Last week, we defined what business growth planning is, its importance, the elements of a business plan and types of growths as well as business growth strategies. Today, we will take up how to plan for growth in your business.
Growth is holistic: Whilst what we have been discussing is generally about overall corporate growth, there are also functional growths. For instance, a growth plan could be limited to a specific function, such as marketing or production. This is possible when one function has to ‘catch up’ with another, or one functional growth could just serve as the ‘driver’ for an overall desired corporate growth to be achieved. Just like in living organisms, growth in a business is also holistic. This means planning for growth in a business must take all the factors associated with the business into consideration. For instance, any plan to quadruple your sales and triple your profitability in five years would influence and be influenced by your production capacity, staff strength, increase in working capital requirements, etc. So, even when you plan for growth in a specific business function, like production, you have to take into account the impact of the increase in your production capacity on your marketing, finance, human resource management, etc.
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Business growth planning: As mentioned earlier, there are different stages and types of growth. Regardless of the type of the growth scope and strategy, the plan development processes are the same. They include:
• Establish where you are: The first thing to do in growth planning is to establish where you currently are. This includes evincing your current production capacity, sales volume and revenue, staff strength, current assets and specifically working capital capacity, etc.
• Assess the opportunities you have: Whatever growth objectives you want to achieve cannot be decided blindly. Rather, you will need to assess the opportunities that you can seize as well as the challenges that you may be facing. Opportunities might be in the market with your existing products to existing customers. It could be with existing products to new customers. Similarly, there could be opportunities that could be derived from your ‘excess’ production capacity or simply from your massive cash holdings. Other than opportunities, sometimes growth can be achieved just by addressing challenges! For instance, you may already have a lot of room for growth in your existing market but are constrained by insufficient working capital. In such a situation, addressing your working capital constraints can springboard you to desirable growth targets. But even in such situations, your planning must remain holistic.
Establishing opportunities available to you is fundamental to your growth planning process.
• Establish your growth objectives: At this stage, you define what goals you want to achieve at clearly defined milestones. Your goals should be ‘SMART’ as in ‘specific’, ‘measurable’, ‘achievable’, ‘relevant’ and ‘time-bound’. A growth target must be backed by several metrics that can be measured along timelines. A target might be, for instance, to quadruple your sales and triple your profitability in five years, as mentioned earlier. All other metrics that support the achievement of these objectives, such as a specific increase in number of staff and increase in working capital, must also be established.
• Identify and provide required resources: For the target you aspire to achieve, you have to identify if you already have the required resources. If you do not, you have to plan to have them provided. Resources might include additional working capital and a number of sales staff, as mentioned previously. Whatever the additional and required resources, you have to plan to provide them when they are needed.
• Assign responsibilities: After establishing what your targets are, you have to assign the people and units that will be responsible for which actions and which targets within the time windows set. The responsible individuals and units should be clear of what is expected of them, when and, perhaps, how. They should also be provided the resources they require as mentioned earlier.
• Set clear timelines and action plans: For each growth target you wish to achieve, you will need to identify which actions are necessary to be carried out, at what time and by whom.
• Stakeholders meeting: All stakeholders should be involved in agreeing the with targets to aspire for. Once such goals are agreed upon and resources provided, a regular stakeholder meeting should periodically hold. The idea is to ensure that you remain on track and any issues and problems are addressed as they arise. These meetings will be about the rigorous supervision of implementation and adjustments wherever and whenever necessary.
• Watch out for pitfalls: Working towards your growth targets will not be easy. There may be issues of resource constraints, perhaps human capital challenges, economic downturns, etc. Whatever the challenges, you have to be able to rework and adjust your plans and implementation while remaining focussed on your targets. Sometimes, however, situations might necessitate changes and amendments in targets. This can be both desirable and legitimate.
As a consultant, I have always used the criteria of room for growth to advise on which businesses entrepreneurs should get into and which to avoid. Businesses without room for growth will not be interesting over the long run for most entrepreneurs. With this, we conclude on this series and next week we will take up Start Selling, Keep Selling.
