Continued from last Monday
Here are some issues that lack of a growth plan leads to:
Before attempting to expand your business, you need to take time to document your growth strategy. With a well-thought-out and documented strategy in place, you can ensure that your business growth is led by informed decisions, thereby avoiding surprise pitfalls that compromise profits.
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What is a growth strategy?
In the simplest sense, a growth strategy is a document that details your business goals and defines your strategies for meeting those goals. It’s a road map detailing the goals you’re striving to meet, how you’re planning to meet them, and when you’re planning to execute.
The most effective strategies are documented so that they can be shared across the organization. Having a documented strategy creates cohesiveness, allowing decisions and initiatives across the company to be catered to established goals. While initial planning is crucial, iterative planning is important as well. By revisiting your strategy at regular intervals, you can make strategic shifts based on new information, market changes and historical data.
Business growth strategies
There are many ways to grow a business. Which way you choose to expand largely depends on your ambition, your reasons for growth, and the opportunities and resources available. However, two crucial factors for choosing a business growth strategy exist. They are:
Based on these factors, strategic tools—such as the Ansoff matrix—suggest four main types of business growth strategies.
What are the four major growth strategies?
In the simplest terms, there are four possible strategies for growth, each with its own distinct risks. These are:
With market penetration, you try to sell more of the same things to the same market. The risks are usually low as you focus on capturing a bigger share of your current market with the products you already have.