What Is a Growth Plan (and Why Should Your Business Have One)?
What is a growth plan (and why should your business have one)?
Find the answer to “what is a growth plan?” and learn how to it could benefit your business.
If you run your own small business, chances are you rarely have time to sit down and think about how to take your company forward.
But planning for the future in a disciplined way is vital for long-term growth.
You probably have a business plan already. The banks are always keen to see those, but if the business plan represents a destination, there’s still a lot to do in order to get there. For that reason, a growth plan can be worth the investment in time and effort.
What is a growth plan?
A growth plan is a means of enabling you to keep track of the financial condition of your business and project future short-term increases in revenue.
The great thing about a growth plan is that it’s concerned with the potential for moving forward in short cycles. The whole plan can last up to a year or more, but is then broken down into shorter target periods of, say, three months at a time.
Unlike your business plan, the growth plan is essentially for your own purposes. It’s less about providing credibility for bank loans, and more about giving greater agility to you, the business owner.
How can a growth plan benefit your business?
The broadest explanation of what you’re attempting to do can be defined in three simple steps.
Establish where the company stands now, and think about where you want it to be at the end of the plan period.
Finally, explain how you’re going to move the company from its starting point to the end point.
By doing this, you’re providing yourself with a clear, step-by-step way forward that can be invaluable when the pressure’s on. You’ll have a clearer picture of where to allocate limited resources in order to gain the best results, plus it’s a great way to prevent your future prospects from getting bogged down in the day-to-day stresses and strains of your business.
When to create your growth plan
All too often, growth plans are introduced as a result of business problems – the emergency planning that’s undertaken to get a business out of tight financial circumstances. But if it works in bad times, why not set it to work during the good times as well?
The strength of this approach is it allows space for experimentation and changes of tack. You look at what works well during each cycle, then adapt your way of doing things when you enter the subsequent cycle. It’s all about lessons learned.
How do I formulate a growth plan?
The best way to set one up is to run through a number of steps.
1. First, look at your company as it stands. What’s your financial situation? Do you have resources to invest?
2. You need to know about your clients too. Who are they? Why do they use your business? If you want to increase your sales, targeting is essential. Why are they coming to you?
3. You should also consider your competitors. Who are they and what are they doing better than you? Surveys can help you to gather this information.
4. Next, establish where you want your business to be at the end of the plan. What are you seeking to achieve? Assess your strengths and weaknesses as a business, factoring in any foreseeable hurdles or changes in the business climate to come. A SWOT analysis can be useful here.
Once you’ve completed these steps, you need to consider short-term targets you can realistically achieve.
Think about those cycles again, keeping it manageable, then formulate a few actions you can take to advance towards your objectives. Think about ways you can deal with and engage with customers, and maybe consider digital strategies.
Where a business plan might envisage the completed building, a growth plan is more about how to lay each course of bricks to reach a whole in the most efficient manner.