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Building the right business growth strategy isn’t a one-size-fits-all process. The best choices for one type of business — whether in construction, general services, retail, e-commerce, or another area — will vary significantly from the most effective strategies for another.
How should you grow your business? Consider factors like competitive advantages, customer needs and preferences, market position and potential, and operational capacity as well as your vision and goals. With those considerations in mind, follow these four steps to create a growth strategy tailored for your business.
- Examine your data. The information you have within your organization can give you important clues about the best growth paths. Review your sales data to find out what your customers are buying — and when they’re buying it. Seasonality drives some businesses, such as pool installers and landscaping companies. But even a retail or professional services business likely will have busy times during the year. This information, along with how long it typically takes you to make a sale to customers, can give you insight into periods when promoting your business can best drive growth. In addition, you may see periods when slower sales give you time to focus on operational improvements. Wells Fargo Business offers business software that can help you capture the data you need to spot these trends.While you’re doing research, take some time to explore who your competitors are and the services they’re offering. This may give you insight into gaps in the marketplace your business might fill. For example, a home renovation company may find new sales opportunities in up-and-coming real estate markets that don’t yet have much competition. A Wells Fargo Business Banker can be a helpful resource for any financing needed to implement the business’s growth strategy.
- Define clear goals. Once you have the data you need to understand your business’s sales and competition, you can turn your attention to its potential by setting specific, measurable goals. Think about your business’s broader mission, the level of growth you seek, and your risk tolerance, as well as your own vision and values.You might choose to measure growth in milestones like revenue targets, market share gains, or customer growth, depending on the type of business. For example, an e-commerce business may wish to acquire a certain number of new customers through improving its advertising conversions. Or an accounting firm may wish to grow by offering more services to existing customers, measuring growth in total customer value instead of new sales.
Such growth strategies can take a number of forms. The following are some of the paths you might take. And keep in mind, many businesses combine multiple strategic paths, depending on their goals.
- Sales growth: To grow by increasing the number of customers you have or the average transaction value from customers, consider increasing marketing, advertising, and other promotional activities. For example, a clothing boutique may invest in more local and social media advertising and an email newsletter to get more customers through the door.
- Channel expansion: You can also grow your business by increasing the ways people can purchase your products or services. A salon that has developed its own products may use
a line of credit to manufacture more of them to sell wholesale to other retailers, while a cleaning service may promote its services on marketplaces. - Market expansion: Adding markets or locations to increase business is another way to grow. A physician’s office may decide to take out a business loan to open a new location or acquire another practice to serve more patients.
- Strategic partnerships: Teaming up with another business to cross-promote and cross-sell can also help you grow your business. For example, a fitness studio and a healthy meal prep service may join together to create bundles that can be promoted to both businesses’ customers, who likely have similar interests in healthy lifestyles.
As you consider which path is right for your business, make an appointment to talk to a Wells Fargo Business Banker to help you select the products and solutions that can help support your growth strategy.
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- Put your plan into action. Now that you have a strategy backed by your research, it’s time to create, test, and refine a plan to put your growth strategy in place. First, list the steps you’ll need to take. For example, if you need to find a strategic partner, consider some possibilities and reach out to them. If you’ll need a line of credit to make new investments, begin making plans to apply for it. Make each step specific and small enough to be achievable. Next, organize the steps into a logical order that clearly outlines what needs to be done, resources needed, what you hope to achieve, and timelines. You might find it useful to use a spreadsheet or project management app.
As you outline your plan, keep in mind that factors like inflation, economic fluctuations, or other risks may affect business growth. So, build your cash reserves and revisit your goals regularly to be sure your business is on track to meet them. As you implement your plan, test your next steps, measure the results, and adapt based on what you’ve learned. If you’re growing faster or slower than anticipated, adjust your growth plan and expenses accordingly.
- Anticipate your business growth needs. As you design the right growth strategy for your business, be sure to look ahead, too. Facilitating growth may require new financial tools and resources — a business credit card, line of credit to cover short-term expenses, or a commercial loan or SBA loan to fund a major expansion, for example. For each step, ask: What financial resources will my business need? Then, turn to Wells Fargo Business as your growth partner. We provide the experience and expertise to grow with you, helping you build a solid financial foundation.
Make an appointment with a Wells Fargo Business Banker to help you choose the right products for your business at every stage of the growth journey.
