Writing a Business Plan: Choosing a Growth Strategy
After launch, what's going to be your growth strategy?
Potential investors who read your business plan will want to know about your growth strategy—how you plan to grow your business once it's launched and off the ground.
Your growth strategy entails more than just demonstrating how your revenue will grow. This section of your business plan is about proving to others that you have a plan for bringing your product to new customers and new markets, and perhaps even introducing new products.
The obvious objective in outlining your growth strategy is to show how these moves will increase sales. This can happen in a number of ways.
If your business requires a retail presence, outline where you might seek to open additional shops and what your geographic strategy will be. Don’t assume you can go national just because your product is regionally successful.
New Client Acquisition
Once you’ve reached your original core customers, who else might be interested in your products? If you’re a business-to-consumer company, think about offering business-to-business services, and vice-versa. Office supply stores, for example, have been very successful at catering to the needs of individuals as well as small-business owners.
New products are an obvious way to grow sales, but their issuance often is poorly executed. Discuss your plan for introducing new products or services in the short, medium and long-term. These can be variations of your core product or completely new offerings that expand your overall base.
Restaurants often turn to franchising, and it is a feasible option for many other industries as well. Franchising works best when your product is consistent and customers have certain expectations about your brand.
How will you use the internet to grow your sales? Will you sell your product on your own corporate website, partner with an existing internet retailer or maybe advertise online to build local brand awareness? Using the web is not mandatory for selling your product, but your growth strategy should include an online element.
Look back at the marketing section of your business plan. If you’ve already addressed facets of your business growth strategy in that section, you can use it to detail your expansion, and then refer to your marketing section as an implementation tool.
Growth has bottom-line advantages, too. The more business you do, the more you can take advantage of learning curves and economies of scale. Learning curves allow you to become more efficient as you gain experience. Economies of scale refer to a reduction in average cost over time because of factors such as buying power and managerial specialization.
A final option to address is growth through acquisition. This would come into play after your startup is more established and ready to expand into other markets. At this stage, you may want to address which companies, or types of companies, would make ideal acquisition targets. Look for companies that are a good fit for your product and distribution methods, but that also present new opportunities for growth. Any duplication from an acquisition should be balanced out with growth areas.