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All small businesses start out aiming to grow, but what does business growth mean and how can you achieve it?
Developing a business can be achieved in a range of ways from expanding your team or increasing sales figures, to launching new products or moving to new premises. Growth businesses are in a strong position to attract the best talent, appeal to investors, and innovate to take advantage of new opportunities.
Organic growth is when your business expands without making radical changes. For example, the longer you’re in the same market, your reputation could start to grow and lead to more sales. Recruiting new staff or receiving investment can also lead to organic growth.
If you’re actively looking to grow your business, you’ll need to develop a business development strategy that includes deliberate actions that change the way your business operates. Here are some examples of the most common strategies:
- Diversification - selling new products or services to a different market can provide extra revenue streams
- Product Development - launching a new product or improving an existing product can help a business to sell more to their existing audience
- Increasing Market Share - also known as market penetration, this is when a business increases promotion of its existing product or service to the same market
- Partnerships - teaming up with another company could help a business to increase resources and expand its target audience
- New Channels/Tactics - also known as market development, this is when businesses use new marketing methods and launch in new markets to get their existing products in front of a fresh audience
A business growth plan is similar to a standard business plan. The main difference is that it covers a shorter period of time, usually one to two years, rather than three to five years. So, how do you start business development planning?
Firstly, you’ll need to assess what stage your business is currently in and monitor performance. A good way to do this is by completing a SWOT analysis, which is a deep dive into your strengths, weaknesses, opportunities, and threats. Next, you’ll need to create a plan for how you want your business to grow and identify the goals that’ll help you reach the next stage.
It’s important to break your growth plan down into sections, with clear objectives you want to achieve. Areas covered in most growth plans include; growth strategies, marketing, operations, people. It’s also worthwhile to include an overview of your financial information, such as accounts, profit/loss forecasts, and a cashflow forecast.
When reading about business development, you’ll often come across the stages of growth. These stages outline the life cycle of a business so it’s important to know which stage your business is in. We’ve put together an overview of the main stages below:
- Launch – the start of the business. Sales will be slow and you may still be developing your product or service. You’ll need a big marketing push, with a focus on getting your name in front of your target audience
- Growth – your initial efforts will start to pay off with a surge in sales. This can lead to better cash flow and profitability
- Expansion – this is when many businesses go to the next level, by either moving to bigger premises, hiring more staff, or launching in new areas
- Maturity – during this stage, business will become steadier and more predictable. New competitors are more likely to enter the market, and it may become harder to grow. This is when businesses need to innovate or diversify to remain successful
- Decline – those businesses that don’t successfully navigate the challenges of the maturity stage could struggle, lose market share, and eventually become unviable
Growth mindset is an academic term that has become popular in business. It’s a belief that either your professional skills, or your business itself, can be improved through hard work and dedication. It’s the opposite of a ‘fixed’ mindset, where you believe your business is limited by the skills and talents your employees already have.
The aim of having a growth mindset is that by focusing on learning and development, a business can thrive through innovation and new ideas. However, declaring that your business or employees have a growth mindset won’t have an impact. You’ll need to be committed to changing the way your business operates from top to bottom.
You can access the full version of the above, as well as a whole host of other expert advice articles, on the X-Forces Enterprise Knowledge Exchange Hub.
