Business in a Slump? It’s time to Growth Plan
Develop A Business Growth Plan
It seems like all we do is plan. We write business plans, strategic plans, marketing plans, and disaster recovery plans. We plan our businesses to death. In the early days of your business, your need to plan less. Personally, I am a planner by nature. Planning is how I organize my thoughts, how I mitigate my risks and develop my to- do lists. When our businesses are first being developed, we need to focus on the DO, and less on the planning. Yes, you heard me correctly. You need to plan less and DO MORE.
Let me explain. This does not mean the abolition of “Planning” but rather it needs to evolve to Growth Planning. As a small business you always need to be in growth mode. This does not mean chasing the aggressive growth of early business days, but it does need to evolve to be focused on implementation and the “how” rather than the “what”.
A growth plan, in its purest sense, is a cross between a business plan and a strategic plan. A business that is growth oriented has to evolve with its customers, in needs to be in touch with the market, it has to be aware of trends and the social and environmental impact of its products or services. Most importantly, a business that is not growing is stagnant and not healthy. It is reaching the peak of its life-cycle and beginning its decline.
Should businesses be in perpetual growth? Some people may say no. Some experts will tell you that a business where the owner seeks to exit, may begin to think about succession and naturally, as we age we begin a process of seeking to “slow down”. However, think about it from viewpoint of a prospective buyer for your business. Would you rather buy a business that is healthy and growing? Or one that has shown decline over the years leading up to the sale? The answer from this perspective is simple. Focus on the growth, and the rest takes care of itself. The following are what I define to be the 10 Key Components of a Business Growth Plan.
The 10 Key Components of a Growth Plan
1. Where Are You Now?
Examine the following for your organization:
- a. Mission- this is the “DO” of your organization. What you do, and how you do it.
- b. Key Success Factors – What do you do well or better than your competitors?
- c. Key Constraints-What are you limited by? Who are you limited by? What is the financing available?
- d. Stakeholder analysis-What do your customers think? How about your suppliers? Your employees? Your partners and family? Get everyone’s input, it matters
2. Where Do You Want To Be
- a. Vision Statement-Define where you want to be in 5 years and build a vision for your company around it.
- b. The Magic Number- What do you want your company to be worth in 3-5 years? How much do you want to make? This is your magic number that you will be working towards.
3. What is Going on In Your Environment and Industry?
It is vital to understand what is going on in your industry and how your company fits into it. The following analyses should be conducted to understand how all the pieces fit together.
- a. SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats). Look inward and outward to your company and industry and judge how you fit.
- b. Porter’s 5 Forces-This business school classic has staying power for a reason. The five “forces” of Porter identify how you work within the broader industry. It examines your customers, suppliers, competitive rivalry within the industry, the threat of new entrants and the threat of substitutes in the industry for your product or service. It creates a picture of how dependent or independent you can be of industry trends in general.
- c. PESTLE Analysis (Political, Economic, Social, Technological, Legal and Environmental). This examines the broader trends in your industry, from each of the above contexts and how they can potentially impact what you do.
4. What have others in your field doing?
Competitor Innovation Analysis. In the history of your industry, how have your competitors innovated? Can this type of innovation still be useful to you? What products or services do competitors offer that are successful? Can you mimic them? What is not working? Is this something you are currently doing?
5. What are people doing in in other industries that can be applied to your Industry?
External Innovation Analysis- what are others doing that is innovative in another industry that can be applied to your industry? Can you change the business model of your industry to become more innovative?
6. Prioritize Your Current Opportunities
Prioritize opportunities based on a model that identifies needed inputs, available resources and constraints. Identify your resource requirements based on:
- a. HR
- b. Technology
- c. Financial
- d. Network and contacts needed to help you grow
7. Do you Need Extra Capital or Resources to Make Growth Happen?
How will you raise it? What can you cut, divert or change from your current operations or business model to make this happen?
8. New Initiatives
What new initiatives will you develop? Identify your identify your CIPD Strategy- How will you Concentrate, Innovate, Penetrate (Market) or Diversify your company’s products or services? This is the foundation of growth. Your CIPD Strategy can happen in any of the following areas:
- a. Marketing
- b. Sales
- c. Technology
- d. Partnerships
- e. Alliances
- f. Products
Find the ones that work best for your industry and company.
9. Develop Your Implementation Plan.
Your implementation plan should be detailed and should include quarterly goals (financial and growth) and should identify key resources and steps needed to accomplish your vision and get you to your “Magic Number” of growth. Identify the riskiest steps, and develop action items to specific how you will address each item.
10. Just DO It!
At some point, you have to start growing your business. The faster you get this point, the faster your business will grow. For most entrepreneurs, this is the scariest, but most exciting part. There are ways to make this manageable. Develop a daily checklist. Do 3 things every day that will grow your business in a solid way and contribute to growing your business based on your Growth Plan. A growing business requires daily infusions and care to push it forward, but not at the detriment of the owner.
Business growth needs to be sustainable, responsible but ever pushing forward and upward. Implement these strategies, and watch your business and profits soar.