To choose the best strategy for growth, you'll need to undertake an analysis of your business' current performance.
Once you've carried out the review, focus on the option that looks the most logical. The pages in this guide outline some of the most common choices.
Next, make sure this option is also the most practical. Check that the strategy reflects the things your business does well.
For more information on analysing your business, see our guide on how to review your business performance.
Playing to your strengths
A stationery supplier might identify the following growth options:
increasing market share by starting a mail order operation
diversifying by adding computer printer consumables to its range
entering into a joint venture with an educational book publisher to sell books and stationery to schools
All of these options reinforce what the business already does - providing products that enable written communications. A strategy that doesn't fit so well - for instance, selling interactive DVDs - could be harder to implement and more likely to fail.
Check the strategy against any SWOT (strengths, weaknesses, opportunities, threats) analysis in your business review. How does it address the issues the analysis found?
For example, if the stationery business recognises a declining market for typewriters, would adding computer printer consumables address all the points raised by the SWOT analysis?
You'll need to assess whether you have resources and capacity to make the strategy work. See the page in this guide on the practicalities of growth.
You'll also need to be sure that the funding is available and that your strategy will generate a profit. See the pages in this guide on financing your growth strategy and getting a return on your investment for growth.
The practicalities of growth
Your business will need to count on more resources than simply finance when putting a growth plan into action.
You should also think about the following:
Staffing - will you need to take on more people to make the strategy work? How many? What skills will be required? Are those readily available?
Training -will further training of existing staff be necessary or helpful?
Premises - are they big enough for extra stock and/or a new production line? Will there be sufficient space for staff and will you still meet health and safety regulations?
Information Technology - will your systems cope? Would new software or equipment ease pressures?
Customer service systems - would a more sophisticated system help the strategy to succeed and ease pressures in other areas?
Outsourcing - will outsourcing allow you to concentrate your resources more effectively?
To find answers to these questions, you'll need to have assessed your business' current performance and capabilities. You can find out more about this essential process in our guide on how to review your business performance.
Marketing
Marketing and sales are fundamental to the strategy. Is your existing marketing strategy appropriate to your new market and/or product? The right sales people can accelerate growth and profits. Remember it's the growth strategy that comes first - it should determine who you choose to recruit.
Planning your growth and measuring your progress are also important issues. You'll need to update your business plan and work with it as the business develops.
GETTING A RETURN ON YOUR INVESTMENT FOR