Just about every new company needs a business plan, and they are especially essential for anyone looking to get approved for a business loan. The plan defines your business and lays out a general guide for how it will be run.
But one of the most important elements of any business plan is what is called a growth strategy. Basically, where do you want your business to be at designated times in the future (usually after one year and five years) and what is your strategy for achieving those goals?
This is a crucial consideration to make when sitting down to draft a business plan.
You Have To Be Behind Your Business Plan Idea – One Hundred Percent
Without the first and most important ingredient, which is passion, a business is already more likely to fail, because it takes a lot of effort to get a business off the ground.
Writing a business plan is really the first step in getting your company off the ground. Make sure you like the company first.Jonathan Furman, Founder and CEO of Furman Transformation
Your business plan cannot contain a viable growth strategy without a clear understanding of what you want the company to eventually be, and that has to be true to your vision.
The Growth Strategy That Focuses Around Gaining New Clients
This is the preferred growth plan for businesses that primarily offer services. This type of growth is usually highly dependent on positive word-of-mouth marketing, so a company that embraces this strategy will always need to really focus on both providing a valuable service and a good customer service experience.
Value is also very important in service-based industries, such as the additional knowledge and experience of your staff in addition to the services they offer.
The Growth Strategy That Focuses Around Franchising
Franchising is most often found in restaurants, but is used in many other industries as well. Famous examples include McDonald’s and 7-Eleven.
Planning on growing via a franchise is usually advisable if you’re shooting to have a consistent product and highly recognizable brand to your customers. To grow a franchise-based business, it’s important to take steps towards making franchising an attractive option for potential franchisees.
Traits can include a reputation for quality, a positive public image and a financially successful business model.
The Growth Strategy That Focuses Around Multiple Locations
Planning to branch out into multiple locations is a good growth strategy, especially for a retail business. This can make shopping more convenient for people who live across a city or geographical area.
Do keep in mind that branching out too far may not always be the best move, because products that are successful in one geographic area may not be in another.
For example, if your business sells farm products, locations in big cities are less likely to draw customers.
The Growth Strategy That Focuses Around New Products
Introducing new products can spur growth, but the development and rollout of each product needs proper care and attention. Generally, any new products should also be a logical extension or complement to what you already produce.
A core part of this strategy might be to start with a particular type of product with the intention to expand into other areas at a later time when your business is more established.
The Growth Strategy That Focuses Online
Your new business might be primarily or even entirely run online.
Your new business might be primarily or even entirely run online. Online growth strategies usually revolve around social media outreach, viral marketing, selling products at a wider variety of online retailers, an engaging website and more.
Online focus typically allows for a much broader customer base as well.
The Growth Strategy That Focuses Around Acquisition
The final major growth strategy revolves about acquisition. In this scenario, a company plans to buy other companies as part of its growth strategy.
As long as this is done strategically, it can be a very effective, and fast, method of growth. This strategy can also be rather risky because of the investment that must be put into it.
Acquisition is common among companies that wish to grow by entering new markets or expanding to a new product line.
Business plans are an important road map to create when you consider starting up a new company. When completing sections concerned with growth strategy, business owners need to take into careful consideration what type of company they are trying to form and then decide what growth strategy is best suited to it.
Remember that different growth strategies can be used in tandem, so long as they don’t interfere with each other. Keep track of your progress towards any goals stated in your business plan at regular intervals, and make changes as necessary or even switch to a different type of growth strategy if need be.
Continuous assessment of your growth strategy will be paramount in determining whether a business ultimately succeeds or fails.