Statistics tell us that most small businesses stay small, and while there are many reasons why this is the case, not having a growth strategy or having an inadequate growth strategy is one of the reasons.
Train your brain to think 'long-term'
Many business owners are too busy fighting everyday fires to focus on growth strategies. To some extent, this is understandable, because immediate issues always seem more urgent, hence why strategic thinking (i.e. growth strategy) will often take a back seat to everyday emergencies.
However, this is precisely why many small businesses remain small. Constantly dealing with everyday problems will naturally train your brain to think small (short term), so you have to find time for long-term thinking.
Having a growth strategy will force you to set goals, think about tactics (how you will get there), and equally as important, set milestones to measure progress. For example, if you keep missing your revenue targets, or your tactics are not working, then you will naturally reassess your growth strategy and adjust accordingly. Simply put, growth strategy creates accountability, and all business owners need to be accountable to someone, even if that someone is themselves.
If you don’t have any experience defining and implementing a growth strategy, our advice is to start with a unique selling proposition (USP). If you don’t have one, this is an excellent time to start, because every good growth strategy begins with a solid USP.
For more information on USP read "So, why should I buy from your Business?"
Back to the growth strategy; it doesn't need to be perfect or have all the answers. The overall goal should be clear, measurable, and remain relatively unchanged, but tactics can change over time.
Here is an (oversimplified) example of what a high-level growth strategy may look like:
- Scenario: A local brewery showed impressive growth in its first 4 years of operation, growing from $0 to $2,500,000 in revenue. However, over the last 12 months, growth has stagnated, and revenue increased by only 4%.
- Goal: Increase revenue by 35% by expanding beyond the greater Los Angeles area and into new markets.
- Timeframe: 2 years
- Type of Growth Strategy: Market Development (selling current products in a new market).
- Strategy: Focus on San Diego and Santa Barbara (year 1), and then expand to San Jose, San Francisco, and Sacramento (year 2).
- Partner with local bars & restaurants
- Organize tasting events, and social media contests to increase brand awareness
- Schedule press releases to increase interest and generate buzz
- Organize interviews with local newspapers, bloggers and other influencers
- Implement targeted social media ads (Facebook and Instagram). Also, implement targeted search ads (Google and Bing)
- Configure Website personalization (detect visitors from ‘expansion’ cities and offer promotions and incentives)
- Shift content marketing efforts toward ‘expansion’ cities.
- Revenue Milestones:
- Year 1 (Q1-Q2) = + 4%
- Year 1 (Q3-Q4) = + 6%
- Year 2 (Q1-Q2) = +10%
- Year 2 (Q3-Q4) = +15%
Note This example focuses on market development, but growth strategy can also focus on product development, market penetration, diversification, acquisition, etc.
In summary, a growth strategy is fundamental in planning and executing business growth. Without it, you may get lucky and experience short growth bursts, but in our experience, continuous and sustainable growth only comes to those who plan for it.