How to Plan Business Growth

Far more books and articles are written about starting a business than growing one. Perhaps that is because there are some very basic activities that apply to the start-up of a wide variety of business types. After a business celebrates its grand opening and progresses through the break-even point, the methods by which it will grow differ by industry, customer type and even entrepreneurial management. The owner has to decide how best to grow the business by analyzing a number of factors affecting expansion:
corporate mission
strengths and weaknesses of the business
financial resources: existing and potential
customer needs
competitive influences
life cycle of existing products
profitability of potential products
human resources: sufficiency and capability
sales and service capability
research/development time and expense for new products
business environment: economic conditions, access to raw materials, industry trends


Statistical sources for business information often cite lack of money and lack of management expertise as the primary reasons for business failure within the first five years. If an entrepreneur makes errors in assessing the variables above, the results can be more costly than the business can survive. If growth is too rapid and uncontrolled, cash flow, assets, quality control, and management systems can suffer irreparable damage. Your firm’s growth should be planned as carefully as its start-up. The most basic tool for growth is a strategic plan.

An extremely important adviser to your growth plan is your accountant who can help you evaluate the financial risks of your strategies. The accountant can anticipate the cash requirements of your growth plan and recommend the timing and sources of financial assistance if required.

Entrepreneurs often define growth as an increase in sales. While the strategies for increasing sales are often specific to your type of business, you should be able to jump-start your plan by considering each of the following questions:


1. Can growth be achieved by selling more of your existing products to former or existing customers?
What would it take to convince your customers that they should buy in larger quantities?
Are there additional uses for your product not yet explored by your customer or your company?
Are any of your customers buying some items from you, and some from a competitor?
What offer would encourage the customer to give you all the sales?
Would additional staff, promotion, longer hours, better customer service or any other alteration in your business practices lead customers to increase their purchases?
How would an add-on, product improvement or assortment change help sales?


2. Can growth be achieved by selling new products or services to previous and existing customers?
After purchasing a product from you, are your customers buying supplemental or related products from another vendor? Could these add-on products or services be part of your product line?
What new products are needed by your present customers? Would these new products fit into your corporate mission?


3. Can growth be achieved by finding new markets for your present products?
What additional resources would be needed to expand geographically to sell to new customers?
Which foreign markets are most appropriate for your product?
Are there customers of a different age, income level, industry or other characteristic who are not presently purchasing from you, but have a need for your product?
Can your products be used to serve more than one need? Can it be sold to a different group of buyers based on a need you have not yet promoted?
Is a competitor with a sizable market share changing products or business practices? Will the change allow you to sell to a competitor’s previous customers?
Would a change in brand name, packaging, channel of distribution or other marketing variable allow you to sell your present product to new groups of customers?


4. Can growth be achieved by developing new products or services for new groups of customers?
Are there unmet needs in the marketplace that are emerging as a result of changes in technology, lifestyle, the economy or other conditions?
What additional products are sold by others in your industry, but are not presently part of your offerings?
Are you presently purchasing services from a vendor that could be supplied by an expansion of your own firm?


If you decide that the method of sales growth is to increase sales to previous and current customers, your strategies must include: the production of quality products that meet the expectation of the customer, the delivery of excellent customer service, and pricing that assures the buyer of value. Repeat sales rarely happen simply out of habit or convenience, but because a customer was satisfied with the initial purchase experience. It is less expensive to sell to a present customer than to find new ones, yet many firms develop the majority of their strategies with their sights on the new customer. Always start any search for increased sales with a thorough knowledge of present customers and their needs. Even if you find you cannot sell more to them, you can still use the knowledge gained by applying it to strategies you will use to win new customers.

If your business expansion occurs as the result of selling new products to your present customers, one advantage is that you have experience with those customers. Your experience should allow you to understand their needs and their buying habits. If your record-keeping has been thorough, you will have mailing lists and other data allowing the introduction of new products in a cost-efficient way. Business expansion through the addition of new products or services should be well planned even when existing customers are the prospective buyer.

If you choose to grow your business through selling existing products or developing new product lines for new customers, you have chosen a path that can be very profitable. Market research on the many factors affecting the buyers’ purchasing habits should be undertaken as a part of the growth plan


Sources : http://rriyanto.blogspot.com/