If you are the owner of an SME or start-up, you likely have a vision for your business’s future. Maybe you want to become the owner of a nationwide supplier of services or products, scale up your operations to meet increased demand or simply improve your profit as a company.

Whatever it is that you want to accomplish, your business will need to grow – and growth is not something that happens by accident. You need an appropriate growth strategy to make it a reality.

The most successful companies will carefully plan out their journeys of growth. This will include short and long-term tactics that act as the stepping-stones towards their ultimate goals. By having a similar plan in place, you can craft a trajectory for your enterprise that will allow you to deliver growth effectively.

We have put together everything you need to develop a growth strategy so that you can excel in your company’s ambitions.

• Know what you want to achieve – and what growth is needed
• Plan your tactics
• Reflect on your operations
• Understand the financials

Know what you want to achieve – and what growth is needed

The first step to creating a growth strategy is to outline what the intention of your growth is. This should be tied to an overarching end goal for your business, such as dominating a particular industry, having an annual turnover of a set amount or expanding to become a national or even global brand.

Any goal you set out should be tied to a measurable metric, such as sales figures, overheads, profit margins and customer loyalty scores. These metrics can act as a benchmark, indicating what KPIs you will see in order to have achieved your intended growth. For example, what measurements would you want to see in place to prove yourself as an industry leader? What metrics would need to be present for your business to become ‘global’? By knowing these metrics, it gives you a performance guideline to work towards that can be tracked in real-time.

Once you have outlined your end objectives, you can narrow down what kind of growth is needed to achieve them. Growth comes in many forms: you could grow your product or service offerings, your staff, your company assets through equipment or processes, or your internal processes to increase output. Depending on your goal, you will need to utilise at least one or a combination of growth types to scale up the relevant aspects of your company to realise your ambitions. Once you have determined the growth you need, it will make the tactics and funding support you need much clearer.

Plan your tactics

Once you know how you want to grow your business in line with your desired objectives, it is time to plot out how you will realise it.

The tactics you pursue will largely depend on what it is you are hoping to achieve, so it’s vital to think carefully and cleverly about what will work best for your business.

Common tactics a business might implement on the route to growth include the addition of new products or services to their portfolio. Using product development, you can identify unaddressed challenges that your customers are facing and find the right products or services to fill the gap. Effective product development can result in increased demand from both existing and new customers. In turn, this leads to increased sales and better profit, as well as brand awareness, reputability and customer satisfaction. If you are pursuing this, you will need to spend time planning what products or services you may be able to offer, how you will account for this logistically and how your offering will suit the customers you want to target.

Similarly, you may choose to target new audiences with either a new product or your existing offerings. This could be through identifying specific audiences that are not being adequately served by your competitors, thereby increasing your market segment, or by diversifying your existing customer base to serve a broader range of individuals. This will allow you to again increase sales and profit margins by expanding your customer range. However, to succeed, you must consider how you will target these new audiences using the right products and marketing – and this should be documented in your growth strategy.

Another tactic many businesses will utilise in their growth mission is mergers and acquisition. By buying up other firms, you secure their assets – including their customer base, services and operations, as well as physical assets like office spaces and equipment – into your control. If the firms you acquire are competitors, you will increase your share of the market, leading to higher attribution of sales. As the enterprises you gain will likely already be set up and running, this can be an easier way of growing your business, providing you have the funds needed to acquire. Such a tactic is particularly beneficial if you wish to build a national or international presence. However, it is vital to make sure you have the capacity to manage or absorb these additional businesses to make them effectively contribute to your overall growth.

Additional channels are another way to seek growth. By identifying and implementing new avenues for both sales and marketing, you can improve brand awareness and make it easier for consumers to purchase from you. The right channels will allow you to increase sales without having to adapt your offering or target audience by allowing consumers to find you on a wider scale. Channels to implement could include social media, advertising, digital and e-commerce, all of which have the ability to optimise awareness and sales. As a result, you will enjoy increased profit, better return on investment and even lower overheads if you utilise cost-effective channels.

By understanding the different tactics at your disposal for your intended growth, your company moves can be plotted out in your company’s bid to reach the next level. These tactics should all work together over the long-term to allow growth to happen gradually and efficiently.

Reflect on your operations

As your company starts to grow, it is essential to have the logistics in place to allow that growth to happen and to make sure your business is able to cope. In most cases, growth requires increased demand. Fulfilling increased demand means having more staff, better processes, additional assets and funding for higher running costs.

As part of your growth strategy, consider what the implications will be on your operations and what you will need to put in place at each stage of growth. For example, if you are adding a new product to the business portfolio, reflect on whether you will need to hire additional staff or new equipment to provide that product. If you are targeting new audiences, determine whether you will need new locations or customer service assistants to serve them. If you are utilising new channels, analyse what internal processes you need to run them effectively.

When implementing growth tactics, you will commonly need to grow internally. As output increases, you will need to have not only the employees in place to carry out the work but also the supplies, the processes, the training, the equipment and the funding.

With merger and acquisitions, you will often obtain some of the resources you need to scale up operations appropriately. However, you will still need to get any acquired businesses operating in line with your existing processes to ensure unity across your enterprise and enhance productivity. So, make sure you map out how you will do this in your growth strategy.

Understand the financials

Behind every great business plan, you need to have the right funding. So, as part of your growth strategy, you will have to arrange what finance you will need and where you will get it from.

To do this, make sure you are aware of the cost of every tactic you will be employing in your operations, including the price of increased supplies, additional labour and the purchase of high-value assets like machinery. By doing this, you can ensure your growth is not only thought-out but cost-effective too; your growth should not cost more than the profit it is bringing into your enterprise. As a result, you will be able to achieve bottom and top-line growth simultaneously.

The finance you require for your strategy will vary depending on the type of growth you need and the financial position of your business. Very few companies will have the money they need to expand laying in their bank accounts, so expect to utilise assistance from other sources. Common sources of growth funding include loans and investment, grants, invoice discounting, trade finance and cashflow management.

Different sources of finance can link in with the different tactics of your growth strategy: for example, if you need to purchase new equipment, hire purchase or leasing will be a worthy funding option. Find out the funding solutions that work for the various types of growth.

By understanding the financial mechanisms that will underpin each stage of your growth timeline, you can keep your business on the correct trajectory and eliminate barriers. The right funding will also help you to enhance cashflow in your operations, which is essential when scaling up to meet new demand and productivity.

Get advice

Undertaking growth is a big project for any business and can effectively take you from a ‘start-up’ to a well-known industry name. However, planning is essential to make sure that your growth can happen in the right way, with tactics, financials and logistics all considered. As a result, you can reach your company goals and ensure that your growth is a success.

If you need advice on growing your SME and how to fund it, we can help. Our team of advisors have experience of expanding businesses in a range of sectors, meaning we can provide tailored guidance for your company and its unique ambitions.

Please call the team today for a free consultation or email [email protected].