Even great business ideas don’t guarantee long-term success on their own. They may have gotten the business up and running, but business owners can’t keep counting on potential. They have to keep doing things if they want to keep growing.
Scale-ups and SMEs, in particular, need to think about what to do next to keep growing. If your business has reached this point, having a plan for how to grow it will help you reach your goals. Because you want to get your business from A to B, but you don’t know-how. A growth strategy tells you, “How do I get there?”
The writers at Harvard Business Review looked into how the retail business grows and keeps growing. Those who chose to open 4,4% more stores did worse on the stock market than those who decided to open only 2% more stores.
The group that opened fewer stores and focused on growing in the market they were already in did better than average on the stock market. This shows that just having a business growth plan isn’t enough because some methods work better than others. If you don’t have a clear, strong strategy for growth, your business might not do well in the long run.
How can you develop a successful growth strategy?
At this point, if you’re on the board, you know that you and the other board members have a lot to do with how well the business grows. Since you’re no longer testing the waters without knowing what you’re doing and have a good understanding of how your business and the market work, you can make a growth strategy with clear, measurable goals.
And you’ll need growth metrics to do that. You need to figure out your growth metrics for a good growth strategy and keep track of them. This lets you keep coming up with tactics directly tied to reaching the chosen metrics.
You can do this with the help of Ansoff’s Box. It shows four simple growth metrics: market penetration, product development, market development, and diversification, and the best ways to use each to grow your business. This can help you see the different ways your business can go.
The 4 Key Measures of Growth
Even though it’s great to have a lot of customers who prefer your products and services to others, you shouldn’t let your guard down. The competition will be more challenging because you’ll have to watch out for smaller companies to keep your position and more significant, more substantial companies if you want to move up.
You can visit where your business tolerates in the market by looking at how much of the market it has captured. You can see how your products or services compare to those of your competitors and what chances you have to get their customers. With this kind of information at your Board’s and business strategy’s disposal, you can make targeted moves to help your business reach more customers.
Product or Service Improvement
As your business increase and creates more sales, you have more resources than you did when you first started. You may employ this to your advantage by making product development a measure. Even if your products are selling well, you can make more money and keep customers coming back if you come up with new products or services they want.
Because things like the environment, technology, and fashion constantly change, your customers may not always be as happy with your products and services. At some point, their needs may change, or they may want more of what you have to offer. You must provide them with what they want because they might look for something else if you don’t.
After your products and services are well-known among your customers, your business can grow even more by selling them to new markets in different age groups, areas, or segments.
When you develop your market, you increase the number of people who might buy from you. This lets you sell to more people and get a more significant market share. You’ll have to find a way to meet the needs of the new market so that your product or service is still valuable to them.
If a business has the ability and desires to diversify, it can move boldly into a new market with new products. Scale-ups and SMBs can begin to consider this statistic because they’ve established themselves in the present market with their goods and can pursue exponential growth by investigating something completely new.
If you do this right, you can make more money because a new stream of customers and money will come in. This metric also lets your company do business in places you used to think of as foreign.
What measurements should your business pay attention to?
Ansoff’s Box can point you in the right direction, but there is no one answer for all businesses because there are many things to consider. Similarly, no single advisor or consultant can tell you everything your business needs to know. Because of this limitation, you need to learn more about the business’s needs and the whole context to figure out which metrics you need to pay attention to.
Scale-ups and SMEs, in particular, have to figure out where they might not be growing or where they might be missing opportunities. Some of the current growth metrics and strategies do work, but to ensure they work well in the long run, business owners may need to decide whether to focus on one growth metric or use a mix of different ones simultaneously.
If it’s hard for you to decide on the best strategy for your business, you could ask someone with an outside, objective view of your business and industry for help. This kind of help can help you see all the things you need to think about when figuring out your growth areas and the metrics that go with them.
How should these metrics be used?
Once you’ve chosen the metrics that will help your business grow, you can make plans and steps to reach those goals. Remember that your business growth plans must always align with their growth goals, the economic climate, and other factors that matter.
As these things change, checking your metrics regularly is essential to see if your tactic is still working. Then you’ll need to make some changes. A strategy review every six months and a review of your tactics every three months will help you stay on track.
The first Strategic Review, which can be done on your own or with the help of a consultant, will set you on the right path, and the periodic audits will keep you on track. In the end, the most crucial thing will be to find ways to grow your business. In the end, a company is only as good as its plans and those who come up with and carry them out.