The primary goal of any entrepreneur as they start a business is to make profits from said business. All the actions that the businessperson takes revolve around this main goal. It would also be a business pioneer’s goal to grow their business, which calls for planning for growth or coming up with strategies for growth. A business growth strategy is an outline of the steps that should be implemented to take a business to the next level. The entrepreneur, together with the team that manages the day-to-day running of the business, can do the planning, or they may seek the services of competent and experienced business consultants to help them craft and execute a growth strategy.
Business plan vs. growth strategy
A business growth strategy may be confused with a business plan, but the two are quite distinct. While a business plan is broader and is meant for you as an entrepreneur and for outsiders such as investors, banks, and other stakeholders, a business growth strategy is intended for your use as the businessperson. The strategy focuses on how you will grow your business, and it looks into things like where to find sources for new clients, how to expand in the market with the possibility of venturing into new markets, and any new products the business can offer its customers.
The different growth strategies
The question that dominates the mind of the entrepreneur and other concerned parties when it comes to business growth is how can the company grow? Several paths to business growth exist, and it’s on the business leadership to choose a growth path or paths that best suit the business. Some of the growth approaches that a business may take include the following:
- Increasing the market share
The business is trying to find more customers for its current products in the particular market it operates in. You’re looking for ways to increase the number of customers for your products. If you decide to take this path, you will need to do vigorous marketing and advertising. Also, you may think of the various pricing and promotions you can employ to attract more customers.
- Entering new markets
You’re looking at possibilities of venturing into new areas with your current products. This may involve starting to sell in other countries, thereby going international, or locally opening a new outlet in a town where you do not yet have a presence.
- Diversifying or introducing new products
You’re looking into developing new products to sell to your current and/or new customers. This may be within your current line or in an entirely different line.
- Start new distribution channels
The business is exploring how it can reach more people with its current offering. For example, for a business that is wholly dependent on brick-and-mortar stores, it may start an e-commerce website, thus creating a new distribution path. Also, a business that was distributing its goods on its own may partner with retailers and other agents.
- Buying other businesses
For a business with available funds, this option can fuel its growth tremendously, as it will take the business several steps ahead of the other growth paths in a short duration. For example, acquiring a new business may bring new products, increase the market share, offer opportunities to use new distribution channels, and enable the process of entering new markets.
- Repositioning and efficiency
The idea behind this strategy is to increase your profit margin by repositioning your product or streamlining your operation to enhance efficiency.