Companies that don’t grow tend to fail. Considering that more than 20% of businesses fail in their first year of operation, according to data from the U.S. Bureau of Labor Statistics, it’s little wonder growth is a top priority for company leaders.
Although business growth is often easy to articulate, it can be difficult to put into practice. While most business leaders understand the need to continuously find new opportunities to grow and take steps to take advantage, some struggle to develop business growth strategies capable of delivering meaningful outcomes.
A business growth strategy is a set of actionable steps companies take to meet organizational goals that help achieve their overarching vision. A sound growth strategy equips businesses with the insights and roadmap needed to take a long view of their market, helping them navigate constantly changing customer demands, technology advancements, and competitor behavior to position themselves for future success.
Not every company defines strategic growth in the same way. These are some of the main growth objectives businesses pursue today:
Deciding which growth aims are right for your business depends on your unique characteristics. \>When devising a strategic growth strategy, leaders at the company should take the time to assess the nature of your business to best understand where the most lucrative opportunities exist while pursuing business goals that are relevant only to your organization, your customer base, and your industry at large.
The most successful growth strategies are tailored to the specific needs and goals of the business. Still, there are some fundamental elements that all growth strategies should include. These are:
Key value proposition: Identifying your key value proposition begins with understanding your customers’ main pain points and emphasizing the benefits of your offerings. From there, it’s important to have a wide-ranging understanding of the marketplace, so you know how to position the differentiators that set you apart from your competitors.
Market penetration: At the base level, business growth is about taking advantage of opportunities to introduce new product offerings, attract new customers and expand market share. Your growth strategy should clearly define your customers, segments, and markets that represent the best opportunities for market expansion.
Customer centricity: Your business growth strategy will only work if you provide meaningful value to your customers. Put the customer at the heart of everything you do. Take the time to understand their needs and challenges, develop offerings that address those, and communicate your value proposition messaging in a way that speaks directly to them.
Product diversification: Customers change, and that means solutions that created value yesterday might fall short tomorrow. As you continue learning about your customers’ evolving challenges, focus your strategic energies on new product development to respond to those problems and keep you relevant in the minds of your customers.
Consider the following steps to build a winning growth strategy that delivers real results for your business:
An effective business growth strategy starts by identifying your goals. These should be relevant to both your market (ask yourself, “will this create value for my customers?”) and your business (pose the question, “does this align with our mission and values?’). Your aims also need to be measurable so you can quantify your progress over time and make tactical adjustments as needed.
It would be best to create a hierarchy of big, medium, and small goals when identifying them. Small goals are the quick wins you can attain in a matter of days or weeks. In contrast, big wins are the longer-term strategic objectives that are intrinsic to who you are as an organization. Stacking up smaller wins over time should help you advance toward your bigger goals.
Establishing a successful business growth strategy is fundamentally about positioning your organization to take advantage of emerging market opportunities. To do so, you must conduct extensive market research to understand your industry’s contours and learn what trends and challenges exist. (Typically, market research provides insights into new technology solutions, external growth factors, and market demands, among other information.)
Whether you conduct the research yourself or purchase in-depth industry reports from accredited institutions, market research gives you a better understanding of where the market is going and what you can do to adapt accordingly (and, of course, get ahead of your competition).
Develop a deep understanding of your competitors by reading their content, searching their web pages, and signing up for free trials. This helps you learn how they position themselves and where opportunities are for you to differentiate your brand.
Competitor analysis can also reveal niche markets other players have capitalized on, helping you pin down additional goals and opportunities. For example, suppose a competitor introduced a new service line proving extraordinarily popular among consumers. In such a case, you might want to learn about the product’s shortcomings and introduce one that better responds to customer needs.
Once you have the data, it’s time to implement your plan. Collaborate with key individuals at all levels of your organization and define a logical series of steps that leads you to your goals. Your growth plan should include clearly defined action items, roles and responsibilities, accountability mechanisms, and deliverable deadlines.
It’s also important to list the key performance indicators (KPIs) you will use to track progress toward your objectives. They’re an important component of your strategy as they help set expectations for all stakeholders involved in the execution of your strategy.
Ensure you have a testing mechanism in place to measure your business strategy’s progress. As performance data comes in, adjust, stay on track, and respond to new information.
Your industry might experience fundamental shifts that render some goals obsolete or present previously unknown or non-existent opportunities. Your growth strategy should remain amenable to those market shifts to maximize your chance of long-term success.
While the above growth strategy steps apply to businesses of all sizes, small businesses have other unique challenges to consider before initiating a growth plan. Some may be in the early-stage seed investment, while others may be struggling to establish a presence in the market. Growth strategies have to account for those problems and be tailored to the unique circumstances of the business.
Consider the following growth strategies for your small business:
Market segmentation: Small businesses often struggle to compete with larger players in their chosen space. By segmenting your target market into more defined subsections, you can identify a smaller group of customers and focus your marketing and sales resources on winning those businesses. This helps you avoid the more prominent players in your industry and get more return on investment from your budget.
Build an online presence: Some small businesses erroneously believe that a robust digital marketing strategy only works for larger companies. Consider investing your time in building a sleek, modern website, developing a social media presence, and creating an organic and paid search strategy. This can help you expand beyond your existing market and reach new customers who didn’t know your brand existed.
Collaborate with another company: Establishing a strategic partnership with another company operating in similar spaces can give you access to new customers that are likely to be interested in your products. (For example, a company that sells mountain bikes might secure new business by targeting the customers of a company that sells hiking gear.)
Overhaul your hiring and retention strategies: Growth is often measured in the number of employees on staff, but don’t just hire new people for the sake of it. Find innovative ways to identify, attract, hire, and, most importantly, retain top talents. Learn what prospective applicants want from an employer, and create a workplace that incorporates and fulfills those desires.
Whether you’re a mom-and-pop shop or an international company, Cathay Bank has the resources for you to achieve your business goals and drive your business success.
We offer a number of financial business solutions you can use to plan and execute your business growth strategies.
Contact our team today to learn more.
This article does not constitute legal, accounting or other professional advice. Although the information contained herein is intended to be accurate, Cathay Bank does not assume liability for loss or damage due to reliance on such information.