Preparing to grow a business from a small start-up or one-man-band to a global player is certainly a challenging and exciting experience. There are many stories of businesses like Amazon that started from humble beginnings and that grew to take over the world. The rise of the internet has enabled businesses like this to diversify into many different markers and reach consumers in every part of the world.
However, these success stories don’t just happen overnight. They take lots of planning and there are many more failures than there are success stories. With that in mind, having your own plan that details every aspect of your business growth from funding through the employees and suppliers is a great way to understand the risks and opportunities.
1. Do Your Market Research
Researching the market is one of the most important things that you can do before you even start thinking about whether or not to expand and grow your business. The fact that you are considering business growth probably means that you already have some indication as to whether the market is big enough and if the market is growing.
If you are thinking about diversifying your business and moving into new a market with new products, then you will need to conduct consumer market research too. This means testing your branding, products and marketing messages with the target market before putting them into production and spending money on awareness advertising campaigns. It’s a crucial step in any business growth plan that if ignored, can have drastic consequences.
2. Create and Test Your Growth Plan
Assuming that you have now completed the relevant market research and carried out consumer testing, you will be in a position to create a solid business growth plan. This should include financial information such as the size of the market, how much market share you propose to take, any budgets you may set out for market, advertising and product development and staffing and competitor analysis.
A plan is also crucial in terms of understanding how the business will grow in terms of employees, the structure and the legal entity it may need to become. Will it need to move from being a privately-owned business to seeking investment from different funding rounds, or will it be listed on the stock exchange? Without this information it will be difficult for you to understand the direction of travel and the steps you need to take to be successful.
3. Get the Right Funding
Right out of your new business growth plan will come projections for your budgets. Depending on how aggressively and how quickly you want the business to grow, this will more than likely require you to find some sort of funding. One common source of funding is from existing shareholders, but there are other options that you may be interested to explore.
Many technology companies go through a number of rounds of funding. There are many investors who are looking for small tech start-ups to invest in in the hope that they will grow significantly and that they can cash out when the company submits an IPO. Banks are another funding source to be considered as are grants and selling shares to larger companies.
4. Define a Company Structure
It’s highly likely that as the company grows more employees will be brought on board. Before this happens, it is vital to understand what your new company structure will be. Trying to work this out as you go along is a sure-fire way to annoy employees and leave people confused about their responsibilities and who they report to.
If you are the business owner or co-owner then you will also need to decide if your role will change once the company has secured funding and grown to the size set out in your growth plan. It may be that you are looking to spend less time on the business or will be looking to sell your shares. Planning your own exit strategy is just as important as defining the structure of the business.
5. Get Your Legal Requirements Sorted
Having a lawyer on board or one that you can turn to is probably a good idea when you are planning substantial growth. They will be able to advise you on different aspects and a good lawyer will have experience of doing this with other businesses that are similar to yours. Employment contracts and contracts with customers and suppliers will all benefit from being looked over by a professional lawyer.
You may also need to research any specific requirements there are within your industry. This is particularly relevant if you plan on creating new products or selling into new markets. Any regulations should have been identified in the planning stage using a model like PESTLE and a lawyer will be able to advise you on how to meet any new legal requirements.
6. Hire the Right Employees
It is so important that you hire the right employees that are invested in helping your business grow. They must be enthusiastic and willing to work hard but you must also be a leader and develop excellent management skills. Knowing the average salaries for the positions you are hiring for and having a dedicated hiring manager will help you to get the best people for the job.
One of the great things about start-ups and businesses that are pursuing growth is that they are flexible and agile. You may find that your team needs to be updated on industry standards or need further qualifications. Investing in your employees and helping them to progress professionally by paying for online courses relevant to their jobs like an online statistics degree that will help them to stand out within that particular niche due to the vast knowledge and skills they will take away from the degree. You will ensure that you have the best data analysts by your side when it comes to forecasting your future from the data results.
7. Ensure You Have the Workspace
With new employees come more requirements for space. If you have not yet expanded and are looking for office spaces then it is best to find somewhere that you think will last you for a few years and not just for a few months. Your plan will tell you what your projections are for taking on new staff which will help you to define the size of office or production space you will need.
There is nothing more disruptive than moving office and you want to try and keep this to a minimum while you are in growth mode. Any loss in productivity can put you behind on your plan and it can be difficult to catch up. Another option you may consider is letting employees work remotely.
8. Invest in the Right Systems and Equipment
Investing in the right systems and equipment can mean anything from buying more desks, chairs, and computers to buying more hosting capacity for your website. Having a view on where this investment needs to be made will help you to allocate budgets and will give you a clearer view on cash flow and profitability.
The systems that you may want to look at might be CRM systems or email automation systems for marketing. You may also need to increase the security you have to meet security compliance and data handling requirements. You might also need to review processes like dispatching goods and dealing with customer inquiries if you think these will increase significantly as part of your growth plan.
9. Review your Suppliers
One key question to ask yourself is if you think your suppliers will be able to keep up with the new demand you will be placing on them. If you are reliant on raw materials or components from different suppliers that make up the final product that you sell, will these be available in the quantities that you need them once you start to grow and sell more?
An audit of your suppliers will help you to understand if they are still suitable for moving forward. If not, you will need to start searching for new suppliers and include this in your plan. There could be changes in pricing and delivery times which again could impact on the service you offer to your customers. If you are sticking with your suppliers then you should let them know that your orders will be increasing so that they have time to prepare and meet your demands.
Building a Growth Plan
Building a growth plan for a business isn’t easy, and it takes a lot of time and research to get right. Despite this, planning is one of the best ways to give yourself the maximum chance of success and will put you in a great position to gain investment and hire new employees.
This list covers 9 different points that are useful to consider when putting a growth plan together. There are likely to be many more points that need to be considered, especially across different industries and vertical markets. However, these points provide a good starting point and will get you in the frame of mind to start seriously considering all the factors that make up a solid growth plan.