According to an analysis done by McKinsey, less than 1% of businesses have a chance of ever reaching annual revenue of 4 billion dollars.
It’s literally a one in a hundred chance.
Which is why, if you want to hack growth for your company – you will need a superb growth plan.
A business growth plan analyzes where you want your business to be in what time frame, and breaks down how to get there. Once you have your hand on a rock-solid plan of growth, you can use this to guide your business decisions and to steer your company to greatness.
Although it is essential, creating a plan for your business’s growth can seem like a daunting and vague task.
Thankfully, we have broken the process down into a few powerful steps. This is so that you can compile a plan for your company that will accelerate growth, fast.
Read on to find out what these steps are.
How to Strategize a Growth Plan into Being
Before you put ‘pen to paper’ there are a number of things to take into consideration. Once that is done you can get down to the physical work of crafting your plan.
Look at Other Companies’ Growth Strategies
One of the first things that you can do when beginning the task of compiling a plan for your business’s growth is to look at other companies’ growth strategies. This will give you an idea of how to lay things out, what to forecast for and how to break this down into actionable steps.
Target Untapped Areas of Growth
Once you have an idea of what a business growth plan looks like, it is time to start analyzing your business and begin compiling data.
The first thing to look at is any untapped areas of growth that could be included in your plan. For example, say you have yet to market your product or services online. This will likely be a huge untapped area that could be included in your plans for increased growth.
Assess Your Staff
Next up, assess your staff. If your business growth plan does what it is meant to and causes your business to rapidly grow – you will need to have enough staff to keep up with the demand.
The key data to obtain is how much growth can your existing team handle, at what predicted time will you need to hire more staff, and how many at a time.
According to Statista, the number one problem that small businesses face in the US is labor quality issues. Being able to predict when you will need to accelerate hires in the growth process will allow you to hire better people.
Hiring new staff at the last minute, to frantically meet burgeoning demands, can easily result in under qualified or unsatisfactory new staff members. Simply because you did not have the time to hunt for the right people.
Assess Your IT Network
The next thing that will need to grow alongside your company’s size is its IT system. As your company increases in size and complexity, so must the power and capacity of your IT system.
Once again, assess how much growth your current system can handle. Calculate at what point(s) the system will need to be expanded and by how much.
This will allow you to budget, plan, and avoid potential system overloads and flurried upgrades.
Work Backward From Long Term Goals Down to Short Term Goals
A great strategy for putting together a super effective business growth plan is to work backward.
The first thing to do is pinpoint the long term goals for your company. For example:
By the year 2029, Company X should be making Y amount of yearly revenue.
This is a 10-year goal. To get to this 10-year goal of annual revenue, you can break the growth strategies down into smaller goals over smaller time periods.
This way you will know exactly what revenue increases to reach for every year, 2 years, 3 years, etc. to reach your long-term revenue goal.
You can then flesh these goalposts out by including the estimated staff numbers that you will need at each stage and the metrics that you will need to be reaching for.
This is often termed the top-down approach to creating a growth model for your business.
Pinpoint Your North Star Metric
Speaking of metrics, you will also need to determine what your company’s most important metrics are. The most important metric will be your North Star metric, the one that always lets you know if you are traveling in the right direction.
For example, in Facebook’s early days their North Star metric was; the number of users adding 7 friends in the first 10 days of signing up.
North Star metrics will vary from business to business. But ultimately they should reflect:
- Your company’s overarching goal
- Revenue generating potential
Once you have worked out what your North Star metric is, you can use this in your growth model to set up metric milestones.
Analyze How to Increase These Metrics
The next key step after isolating your North Star metric is to analyze what actions are likely to increase this metric.
These actions can then be incorporated into your growth model and planned for.
If you are uncertain which actions will, in reality, boost your important metrics, you can also undertake short tests. Over a short time span, test out the actions you have isolated as being most likely to boost your North Star metric.
This way you can tell which ones are worth focusing your energy on and including into your business growth plan.
Utilize Business Plan Software to Draw up Your Business Growth Plan
Once you have gathered this data, it is time to draw up your plan. A great way to do this is to use business plan software. While most business plan software packages do not include an option for growth strategies, you can usually tweak the settings enough to create a business growth plan.
Share Your Startup Growth Plan with Key Employees
Once you have a concrete business growth plan, one of the best things you can do is to share this with key, selected employees. Being privy to the growth model of the business will make employees growth focused.
It will also act to inspire them to contribute to the success of the company, as invariably a startup growth plan will open up positions of increased responsibility and reward for them.
How Spending and Growth Plans Work Together
For any startup growth plan, there will be certain expenses which are necessary to its success. Determining what these expenses are will help you to ensure that expenditure is happening in the right areas.
According to a study by the US bank, 82% of business failures are due to cash flow issues. At the same time, it is vital that you do not cut back on essential business expenses as these will be the ones that drive growth.
Here are some examples of areas where most companies gain by focussing their expenditure:
- Marketing and branding
- Market research
- Innovation
- Talent
- Tech
- Technical support
- Customer support
- Making your business compliant
- Legal advice
- Accountancy services and tax professionals
Here are some areas NOT to spend money on:
- Expensive office furniture
- Unnecessary tech
- Expensive clothes
- Hiring too quickly
- Extravagant functions
- Overpriced shipping and printing services
- Non-measurable campaigns
If in doubt whether a line of expenditure will benefit your business, you can use your growth model as a guide. This will ensure that spending is focused on areas that will grow key metrics and assist you in meeting your business growth plan goals.
Funding
To achieve success with any growth strategies, you not only need to appraise areas of expenditure, but you will also need to look at funding. Here are some of the funding options you may want to consider.
Bootstrapping
There are a number of ways in which you can find lending solutions for your business. But if you don’t want to have outside funding, you can decide to bootstrap.
Bootstrapping simply means using revenue or personal inputs to fund the growth of your business. This strategy can be tough, but it is not impossible.
Crowdfunding
Crowdfunding is a new method of business funding whereby a number of investors (either entities or individuals) pool their money.
There are a few crowdfunding platforms to choose from and some advantages to this type of funding. The downsides are that this method takes time and there is decreased flexibility over the use of funds.
Angel Investors
Angel investors are usually high net-worth individuals who invest in businesses. The drawback to this type of funding is that it can be hard to get, and the angel investor usually wants some say in the business.
Business Credit Cards
Many businesses use business credit cards to fund their initial operations. While this is an easy route, the interest costs can be high.
Loans
Traditional loans are a reliable time-tested funding solution for small businesses. Loans do not place a constraint on your business operations, have lower interest than credit cards, and can be repaid in predictable installments.
If you want to know whether you qualify for a loan, you can find out in two easy steps if you pre-qualify for our tailored plans.
Final Word
Growing a business is not easy.
But, now that you know how to go about drafting a killer growth model, you are already one step further towards waxing those growth milestones.
If you are excited about your business’s growth plan and are ready to be inspired, check out some of our success stories!