Contrary to popular opinion, business growth isn’t always a good thing. In fact, it can be a bit of a double-edged sword, especially when it happens too soon. According to Crowdspring, a massive 74 percent of startups fail due to scaling too quickly. Fortunately, business growth can be managed, and you can make it big in a stable, sustainable way. Here’s a mini-guide on growth management.
What is Growth Management?
You need growth management if you’re a startup with expansion plans. Think of your business as a building that’s still under construction. The ground floor is done – but that was the easy part. You now have to add in new floors on top. If you try to rush it (or do a shoddy job), you’re going to end up with a shaky structure that could be knocked over by a gust of wind. You need sturdy new floors that can be supported by your foundation.
Growth management is directing and structuring your business’ expansion in a stable, sustainable manner. It involves drawing up growth plans, based on your current position, and then executing them. With good growth management, you end up with a stable structure that can stand the test of time.
Utilizing Growth Management
To grow, you need to devise and execute a growth plan, in line with your ambitions and vision for your business. Here is how:
1. Evaluate Your Strengths and Weaknesses
You may have heard of SWOT analysis. It’s taking stock of your business in 4 areas or quadrants - strengths, weaknesses, opportunities, and threats. Conducting a SWOT analysis is a time-consuming process, but worthwhile. You gain a clear picture of where you stand at the moment, which then allows you to make informed growth decisions.
2. Determine Areas of Growth
Areas of growth are typically key business processes that you wish to expand or add to. Based on your SWOT analysis, you should be able to identify aspects of your business that could be expanded upon. Some examples:
● Yearly revenues
● Employees and offices
● Customers or clients
● Market presence
3. Choose a Strategy
If areas of growth are what you’re expanding, then the growth strategy is how you’re doing it. Every business is unique. Your growth strategy – or strategies – should revolve around your business type, circumstances, and market conditions. The most effective business growth strategies, reports Act!, are market penetration, alternative channels, market development, product expansion, partnerships, and market segmentation.
4. Conduct Market Research for Viability
You may want to grow an aspect of your business – say customer retention – but is it even possible? More importantly, is it worthwhile? Every growth initiative has a return on investment (ROI). Ideally, you should only proceed when the math works in your favor (sometimes you need to take a loss to grow). Take a look at your competitors, the economy, and supply and demand. See what you can expect, and what you need to do, to succeed.
5. Set Concrete Goals
You need to outline concrete goals to grow. You and your employees will need to collectively work on them. For instance, if your end goal is to grow your revenue, you need to take measured steps to get there. Figure out who’s doing what when to achieve a revenue increase, and set up a timeline and milestones accordingly. Give everyone deadlines. Make plans to meet often to measure progress. You can quantify your progress with relevant growth metrics – like your quarterly revenue figures.
6. Allocate Resources
You will need to have enough gas in the tank to meet your goals. The gas in the tank is more than just money – it’s also manpower and time. Take some time to figure out a budget, with some room for experimentation and failure. Figure out sources of funding and plan for emergencies. Nothing hobbles growth like a last-minute cash crunch.
7. Use Invoicing Software
In today's business world, efficient invoicing is essential for success and growth. With the right invoicing software, you can save time and money while improving your customer service. The key to choosing invoicing options is to find a system that is flexible and easy to use. It should be able to handle a variety of different types of invoices, and it should be able to integrate with your existing accounting software. In addition, the system should be able to generate reports that will help you track your progress and ensure that your invoices are accurate.
8. Implement Your Plans
It’s finally time for some action – execute your plan. Growth plans, by their nature, aren’t long-term. Think months, not years. Most companies come up with quarterly and annual growth plans. Give yourself a few months to implement your plan. You will, of course, have to oversee the execution, ensure everything remains on track, and hold yourself and your employees accountable during implementation. You may need to make changes on the fly, sometimes –and you should.
9. Market
Marketing remains a critical growth function and could make or break your new initiative. Marketing generates interest, builds up brand awareness, and aids in acquiring buy-in from your stakeholders – internal and external. Without marketing, your new strategy may not generate enough traction.
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10. Measure and Refine
After your timeline is up, you will need to measure your growth metrics. Check how well you did, essentially, by comparing your achievements to your goals. You will likely have fallen short in some areas and outperformed in others. You can course-correct, prune what doesn’t work, and do more of what does. Refine and re-implement your process to grow.
Wrapping Up
Keep in mind that growth management isn’t set in stone, nor is it a foolproof guarantee of success. Things can and do go wrong. While it can and will give you more clarity and structure your efforts. You will still need to think like an entrepreneur and remain adaptable to succeed. Keep learning and be persistent for the best results.
