You know that the statistics are grim when it comes to successfully starting a new business. About 65% of companies fail within the first 10 years and 30% shut their doors within the first two years. Even businesses that survive for the long haul have some obstacles to overcome. Many companies that start out small stay that way, experiencing little or no growth over the course of their existence.
If you want your business to grow, you need to make a plan for that growth, as it doesn’t just happen by chance. Deciding on a growth strategy is part of the process of expanding your company.
Identify Your USP and Your Customers
The first thing to do if you want to grow your business is to develop a thorough understanding of what your business is and who it serves. Your company should have a unique selling point or USP. What is it that makes your business different from the rest, even different from companies that do something similar?
After identifying your USP, think about who your customers are, or who you’d like them to be. Ask if you’re meeting the needs of the customers or if there’s something you can do to better serve them.
Choose a Growth Strategy
You know what makes your business unique and who you serve. Now it’s time to focus on how you’ll expand your company. There are several strategies you can use to grow. One strategy is to focus on your current market penetration. Think of the ways you can maximize your current market share, without necessarily adding new products or increasing your customer base. You might increase your prices or start selling larger portions of your product. For example, you can introduce a multi-pack of products or start selling bigger product sizes.
Another growth strategy focuses on developing your market. You can do this by opening a new location in a different state or city or by introducing a spin-off product or service that targets a slightly different demographic. Similarly, you can focus on your current customer base but introduce new products to offer them.
A hybrid growth strategy might see you focusing on increasing your product offering and customer base.
You might also decide to grow your business by acquiring other companies. One option is to merge your business with a similar one or to buy out a company that sells a complementary product or service.
Make a List of Goals
Knowing why you want to grow your business can help you keep on track. Your growth plan should include a list of goals, particularly financial goals. Break the goals down by quarter and year. For example, you might want to increase your profits by 5% between Q2 and Q3. Between Q2 of the current year and Q2 of next year, you might want to increase profits by 25%.
Map Out Your Company’s Finances
Along with setting goals for your company’s finances, it’s smart to have an idea of where your business stands financially. A virtual CFO can provide a considerable amount of assistance here. They can help you make sense of your company’s earnings and expenditures and can help you locate sources of financing, such as loans or investor funding.
Account for Staffing Needs
As your company grows, your team will most likely need to grow. Make a plan for adding to your team. Consider the roles you want to hire for and those that you want to outsource. For example, working with an outsourced CFO and other outsourced C-suite-level executives can be financially savvy. You can tap into the expertise and knowledge of your vCFO without having to hire them full-time.
Another part of making a staffing plan is understanding where your company needs the most help. You might bring certain skills to the table but might not have others. For example, you may need to hire someone who’s adept at customer service or someone who has excellent managerial skills.
You need a plan if you want your business to grow. The team at New Direction Capital can help. To learn more about the benefits of working with a virtual CFO, contact us today.
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