How to grow your business
Read time: 10 mins Added: 23/05/2023
It’s important to plan your growth strategy with care. If your business is slow to change – for example, by not keeping pace with customer needs – it may fail. Yet, if you change too fast, you risk spreading your resources too thin and reducing quality.
To grow a resilient business that’s around for the long term, you must plan for sustainable growth. That means understanding the current situation and having a vision for the future. Only then can you plot a course to get there.
- new markets
- regulatory changes
- financial controls
- support mechanisms
You may then unearth an insight into a marketplace advantage or area for improvement that could help you formulate your growth plan.
A gap analysis is another useful process. This involves looking at where your business is now, where it wants to be and how to bridge these two states.
Write a business plan for growth
Creating a business plan and reviewing it regularly is vital to understanding how your business is operating. It can provide the backbone of your growth and help you to:
- objectively assess where your business is going
- produce a clear action plan with a strong sense of direction including deadlines and desired outcomes
- set out the upfront costs and investment required to achieve your goals
- spot any issues with cash flow, capital requirements, staffing or supply chain
- identify where investment in sustainability initiatives could reduce costs
- provide a clear action plan with directions, desired outcomes, deadlines and measurement criteria
- persuade financial backers that you understand your business and can meet customer needs
You should update your plan according to your business’s changing needs. And regularly check figures against performance to keep growth on track.
Write a marketing plan for growth
This should complement your business plan and show how you will achieve and maintain growth, whether that’s by winning more business from current customers and/or attracting new ones.
Start with your customers:
- Who they are, where they are and how they buy from you
- What they want from your product/service
- Why they choose you – this is your unique selling point
- Which distribution channels work best for your customers and your business - direct, online or through third parties?
- How much, when and at what price will customers buy? Should you focus on a few high-paying prospects or a broader market with lower budgets? This will help you optimise your pricing.
- Should you encourage repeat business through incentives – or attract new customers?
- Which promotional channels and techniques work best to target your customers? This will help to determine your marketing channels and budget.
Assess your resources and capacity
Your marketing plan will show the quantities of goods and services you need to produce in order to reach your targets. For some businesses, scaling up requires investment in physical assets such as specific products or raw materials. You should regularly review your projected needs in the short, medium and long term and plan your investment accordingly.
Can your existing suppliers deliver the right quality, credit terms and guarantees? Can they scale up to meet your production and delivery demands? Can they support your sustainability initiatives? Tell your suppliers about your plans so they’re prepared for the increased demand.
If demand is irregular or seasonal, you should track the peaks and troughs over a period of time to identify any patterns. There may be new opportunities when you are under capacity, or you could take on extra resource for busy periods.
Your financial forecast
If your business grows quickly, cash may leave faster as costs rise.
Cash flow is the key to managing growth, so you should work out the maximum amount of sales growth you can reach without running out.
That way, you can ground your growth strategy in what’s genuinely achievable.
Have you saved any profits to invest? If not, you may have to borrow to fund new equipment and premises, which will increase costs.
Consider the impact of taking on debt on your finances and cash flow over both the short and long term. Remember also that lenders will want to see clear expansion plans, achievable targets and the ability to pay them back.
Embrace Net Zero
The UK government has committed to achieving Net Zero by 2050. However, this is not just a set of restrictions. By embracing environmental sustainability, you can prepare for the changes and opportunities ahead.
For example, investing in electric vehicles could help your business avoid clean air zone charges, and implementing a recycling policy could reduce the cost of managing waste. Making greener business decisions now could reduce the costs of meeting requirements in the longer term.
You can find out more about Net Zero and how Lloyds Bank can support you on our Sustainability Hub.