Business planning for growth is not simply a one-off activity, nor is it a templated chore to be grudgingly completed once a year or when external finance is needed. No, your planning should follow the same cycle of development as your business and possibly the first major transition in emphasis is when you move from planning a startup to planning a growing concern.
Once your product or service has been introduced, it is heading toward the growth stage – a critical period in which you aim to consolidate your market position, boost sales and improve profit margins. However, there are a number of challenges associated with the growth stage which must be factored into your planning:
Faced with these challenges, you might be tempted to stay small. Growth? Who needs it? But if you stand still, eventually your business will stagnate and customers will be tempted away by newer and shinier offerings. Luckily, if you need an incentive, the growth stage also carries benefits:
One way to start identifying your growth opportunities is to categorize them according to whether they involve new or existing customers and new or existing products. The simplest to plan for is selling existing products or services to existing customers: relatively easy in terms of time, effort, resources, investment, etc. At the other end of the spectrum is selling a new offering to new customers; much more costly and possibly requiring capital investment for research & development and marketing. The other two combinations (new products to existing customers, and existing products to new customers) fall somewhere between the two in terms of cost.
So, in terms of quick wins, targeting existing customers with your existing product or service is the low-cost and more immediate option. However, you need a longer-term strategy that covers the other directions and those may require fresh investment; which is where a compelling growth plan comes in. A startup business plan includes a number of standard sections – executive summary, overview, products/services, marketing, success measures, people, financials – and is focused on enticing investors to join you in a new venture. The goal of a growth plan may be similar (the garnering of investment capital) but there are some key differences of emphasis: