Two years after opening, 20 percent of new businesses fail. After five years, 45 percent of them fail. And after 10 years? 65 percent shut their doors for good.
You don’t have to be one of those statistics. But if you want to ensure that those statistics aren’t your fate, you need to focus on business growth. And you need to start thinking about growth strategy from your first day on the job onwards.
It’s challenging to put that growth into action. Every business owner, market development professional and sales rep knows that. You want to be ambitious without being unrealistic.
But didn’t you challenge yourself from the jump? When you set out to build your career with hard work, you know it wasn’t easy. Yet you find new rewards every day.
If you need growth, you need to develop a growth strategy. It is a powerful tool that can help you find where your business growth potential lies– and then get it there. Keep reading to learn how to formulate your own based on past professional success.
What is a Business Growth Strategy?
There are two business strategies you might confuse with one another. Your business growth strategy is different from your market strategy, contrary to popular belief.
Your growth strategy is a tool that helps you expand your business. You can maximize that business growth with a lot of various methods. Some of those include:
- Opening in new locations
- Making investments for customer acquisition
- Developing a new product line according to the product development strategy
Whichever strategy you choose, it depends on your industry and target audience.
Always keep in mind that your growth strategy is not the same as a marketing plan.
Your growth strategy is a blueprint for success, which makes it more general than that. It guides you through all of the steps that get you from Point A (where you stand in your market now) to Point B (where you want to be).
Marketing plans involve your marketing department. They stand alone for the most part and look at a singular side of your business.
Growth strategies involve each of your organization’s departments. They are the umbrellas that marketing plans fall under and look at all sides of your company before they grow it.
Ultimately, it looks at the big picture.
Why is Growth Important in Business?
Have you ever shopped at the grocery store and had an employee offers you a sample? Say the sample is for cheese and crackers. The cheese is great, but the base is a cracker that’s stale and bland. This brand has been around for ages. You thought they would at least improve their cracker recipe. Nobody ever buys it since it’s stayed the same for so long.
You would just buy the cheese, but the duo is only sold together. You don’t want a stale package of crackers sitting in your pantry. You don’t buy either.
Think of the cheese as any number of your business’s departments that you excel at, like:
- A high-quality customer experience from your customer service team
- Content marketing
- Competitive pricing
Just like the cheese portion of the cracker and cheese duo, you might make small changes to any of those departments. Your customer base could love those changes. But imagine that your business, or the cracker, becomes stale and never grows as a whole. Nobody wants to bother. Your business goes kaput.
Without a growth strategy, you have no foundation to grow on a large scale. It is the first building block to catapult the rest of your organization into a whole new world of success.
Growth Strategy Steps
You might want to alter these steps as time goes on. You cannot expect all of the changes that are sure to arise as you grow. But we don’t expect you to come up with the basic steps on your own.
That’s why we have the following five steps to guide you with your growth strategy. They are simple, easy to follow now and you can expand upon them later.
1. Perform Industry and Market Research
“Whoa, whoa, whoa,” you’re thinking. “Why am I conducting market research here? You just told me that my market plan and growth strategy are not the same things.”
Indeed we did. But remember that your market plan is a subsection of your growth strategy. So you have to start at square one. Plus, you will be glad you did it later when you have to perform market research again. You will have your growth strategy as a roadmap to base your research on in the future.
It’s impossible to know how you can grow if you do not know what you are up against. If you already established yourself in your industry, it’s still beneficial to refresh your memory with industry analysis.
You need to know if it’s even possible or if you need to grow at all.
We recommend a combination of several market research tactics. But here are some examples of how to perform market and industry research:
- Ask your current customers or prospects to fill out a single or set of surveys to see if there is room for market penetration
- Run a focus group of your current customers or potential ones
- Analyze market research that is already available from other industry leaders
All of the data that you find during step one gives you a clearer idea of what to expect. Then, your individual growth goals help determine your overarching business goal. That includes things like your timeframe and budget. Let’s dive deeper.
2. Define Your Growth Goals
You have some initial information that will build with time. So now you have to get more specific.
Make sure you already know what you will grow and why you will grow it. Then you can get into how you will grow it, too.
Here’s the thing: you also need to put your finger on the big picture here. What does that Point B we talked about earlier look like? Where do you want to be? Where is your pinnacle of success?
When you think of that peak goal, it shouldn’t be impractical. The best way to ensure that it isn’t is by formulating your goals according to your industry research.
Then you have to make your growth goals measurable. You know that your general goal is to increase sales. Everyone within and without your business knows that, too.
A growth strategy quantifies those goals. Think in terms of percentages and deadlines. Something like “boost sales of X product by 20 percent. Accomplish it by X quarter in two years” is more appropriate.
3. Identify Your “North Star Metric”
Some people also call the North Star Metric the “One Metric That Matters,” or OMTM.
In short, it is the value number that your customers assign to your product or service. It’s a number that indicates why your products matter to them and improve their quality of life. What number do they conjure up when they want to show how much your brand means to them?
Brands at the frontline of their industry use their North Star Metric as a focal point for their long-term growth. They use it as their guiding light for growth.
Take the streaming service Spotify, for example. Their NSM is “time spent listening.” This number takes into account many input metrics to get to this one output metric. It shows their service’s value in the eyes of their customer base. It hints at a positive experience and how it will influence customer retention.
That means that you need to relate your NSM to revenue and retention goals, too.
Identify yours then how you fare right now with it. Improve it specifically to bolster your growth goals altogether. It could be your:
- Customer lifetime value
- Recurring monthly revenue
- Total watch time
4. Conduct Growth Experiments
Growth strategy is an art, but it’s also a science. And the best scientists conduct experiments.
It’s difficult, but it proves fruitful.
Avoid waterfalling. That’s when your team tacks more and more requirements onto a project. It leaves you with ever-rising implementation time.
You can avoid it by segmenting your projects into smaller tasks. Break your growth experiments up into minimum viable tests. They will bring you important information in less time. They also show you if your growth projects are worthwhile at all.
Also, assign deadlines for your projects so that your team is on the same page.
You want experiments with less effort and more output.
5. Execute According to Your Plan
You already outlined your plan. You used your resources to set your goals. So make sure you do not stray from that growth plan. You made it to bring about results. If you did it well, it will do just that.
As you execute your plan, hold yourself accountable and inspire the same accountability in your stakeholders. Employ all communication skills in your wheelhouse. Measure your results with forecasted goals often and adjust when you need to.
You hone your growth strategy over time and with experimentation. As it develops, you will find many parts of your business that impact your growth.
Stay ahead of the game with our expert help at Selling Revolution. We know how to help you expand as a company.
Just ask any of the other small businesses who come to us: their higher average sales speak for themselves.
Today is the best day to book a call with us. You want that growth and we know how to bring it to you for long-term results. Why wait?