Business owner — you have successfully grown your business, but it has become difficult to sustain that growth. Existing customers tap out on their needs, obtaining new customers in a competitive market is always difficult, and you are so integral to the business that your capacity to expand the business has become limited. These conditions can lead to stagnant revenues, which can result in reduced profits as your costs continue to rise.
Growth is hard. So now what?
You need to develop a comprehensive and well thought-out growth strategy. Growth can come from many places, including new customers, new products and services, new geographies or market segments, or increasing pricing on existing products or services. Ultimately, a successful growth strategy needs to answer the what, how, when and who.
What? You and your management team need to develop, analyze and rank the attractiveness of potential growth opportunities, including quantifying the market size, your potential revenues, and the necessary resources and time to implement each opportunity. In ranking the opportunities, it is critical to objectively assess the likelihood of success of each opportunity.
How? Before you jump into a new growth initiative, take the time with your team and advisers to write down specifically how the business will successfully achieve the growth plan. If the answer is to gain new customers, how will you identify the right players to pursue? How will you connect with the potential new customers? And how will you convince them that they should buy your product or service?
When? Don’t try to do everything at once. You need to prioritize which growth initiatives are most impactful and achievable, and then prioritize efforts based on that ranking. Diluted efforts across too many initiatives usually lead to mediocre results. Stick to your prioritization plan for which growth strategies to pursue first and then adjust as you evaluate the success of each initiative.
Who? Often the owner is the hub of a business, making most of the decisions and maintaining the relationships with many, if not all, of the key customers. In order to achieve the strategic growth plan, you will likely need to delegate more and bring in additional talent to timely and successfully achieve the growth plan. Perhaps you need to add an experienced sales leader to focus on gaining new customers or a manager to focus exclusively on a new market segment. It’s not easy to let go or to invest ahead of obtaining growth, but it is critical if you want to continue to drive growth in your business.
At Kirtland Capital Partners, our management teams use these strategies to grow their businesses. Our management team at PEScience (PES), a seller of nutritional supplements made with good science and good taste, has successfully implemented a strategic growth plan. As part of its strategic growth plan, the team prioritized expanding sales geographically to Canada. PES applied the necessary resources and successfully expanded the business in Canada, including increasing sales by 60 percent through new partnerships with distributors, adding sales and warehouse resources, and building a Canadian-focused website.
Strategic growth is possible. Take the time to develop the what, how, when and who, and then get after it.
Tom Littman is Managing Partner of Kirtland Capital Partners
