Developing a Strategy

All businesses should aim 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, has to be fostered and it is therefore important that you have a clear strategy in place.

As a business matures you should undertake regular reviews of the company's objectives and those of its controlling shareholders. If these objectives are in harmony and are focused to take account of the general business environment, then the chances of success will be greatly increased.

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 into North Africa, Europe or further afield 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 must plan which is the best for you. Think about your debt/equity ratio. Will growth be financed through a further issue of shares or should you be looking at alternative options?

Consider the tax implications, of any growth. You should also think about how you and your fellow directors will eventually exit from the company and realise your capital - this could impact on the manner in which you grow.

With growth, both the company's ability to influence the market place and the market's awareness of the company, accelerate. Market dominance enables companies that have become larger and more sophisticated, or that offer a real niche service or product, to pick and chose which contracts to accept. It also brings about a position of strength - the risk of losing a key contract is less serious because you are less reliant on any one customer.

However, once market dominance is achieved, be prepared to amend your growth strategy. While seeking to maintain your position you should also give consideration to diversification of product/service offering and to the integration of new developments within the current structure.

Finally, don't allow growth to detract you from the day to day running of the business. Make sure that you have internal controls in place to ensure that everything is running smoothly and to alert you if your objectives are not being achieved.