Stage 6 – Growth
Business growth involves the expansion of markets and products or services to grow the existing business. Business growth can be achieved through a number of initiatives, including innovation, investment, collaboration, acquisition and market expansion.
Areas of consideration include:
- Scale production.
- Establishing after market support.
- Customer retention plans.
- Export, market expansion.
- Strategic plans.
- Investor ready.
- Establishing a SWOT process.
- Product life-cycle, innovation.
- Profit investment.
Questions to consider include:
- Do you clearly understand what new business capabilities are needed to fuel the growth or your business?
- Have you identified and assessed other businesses that you can partner or merge with or acquire in order to access the capabilities you need?
- Have you assessed the costs and risks associated with mergers and acquisitions?
- Have you identified and assessed new markets for your products and/or services?
- Have you assessed the costs and risks associated with doing business abroad?
- Do you have systems in place to influence the continuous improvement of the business, and continued quality of the services or products that are being produced for the market?
- Do you have the systems in place to promote research and development, information communication technology and to manage finances and inventory etc?
- Are these systems capable of managing rapid growth and change?
- Have you developed processes to successfully manage change?
- Have you established a culture within the business which encourages staff to embrace rather than hinder change?
- How will you clearly and regularly communicate the progress of change to staff?
- How will you encourage staff to report difficulties emerging due to changes and to resolve these problems at a local level?
- How will you celebrate the completion of stages or the reaching of milestones and remunerate staff for their good work?
- To harvest the wealth from the business growth, will you sell the business or stay with it and access some of the financial rewards?
Innovation’ in a business context means implementing a novel product or way of doing something that creates value in the market. Hundreds of surveys show that firms that innovate outperform firms that don’t. For example, in its 2009 innovation survey, the Boston Consulting Group reported that the total shareholder returns of innovators were an additional 4.3% above their peers.
Yet the statistics show that almost two-thirds of firms in Australia don’t innovate, or at least, don’t think that they are innovating. Either way, it’s clear that if firms either knew they were innovating, or how to innovate, they could perhaps better capture the benefits that follow.
Commercialisation is intrinsic to business innovation, as it is the step that converts a novel idea into the product or service that renders value.
The following is a practicle guide to achieve this:
Set yourself some goals, actions and deliverables:
Goals – These should communicate the desired outcome you are trying to achieve at this stage
- Scale up manufacture to maximise production.
- Establish market retention and expansion strategy.
- Monitor product life-cycle, review product iterations and establish new product development.
- Investigate profit investment.
- Develop strategies for exit and or mergers and acquisitions.
Actions – What needs to be done to realise your goals
- Conduct an audit of your Intellectual Property assets and determine opportunities for improvement (product iterations) and new product development (innovation).
Sales and Marketing
- Review marketing strategy, further market expansion, product positioning.
- Review marketing plan.
- Develop customer ‘Recruitment/Retention/Reward/Recognition’ plan.
- Audit operational capabilities – in-house if internal development, contract manufacturer if external.
- From audit results, develop operational plan to maximise and or expand production capabilities.
- Identify potential partnerships to help with expanding workload.
- Identify opportunities for improvement (innovation).
- Understand standards and regulations of new markets eg. CE Mark (Europe), FDA (USA).
- Develop a plan to ensure products, packaging, labelling and related documentation (instruction leaflet etc.) meet criteria (approval) of standards and regulations for market expansion.
- Develop and encourage an innovative team environment.
Business and Finance
- Determine optimal growth strategy (merger, acquisition etc).
- Review opportunities for collaborations – building alliances and linkages.
- Revise exit strategy options.
- Forecast additional revenue required for growth.
- Forecast additional expenditure required for growth.
- Identify potential funding sources.
- Review investment strategies including – borrowings, IPO.
Deliverables – Outcomes of your actions
- IP audit results.
- Innovation strategy.
- New product development pipeline.
Sales and Marketing
- Revised marketing strategy to include further market expansion and product positioning.
- Revised marketing plan.
- Customer ‘Recruitment/Retention/Reward/Recognition’ plan.
- Documented operational capability audit results.
- Operational plan.
- Potential partners identified and contacted (contracts in place or under review).
- Opportunities for improvement documented and implementation plan complete.
- Quality team has developed understanding and expertise in compliance with laws, standards and regulations for the markets of interest (for market expansion).
- Quality plan regarding compliance with laws, standards and regulations for market expansion complete (including review of products, packaging, labelling and associated documentation).
- Action plan for innovative team environment documented and implemented.
Business and Finance
- Growth strategy documented and plan complete.
- Opportunities for collaborations documented and contacts made.
- Revised exit strategy.
- Revenue forecast.
- Capital Expenditure.
- Funding sources documented and strategy in place.
- Investment plan.
Below are some tips to help keep you on track:
- Audit your intellectual property assets.
- Review marketing and business plans.
- Identify partnerships to help with the expanding workload.
- Identify and assess new markets.
- Review your marketing strategy.
- Forecast the additional revenue and expenditure associated with growth.
- Encourage and support an innovative team environment.
- Determine optimal growth strategies for your business.
- Identify financial sources to fund the growth.