Businesses are established to thrive in the market. If you’re a business owner, you understand that you always have to look forward and aim for the next level. Planning it into your growth strategy is the only way to keep your business in the game.
However, growing your business can be a complicated venture. There are several costs, processes, and even risks involved. It would be imprudent to just make decisions without thinking them through.
This is why you need to have a strategic growth planning session before scaling up. It pushes you to think about your opportunities to grow as well as your limitations. At the end of it, you’ll be able to create a growth strategy suited to your business needs.
So, how do you develop a growth strategy? Below is a guide to help you.
Determine your value proposition
A value proposition communicates who you are to your customers. It summarises what your business does and the unique benefit it offers to people. Having one also allows the whole company to align on the purpose of the business.
It’s important to have a value proposition because knowing what your business stands for will also allow you to see what it could be. Thus, it can serve as a springboard for your business growth. You could identify innovations to boost your value proposition or focus on aspects that matter most to your customers.
Identify areas for growth
While your value proposition can steer you in the general direction of how your business can move forward, you still need to do a proper study to determine specific areas to target.
Businesses can grow in various ways, so think of all the possible ways to grow first before settling on one. It’s good to identify all your options, so that you can dissect the pros and cons of each. You’ll never know the potential of a certain strategy if you don’t consider it.
SWOT Analysis is an assessment tool where you list your business strengths and weaknesses as well as external opportunities and threats. Those are the crucial factors you’ll need to look at to get a bigger perspective of your business landscape. You’ll be able to maximise for growth and address existing or potential issues along the way.
Ansoff’s Box, on the other hand, gives a model to review your products and market for strategic growth. It comes up with four marketing growth strategies that consider new and existing products and markets.
Here are the four combinations with pertinent questions you should ask yourself for each one:
- Market penetration (existing products and existing markets) – How can you get more of your target customers to buy the products you currently offer?
- Market development (existing products and new markets) – What other customer groups can you tap to sell the products you currently have? How can you market or advertise your products to appeal to their needs and wants?
- Product development (new products and existing markets) – Are there new products you can develop to serve the needs of your target market? What innovations would make them loyal to your brand?
- Diversification (new products and new markets) – Is there a potential to enter a new market with new products? Does the business have the capacity and resources to diversify from its current business operations?
Understand the business environment
As you grow your business, you’ll encounter obstacles from time to time. However, it’s good to prepare while you’re not facing the problem. A holistic situational analysis will help you forecast any possible challenges as well as factors that could hinder your growth plans.
A PESTEL Analysis is helpful for this case. You can list down all factors or events under each category (political, economic, social, technological, environmental, and legal) to determine their effects on your business. From there, you can make smarter decisions depending on their positive or negative impact.
Creating a Crisis Strategy Assessment is also a good way to understand your business environment and strengthen your growth strategy. When you’re aware of what constitutes a crisis for your business, you can plan ahead and mitigate most, if not all, catastrophic events should a crisis happen.
Getting to know your competition primes your business for growth. You get to understand the market dynamics, how your competitors are operating, and your competitive advantage against them. You can use this information to hone your growth strategy later on.
Porter’s Five Forces is a popular business framework that can guide you in doing a competitive analysis. You’ll assess the strength of the competition in the industry, the potential of new entrants into the industry, the power of suppliers, the power of customers, and the threat of substitute products.
If you know how these five forces come into play in your industry, then you’ll have a comprehensive understanding of how you can move in the market against your competition.
Build an action plan
After conducting a thorough internal and external study of your business and identifying your growth opportunities, it’s time to transform that knowledge into an actionable strategy.
First, determine the best path you can pursue growth. Recall the possible areas for your business growth and review them against your business environment. You have to choose a path that’s feasible and fruitful in the long run.
After you’ve decided on a direction for your growth, you need to lay out the steps to get there. This is what will make your growth strategy a strong plan of action. It’ll give your strategy a structure, making it easy for you and your team members to execute.
Consider using MOST Analysis in creating your action plans. It’s a tool where you define your mission first, so that all your objectives, strategies, and tactics will be aligned with it. This also provides your team with clearer targets and organised processes.
Seek support from experts
As you may have gathered, developing a growth strategy will need rigorous analysis of your business, competition, and external environment. If you feel overwhelmed with the task, there are experts who can work with you on figuring out the best growth strategy for your business.
Boardroom Advisors has Fractional Directors in different areas of business such as strategy, operations, and marketing. You can work with them in assessing your business plans and improving your strategies. With their years of experience, they can provide you with strategic advice that will propel your business growth. You can also access Boardroom Advisors’ free Business Strategy Toolkit to help you get started on developing your growth strategy.