Here are some fairly harrowing statistics: Did you know that only half of all small businesses survive more than five years? It gets worse. Only one-third of those actually make it to 10 years.
But before anyone starts worrying, take a deep breath. Those grim data points aren’t meant to scare small business owners off. Instead, they’re the perfect reminder to never overlook the importance of building a clear, sustainable growth plan.
For a small business that wants to compete with the big guys, forward-looking focus on growth is critical. But if you’re like many entrepreneurs, you may never actually take the time to critically think about where you see yourself in the next year—and what you need to do to get there. In fact, only 49% of small business owners admitted to having a clearly-stated plan for business growth.
So, you know you should probably create a growth plan. But what is that exactly?
Put simply, it’s what helps your business get from Point A to Point B. It’s essentially a road map that guides you in the right direction. It’ll help you unlock opportunities for development, and make it easier to navigate or avoid common mistakes before they happen.
A growth plan could be anything from a rough, informal sketch to a full-blown, highly-detailed strategic plan, including everything from a mission statement to financial forecasts. Whatever route you choose, what's vital is getting everyone in your company on the same page and thinking about your future.
Are you ready to protect the future of your business? To build a growth plan that’s deliberate and beneficial for your own business, here are some of the key steps you need to follow.
Identify Your Target Customer
Imagine writing up a profile for your ideal customer. What would it say? Building out a complete picture of your dream customer gives you a clear idea of who you need to focus on reaching in the next year or two. That way, you aren’t wasting time chasing after people who probably have zero interest in your product.
How do you build this persona? Start by asking yourself a few questions:
Define what your product can do for a customer
What problems does your product solve for your customer? How does your product improve your customer's life or work? What benefits of your product are most important to your customer?
Define the customer you want to sell to
What is his or her age, education, occupation or business? What is their income or financial situation? Where do they live?
Determine exactly when your ideal customer buys your product or service
What has to happen in the life of your customer for him or her to buy your product? What time of year, season, month or week does your customer typically buy?
Know What Sets You Apart From Your Competitors
In its simplest terms, a value proposition is a positioning statement that explains what benefit you provide and how you do it distinctly better than anyone else. It’s a vital part of your growth plan, as it gives you, your team, investors, and every single potential customer confidence that you’re the right person for the job.
To build out your own value proposition, start by jotting down answers to these core questions. They’ll help you build a core purpose that’ll drive everything you do.
- What benefits does your product offer?
- What makes these benefits valuable?
- What problem does your product solve?
- Why should a customer pick your product over a competitor?
Establish Your Primary Objectives
One of the things that derail growth most often is too many goals and objectives—or absolutely none at all. Without attainable goals, it’s hard to move forward, make progress, and avoid feelings of complacency. It's also common to experience burnout and feelings of frustration if you're not being proactive about your business development. Setting goals and working toward them on a regular basis can help you keep your small business (and your passion) alive.
Not sure where to start? Here’s one popular small business goal that’s realistic and makes you feel like a hero when you check it off your list: improve your bottom line by the end of the quarter. The best part? There are multiple ways to get the job done.
How to Improve Your Bottom Line by The End of The Quarter
This sounds like a scary one, but it doesn’t have to be. Improving your bottom line usually requires two approaches: Selling more or reducing expenses.
If your goal is to boost sales during the next quarter, there are a few things you can start doing right now to move the needle:
Provide value with discounts and coupons
The phrase “spend money to make money” couldn’t be truer. Make your customers an offer they simply can’t refuse through coupons and discounts to encourage future business. Coupons are especially effective for new customers who are on the fence about purchasing from you. Or, consider giving them a little push to buy by providing a limited-time incentive. This strategy may sound like you’re making less money on one sale, but just wait until those customers keep coming back.
Use social media to target your consumers:
Nearly 57% of people who follow you on social media are more likely to buy from you than someone who doesn’t. And overall, people are 71% more likely to buy from a brand after a positive experience on social media. Those numbers alone prove your brand should capitalize on the power of social to drive small business sales. But instead of throwing content onto the noisy digital landscape, you have an advantage—you already went through the exercise of defining your target consumer. So why not talk to them directly?
Facebook has tons of courses that’ll walk you through how to reach the right customer at the right time through targeted advertising.
If your method to improve your bottom line is to cut operating costs, you have a few ways to accomplish that goal, too.
Lower your office space costs
Renting an office space isn’t cheap. In fact, a typical office layout can cost you as much as $6,000 a month. To mitigate those costs, ask yourself if the same job could be done from home. You could even look into coworking spaces—their flexible leases and approachable costs are ideal for a lot of small businesses.
Use social media
You read that right—the same tip to help you make more money is a great way to cut back on expenses, too. Marketing can be a large expense for a small business owner. Fortunately, you have a platform right in front of you that’ll let you reach hundreds of people, easily. There are a ton of resources out there that’ll help you get started with marketing your business on Facebook, Instagram, Pinterest, Twitter, LinkedIn, or YouTube.
Determine Which KPIs Matter Most
Before you can start determining your business’s overall growth and health, it’s important to determine how you’re actually measuring those things. That’s where KPIs, or key performance indicators, come into play—they’re specific, measurable values that indicate how well, or poorly, your business is achieving its goals. By honing in on your business’s KPIs, you can more effectively track each quarter, and chart your progress using consistent metrics.
Your KPIs are specific to your industry and your goals. But the most important thing to know is that your profits and losses are just one part of a much bigger story. For instance, a KPI could be related to your goal of increasing sales, improving the return on investment of your marketing efforts, or improving customer service.
Here are a few common small business KPIs to help you get started:
- Monthly newsletter signups
- Deals finalized by your sales team
- New leads generated
- New customers per month
- Debt-to-equity ratio
- Organic search traffic
- Social engagement and growth
- Revenue growth rates
Check On Your Revenue Streams
This is where you take a hard look at your existing revenue streams. How much are you bringing in? Is it sustainable in the long run? And where does it need to be to help you meet your primary objectives and your KPIs? If you find you’re coming up short, this is an opportunity to outline exactly what needs to happen to bring in more cash.
If this is one area of concern for your small business, here are a couple of ways you can build additional revenue streams into your long-term growth plan.
Start selling online and expand your customer base
You can quickly transform your small business from local to national and from national to global. Your options are nearly limitless. Websites like Squarespace, Weebly or even Etsy make it easy to go beyond the brick-and-mortar storefront so you can reach more customers than ever before.
If the idea of organizing all of this on paper seems daunting, there are online providers that help you generate business plans by making you focus on answering a few questions. They, then, do all the work of putting it together in a polished final product.
Ask customers what they want from you
If you’re in need of fresh ideas to spark new sales, you can use your current customers’ feedback to tell you what they want from your company in the future. You can head to your business’s Facebook page to solicit honest feedback from customers through pointed calls-to-action, or even consider sending out a survey to your contacts through programs like SurveyMonkey.