to make sure that happens.
Here at DigitalMarketer, our leaders do the most work. They lead by example.
Don’t be one of those leaders who sits in your ivory tower and just dictates orders down the mountain. Instead, roll your sleeves up and get your hands dirty doing the work yourself.
That’s why this growth implementation plan is so important.
And that’s how you lead a company.
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by Shehan Wijetilaka | CEO, Grow Strategy Pty Ltd
Do you want to grow your business faster than your competition?
A Growth Plan enables you to plan and track the growth in your business revenue. It allows you to be more efficient in generating new revenues by focusing on the value that customers can see. It allows you to differentiate yourself from your competition.
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Growth Plans compared to Business Plans and Strategic Plans
Don’t let innovation disrupt you. A Growth Plan combats disruption – and takes advantage of it.
So, what is the recipe for a Growth Plan?
Remove all sections of a business plan that don’t directly impact customers, shrink your Strategic Plan to 12 months, add rapid execution and you get a Growth Plan”
Growth Plans are nimble and typically targeted for 1-2 years or less. It must be agile and able to adapt as market conditions change. The tactics in a Growth Plan uses short sprints in 90-day cycles. This ensures execution is rapid and any lessons learnt is fed-back to fine-tune the Growth Plan for the next sprint, in near real time.
Business Plans are very useful to gain external funding from banks or investors. In contrast, a Growth Plan provides a deeper dive by exploding the “go-to-market” section that is typically seen in a Business Plan into a more granular plan on how to engage and create value for customers to move the revenue dial.
As the pace of change accelerates in society and customer buying patterns change , a Growth Plan provides a more realistic method of planning and execution than traditional Strategic Planning which typically looks at a longer 3-5 year time frame.
The essentials of a Growth Plan
A Growth Plan should only contain elements that customers can see direct relevance and value from engaging with your business. A Growth Plan has 9 steps ; it starts with business goals that point the business in the correct direction. A Growth Plan also spells out the strategies and tactics for reaching these goals.
In the absence of a Growth Plan, many businesses suffer from multiple knock-on effects that impact revenue growth .
Growth Plans are inherently strategic – it focusses only on Revenue generation. (Reference: the most fundamental equation in commerce: Profit= Revenue -Cost). It lays out the plan that relates directly to the organic growth of a business.
It enables you to connect your business goals and chosen strategies with coherent actions at the coal-face that have a direct impact on clients – to both protect existing revenue and generate new revenue.
Developing a Growth Plan should be a rewarding experience, not a daunting task that keeps getting postponed. It should enable you to clarify and prove to yourself first how you plan to generate revenue.
So how do we start the growth planning process?
The Growth Plan is a combination of strategy and specific steps to implement that strategy to help achieve your business goals. The plan makes the connections between the different functions that create value for your clients by examining:
Where are you now? Where do you want to go? How do you get there? These questions translate into a 3 pronged-examination of:
- Current State : You start the plan with a defined set of resources.
- Future State : You want to get to a point in the future (usually 1 to 2 years) at which point in time your business will have a different set of resources and capabilities.
- Bridging the Gap : Your plan shows how you will get to the desired future state.
The critical section from the output report is the action plan that you will use to:
- gain buy-in from other stakeholders such as staff and external advisers, and
- track progress and fine-tune the growth plan from your findings in execution
A well crafted Growth Plan enables you to take advantage of disruptive changes in the customer buying patterns, set meaningful priorities, and understand the need to pursue results in a systematic and methodical manner to ensure success.
Ready to act? Make a quick start with your online growth plan now.
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- Step 5 – Business Objectives (1)
- Step 6 – Value Proposition (1)
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