As an entrepreneur/corporate manager, you know you have to keep improving your business growth strategy.
Just like your facilities and IT infrastructure, your business growth plan needs regular maintenance and updates.
By revisiting your company’s innovation targets and product/service life-cycles, you can keep your offerings fresh – and your revenues growing.
Some leaders know how to manage startups, but not how to plan business growth.
Others have learned small business expansion strategies for scaling up successful small businesses.
You need the right business growth strategy (and everyday tactics) for your current customer volume, market share, staff size, etc.
#1 – Understand the Stages of Business Growth
Every growth plan for business needs to suit the company it serves.
- How big is your company?
- What stages have you passed through?
- What new challenges will arise as you continue to scale up?
- Where should a solo proprietor focus their energies?
- How might a 10-person company redirect their efforts after initial success in the marketplace?
- What complications arise when businesses reach hundreds, thousands, and even millions of employees?
If you run your own business and don’t employ a staff, you avoid many of the headaches business owners face at higher levels. All you need to do is find a product/service people want, and provide it at an appropriate price point.
However, you don’t benefit from the support of a team.
You end up having to do almost everything yourself. Instead of playing to your strengths, you wear all the “hats”: CEO, janitor, customer service, administrative support, IT person, sales/marketing, etc.
Business Growth Strategy:
Create time and space so you can focus on what you do best.
Track your time and identify low-skill jobs that fill large chunks of time. Alternatively, choose projects with which you have little experience – or simply dislike. Hire freelancers to complete these tasks until you can afford to hire full-time help.
At this stage, you’ve created solid sales volume.
You’ve begun to attract both consumers and competitors. Take advantage of your toe-hold in the marketplace and maintain your level of growth.
A good business growth strategy means shoring up weaknesses and making your company seaworthy for whatever weather lies ahead.
Sure, if you have a rising star product/service, it can be tempting to go all-in on manufacturing, distribution, and sales.
However, as your employee numbers go, you’ll need more-comprehensive HR, Legal, and IT infrastructures. As you attract more consumers, you’ll need to invest more in PR, customer loyalty programs, etc.
Business Growth Strategy:
Expand all areas of your company – not just the glamorous ones. Study your key performance indicators and keep a close eye on your company’s health.
Address risks before they arise and avoid a corporate shipwreck.
Of course, ramp up production of your star offerings, but take a measured approach. Your business’ overall wellbeing and stability matter most, in the long run.
A strong business growth strategy spreads growth across an entire organization.
As you take control of your market niche, you’ll probably find your success depends on one or two signature products.
Of course, you can continue selling to this market segment and offering new variations of/updates on your top products/services.
However, it’s time to start innovating – before you saturate your market and experience a massive reduction in growth.
As your company (and your products/services) matures, keep an eagle-eye out for an S-curve in your growth figures.
You started your business at the bottom of an S, slowly climbing an exponential curve. When you started selling, your company’s growth was slow.
As you reached your target consumers and gained momentum, your growth accelerated. You’re nearing the top of the S-curve.
Don’t fool yourself – this event naturally occurs as businesses fill up their niches. If it hasn’t happened yet, it will very soon.
No company can grow forever, focusing on one product/service. Now—before it’s too late—you need to diversify.
When you’re riding high and making profits from successful ventures, it’s time to pay down debts and invest heavily in research and development.
Before you reach the point of diminishing returns (the top of an S-curve) and have to scale back, you’ll have created another primary product/service to build on the success of your previous star offering.
Business Growth Strategy:
Start planning to stack S-curves, so a new product/service (or many of them) stand ready to increase your revenues when a top-earning offering has run its course.
Keep your momentum going and smooth out the ebb and flow of product cycles.
Companies beyond the $10 million revenue threshold need to embrace a completely new set of challenges.
For example, when should you sell?
Business Growth Strategy:
Don’t get stuck (as many companies do) at the $10-30 million level.
Sure, you can sell your company before your rising start product/service has completely saturated its market.
However, consider using the goodwill, market exposure, and industry cache you’ve created to launch new, slightly tangential solutions.
Keep delighting your current customer base with variations on your core offerings. Simultaneously, research new market sectors that could benefit from your company’ unique specialties, skills, and knowledge-base.
In short, to keep growing, you must serve more and more consumers.
As you fill your niche (and attract competitors to it), simply leverage your wealth of experience. Thrill new audiences in new niches – the process never has to end!
#2 – Develop an Industry-Specific Business Growth Strategy
If you’re wondering how to make a business growth plan that suits your industry, you need to study the competition.
Understand your competition’s profitability with Michael Porter’s Five Forces. As your company grows, your success naturally brings more attention to your niche. In this classic Harvard Business Review article, Porter says Industry Rivalry occurs when growth slows, and competitors have roughly equal size and power.
According to Porter, four factors feed Industry Rivalry (the fifth force):
How many suppliers exist in your niche? The fewer there are, the more power they have to determine price.
Do your suppliers also serve your competitors? High customer volume means power, not just for you, but also for your suppliers.
Suppliers hold substantial leverage when no one else can replicate their product/service.
The consumers in your niche control your company’s destiny. If demand decreases, so will your revenues. As you fill up your niche, pay attention to the change in its size.
Is your offering as valuable as it once was?
For example, if you provide “big button” senior-friendly cell phones for people uncomfortable with smartphone technology, you’re serving a valuable, targeted—but ultimately decreasing—market segment.
If competitors can easily tempt your customers away, you’ll see a massive drain on profits. Encourage customer loyalty with financial rewards and social benefits to increase retention. It’s far more expensive to find new customers than maintain your existing base.
If motivated, DIY customers can create the same results on their own, you’ll lose market share.
Mesh an “only we can do this” component into your great idea, so it doesn’t become everybody’s great idea. Protect your intellectual property (and hard work) by integrating true uniqueness into everything you offer the market.
Threat of Substitution
Can someone else do what you do – at a lower cost?
You don’t just have to protect against classic examples like knock-off handbags and generic drugs; you need to watch out for copycat tech companies.
Just think of all the ads you’ve seen for poor copies of best-selling apps and games!
When people can replicate your top-selling product/service with less effort (or at a greater level of quality), you lose market share.
Work against this dilution of your sales volume by offering both high-end and cheaper versions of your product/service.
Keep everyone interested in your offerings in your wheelhouse – regardless of their ability to pay and preference for luxury/convenience.
Threat of New Entry
Is it easy for someone to jump into your market? What barriers to entry exist?
Understand the startup costs for new competitors. Do they need to jump through regulatory hurdles? Do they need to meet comprehensive legal barriers?
Plan for competition in your profitable niche. Understand how easily (or not) potential rivals can enter this market by projecting their growth costs and likely market share.
#3 – Sharpen Your Customer Focus
Create a customer empathy map to better understand your customers’ life situations, behaviors, concerns, environments, and goals.
Created by Dave Gray at Xplane (and popularized by Alexander Osterwalder), the customer empathy map has four quadrants:
- Do & Say
- Think & Feel
This map also features sections for Pain Points and Desired Benefits.
In all six sections, list the various factors that make up your ideal customer’s world. Assemble stakeholders from all levels of your company–and beyond—to create a comprehensive and complete model.
Use customer empathy maps while analyzing consumer data to improve your business growth strategy.
Model consumer motivations, beliefs, and environments to innovate products and find new ways to serve.
When creating the new value propositions that fuel growth, you must understand your ideal customer’s goals, challenges, beliefs, values, and situations.
If you correctly target your market’s wants and needs, you can thrill them, boost your brand reputation, and avoid the “one great product” S-curve!
#4 – Join the Refounding Movement
Today’s biggest companies aren’t the blue chips of days gone by, slowly amassing greater and greater market shares and bedrock stability.
Companies like Amazon, Apple, Microsoft, and Facebook top the charts due to their bold innovations. By mainstreaming new technologies, these giants have risen quickly into the ranks of the world’s largest and most influential companies.
- Stay “lean” and mean.
- Maintain (or revive) the innovative spirit your company fostered in its early days.
- Get on the Build/Measure/Learn/Repeat cycle – and never stop.
Experimentation is the life-blood of your company. You got where you are by doing something different than everyone else.
Scientists thrive when they learn about the market; Business people win big when they learn to experiment.
Your company most likely needs to take a “throw it at the wall and see what sticks” approach to innovation.
Scientists examine hundreds (and thousands) of ever-so-slightly-varied iterations before finding that next great breakthrough. Businesses can profit from the same “try and see” mentality; don’t’ be afraid to grind it out.
Use Steve Blank’s customer development process to combine the strengths of the business and scientific worlds:
- Customer Empathy – Take a second look at your customer empathy map. Identify a problem your customers want/need you to solve. Brainstorm ways to bring a quick, affordable, and testable solution to market – as soon as possible. Your plans and ideas matter for nothing until you get your first hard data from consumer interactions.
- Minimum Viable Product (MVP) – Create the smallest, cheapest, fastest-to-market solution you possibly can. Test this product/service in the marketplace to learn more about its strengths and weaknesses. Develop quick and simple offers and sales – you can optimize your sales strategy after you learn what works (and what doesn’t) in the new niche you’re targeting.
- Customer Validation – Split test your results and optimize your sales approach, one step at a time. Start with what has worked before and slowly adjust, until you find a marketing approach that matches your offering – and your target audience.
- Customer Creation – Plan the steps and phases you’ll take as you scale up your business model. Take measured steps toward greater manufacturing output, hiring levels, and ad spending. Don’t rush this ramping-up process. You need the market data you’ll gather at each step to adjust your trajectory and avoid over-investing in the wrong areas.
- Customer Building – Construct a larger, stronger, and more-innovative version of your business around this new business growth strategy. Bring on managers and employees with relevant skills and experience. But, most of all, find people who share your vision for bringing a ground-breaking solution to the market.
#5 – Get Help from Toggl
With our simple and powerful time-tracking tools, you can identify what strategies best stimulate growth. With our easy-to-create reports, you can allocate resources according to data-driven decisions.
Set SMART Goals and vigorously pursue your next growth product/service with comprehensive time-tracking support.
Understand how your teams spend time (and other resources) to maximize your productivity and eliminate waste.
Toggl isn’t just a time-tracking and productivity tool – we’re an essential part of your business growth strategy. Join top companies like Amazon, Forbes, and Yale by learning more about Toggl Enterprise – today!