Growth Strategy Thinking
Most SMEs (small to medium-sized enterprises) start with one thing in mind, and that is simply to prove they can survive. In other words, their focus – especially in the early months – is merely one of survival.
But, to actually expand their businesses, entrepreneurs need to adopt a different mindset – one of seeking actively to grow, rather than just to tick over from day to day.
In order to do so, it is sensible to put some ground rules in place and, moreover, to be honest with yourself when it comes to answering the questions they pose – this is ‘Growth Strategy Thinking’.
1. What’s your USP?
The first stage in distilling the concept of Growth Strategy Thinking is to identify what actually makes your organisation different from its competitors. In essence, you need to establish what your “value proposition” is – your “unique selling point” – in other words. And, once you have locked this down, whether it be your customer service, your product uniqueness, your location, your service quality, speed of supply or – perish the thought – your price, then put your marketing effort into building awareness around that proposition. Take a look at our article ‘Point of Difference‘ for more.
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2. Identify your Ideal Customer
Next, exercise your analytical expertise by profiling what your ideal customer looks like. Have a think about their age range, their gender (if you can differentiate this), their socio-economic classifications, their location, the sort of things they do for leisure, their job roles, and so on. Equally, are they a private corporation or a public sector organisation?
Once you have built that notional profile, you will be better able to predict how they will behave to any changes you may wish to make to your product or service, its price point, its design and positioning in the marketplace. Moreover, try to define how your organisational brand language ‘speaks’ to your customers. What is it that they ‘like’ about your business? What do your products and services say about them as consumers?
3. KPIs – The What and Why of Your Business
Once you have mapped out what makes you different and who you’re aiming your product or service at, define your KPIs. Your Key Performance Indicators (KPIs) are the bunch of statistics, data and information sets that map your business’s progress. These can be both financial and non-financial and are the pieces of information that enable you to keep the score on how your organisation is developing on a month-on-month basis.
Importantly, they are also the series of statistics that you can show to potential investors, to give them a flavour of why they might like to invest in your business.
Examples of business KPIs could include Turnover, Revenue Growth, Net or Gross Profit Margin, Sales Conversion Rates, Client Acquisition Costs, Market Share, Client Retention Rates, Website Inbound Channel Links and so on.
4. Verify Your Revenue Streams
As you continue your journey towards business maturity, you will need to be aware of the factors affecting your revenue. But, before you even consider these – usually afforded by examining your management accounts – you would be wise to identify where your revenue comes from. Not only will your individual products or services be revenue generators, but so potentially will after-sales, possibly including any credit or finance that you may choose to offer to customers or clients. Additionally, other ancillary products that you may wish to sell as ‘bolt-on’ items to the main sale could be regarded as further revenue streams.
5. Look to Your Competition
One thing to remember as you continue your journey towards strategic growth is that your competitors can – truly – be your friends.
Not only can they show you – in no uncertain terms – where you are going right and wrong, but they can also be your allies when it comes to marketing and legislation. Remember, it is unlikely that you will have discovered a brand new, hitherto untapped market, and that means in essence that there will already be some established players in the marketplace. So, analyse what they are doing, take what’s good and change what can be improved or developed.
Moreover, seek opportunities to work with your competition, potentially to develop consistent standards, as well as perhaps lobby local, regional and even national bodies for recognition.
6. Focus on Your Strengths
Remember, the key to success in any market is to have a defined offering. And that means it’s necessary to look towards your strengths to help differentiate you from the competition.
So, be analytical. Determine, dispassionately, what it is that you’re good at – then stick to it. Use it as your key asset. And be aware that, if there are certain things that you’re not too strong at, potentially look towards outsourcing these functions. That way, you don’t waste time worrying about the things you’ll never be able to compete on.
7. Invest In Talent
Finally, don’t try to be an expert in everything. Instead, use your own talents where they genuinely make a difference, whether that be in marketing, sales, accounting, production or product development.
And, once you’ve established which niche your skillsets lie in, then look to recruit to fill the gaps. Remember, there is an opportunity cost in trying to be something that you’re not, at the expense of ignoring where your own talents exist. So, be disciplined, stay honest with yourself and look to work with like-minded individuals who can complement your own uniqueness.
Working with a growth consultant to provide independent thinking and support can massively improve your chances of substantial growth – seek out support from experienced and established providers who can help your business.
Growth Strategy Thinking from Yorkshire Powerhouse
Now you’ve read our article on Growth Strategy Thinking – have you any more questions?
Here at Yorkshire Powerhouse, we’re happy to help as much as possible – is there anything else we can do to help you, do you have any further questions or can we help introduce you to an expert – please let us know:
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