Developing a Strategy

Deciding to grow is the easy bit, how to go about it is the more difficult part. All companies should be aiming to achieve some form of growth, not only to increase shareholder value, but also because a dynamic environment is a primary motivator for attracting the best people to become involved with the business.

Growth, however, needs to be fostered and it is therefore important that you have a clear strategy in place.

Do you plan to grow by expanding your client base? If so you need to look at your marketing strategy. What is your target market? How much growth can this give you? Do you need to diversify your product/service offering?
Perhaps you are planning to grow through acquisition or merger? Acquiring a business can often be the best way of achieving rapid growth. However, any acquisition must be aimed at producing real growth in value and you will need to ensure that the new business fits comfortably with your existing enterprise if you are to achieve maximum benefit.

Expansion abroad should also be considered.

Any growth, be it organic or through acquisition or merger, will require funding. There are a number of finance options available and you will need to plan which is the best for you. It is essential that the financial structures of a growing business are appropriate not only to the needs of that business but also to those of the owner-manager.

Do you want to finance growth through bank lending, asset-based finance, equity capital or even by going public? How much control do you want to keep over your business? Are you happy to relinquish what you hold on the basis that 45 per cent of a large successful company is better than 100 per cent of a much smaller concern?

Consider the tax implications of any growth, and how you will eventually exit from the business and realise your capital; this could impact on the manner in which you grow.

Finally, you need to translate your chosen strategy into specific objectives to be reflected in your business plan and set up the right control systems to make sure that daily practices are aligned with and support your business objectives.

As the business matures, regularly review your strategy to take into account changes in the company and the business environment - growth brings about change, and when this change is in harmony with your plans for the future the chances of success will be greatly increased.