Facilitate and speed up expansion with a clear roadmap.
- Business growth plans provide a timeline for the next one to two years on how revenue can increase.
- There are four major types of business growth strategies: market strategy, development strategy, diversification and product strategy.
- Studying and researching other business growth plans is essential to develop an effective one for your own investors.
What is a business growth plan?
Business growth plans are short-term outlines 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 were met and what goals were missed during that period. At this point, management can revise the business growth plan to reflect current market standing.
A business growth plan is beneficial to a company as a whole, but 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. Growth plans are customizable to each business and don't need to follow a set template. However, all business growth plans must be heavily focused on revenue. The plan should answer a simple question: How does your company plan to make money each quarter?
What are the four major growth strategies?
There are countless of 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 to enter a new market or create new products/services to boost market shares. Instead, you want to leverage your current offerings. Can pricing be adjusted? Should a new marketing campaign be launched?
- Development: This strategy applies to looking into ways to break your products and services into a new market. If you can't find the growth desired in the current market, a goal could be to expand to a new market.
- Product strategy: This stage is also referred to as product development. For this strategy, the focus is on what new products and services to target your current market. How can you grow your business without entering new markets? What are your customers asking for?
- Diversification: Diversification refers to expanding both your products and target markets. This strategy is usually best for smaller companies who have the means to be versatile with what products/services they offer and what new markets they attempt to penetrate.
Writing a growth plan is very similar to writing a business plan.
However, a 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. A growth plan includes:
- A description of expansion opportunities
- Financial goals broken down quarterly and yearly
- 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
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, among others. 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. In addition, you'll know when to start hiring additional people and what skill sets to look for in those new hires.
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.
Getting help from other business owners who have had success in growing a business 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 to business plans, but you can modify them to create a plan that focuses on growth.
- Review and revise your growth plan often.
- Share your growth plan with key employees as a motivator. When employees see opportunity for increased responsibility and corresponding compensation, they're more likely to stay.
- Your growth plan should also include an assessment of your operating systems and computer networks to determine if they can accommodate growth.