Growth is fundamental to the survival of a business. Approximately, 66% of businesses survive their first two years in operation, about half of them make it to the five-year mark, and merely 33% of them could only celebrate their tenth anniversary. These numbers seem to be highly consistent across most industries-however, they also highlight the significant fact of how important it is to plan your business growth from day one.
A definitive and solid growth strategy is much more than a simple marketing strategy. One can consider it to be a crucial cog in their business machine. Without the existence of one, you would be simply at the mercy of a fickle consumer base and increasing market fluctuations.
So, how do you plan to pick the right growth goal for your business?
How To Set Right Growth Goals For Business You Can Achieve This Year?
Setting growth goals is the first step to getting what you want from your business. They offer your work a sense of purpose and help you focus your limited time and energy on what’s more important. It helps you move forward and sets the stage for ongoing success. Also read – Calculators to Deepen Students’ Engagement
If you have the wrong business goals in place (or worst-no goals at all), you would never have a lucid idea of what you’re trying to accomplish. As a consequence, you would remain half-hearted in your efforts.
So what kind of business growth goals should you be setting this year? Here are certain crucial aspects you need to consider-
- Begin By Identifying Your High-Level Business Goals
As humans, we always intend to start all our journeys at the beginning. But, the journey to business growth functions differently. It’s always more helpful to start at the end and then work backward. If you could know for sure how much revenue your business would make in the long-run before even starting the venture, would that not help figure out the best growth strategy to get there?
Most successful companies around the world do this, and all of them have different terms to refer to these high-level and ambitious goals. Brian Balfour takes a more practical approach and refers to setting these ambitious goals as using the Top-Down Approach to inform the growth models of your business.
But the point is, you need to start by chalking out a long-term goal, like your 12-year goal. Determine- “How much should your business grow by that time? Where do you see yourself and the company in 12 years? How much revenue do you expect to generate?”
By working backward, it becomes easier to set the right and realistic growth goal of your business successfully.
- Understand What You Are Trying To Grow
“What are the variables one needs to know before setting the growth goals of a business?”- This question often seems to be trending on business assignment help forums. Now, let us tell you, mostly reputed businesses around the world set their growth goals around one of these variables-
- Revenue (sales, net profit, average contract value, total recurring revenue, etc.)
- Subscriptions (annual or monthly recurring revenue, etc.)
- Units (customer base, total units sold, follower count, etc.)
The kind of business growth goal you select generally has a huge impact on how you approach business growth. Suppose, if you are running a SaaS business and your primary objective is to double the user base, you can provide free trials or free plans to earn more users. On the flip side, if your aim is to increase the revenue, you should focus on getting free customers to paying or paying customers to upgrade their subscriptions. This would improve your overall revenue, however, the size of your customer base may not increase or even decrease.
This is the main reason why picking the right goal at the right time is crucial. Remember, that your business growth goals need to match where your business is at and what it requires to succeed in the near future.
- Focus On How Much You Want To Grow
This is where things begin to get interesting. Once you are done identifying all the vital aspects of your business you want to focus on, it becomes crucial to determine what kind of growth level you are shooting for.
Based on your business and niche your growth goals can vary a bit. However, there are certain general thumb rules you can use to determine the perfect growth goals for your business-
- Hypergrowth
If you have been to Silicon Valley once in your life, you would be well-versed with the term ‘hypergrowth’. For most new businesses, 2X, 3X, or even 4X growth is their aim. They aim to disrupt their niche wholly, dominate the competition, and reign supreme in the market.
Undoubtedly that’s a brilliant goal but turns out to be fairly unsustainable generally for most businesses. Unless your service or products are truly groundbreaking, achieving this sort of growth is highly impossible. It’s like trying to catch lightning in a bottle, thus we strongly advise choosing a more achievable goal.
- Rapid Growth
For most companies, rapid growth is a reasonable goal only up to around their second or third year in the business. Thus, if your company has a sterling reputation and is fairly well-established, making efforts to double your revenue perhaps would not be the best growth goal.
- Steady Growth
Now, for most businesses, a steady growth rate of about 50-75% is perhaps a realistic goal. This turns out to be true if you are part of a younger business that is selling ample products through online marketing.
- Mature Growth
Once a business becomes older than 7 years, they become well-established and may have earned a good place in the market. Unless that market is experiencing rapid growth, 10-25% year-over-year growth is a quite solid goal
Today Facebook is ubiquitous. But back in 2004 when it was launched, MySpace was the most dominant social media site at that time. So how did Facebook took over the market?
It began in the Harvard dorm room of Mark Zuckerberg and consequently the customer base was established among Harvard students. After it spread to other colleges, it opened up to non-students. Further, its measured expansion allowed the company to adjust the product to the needs of each new customer. As a consequence, it refrained from the growth challenges that led to the failure of MySpace.
- Amazon
In 1995 began the retail dominance of Amazon. Even though back then consumers were not used to purchasing products online, Amazon earned billions of dollars in annual sales. What led to its growth? The answer simply lies in the diversification strategy.
It began by offering customers a larger selection of books that were only available in brick-and-mortar stores. Also, customers could check the site to know right away if a book was in stock. It then expanded into adjacent markets like DVD and electronic sales. Now, it has spread into even groceries and healthcare.
Google began initially as a B2C company offering search engine. However, it required a source of revenue. To accomplish that, it changed from B2C to a B2B (business-to-business). But, it ensured that its new AdWords product fit into the experience of the B2C product seamlessly. It had to safeguard the speed of the search engine, so it offered text ads. These loaded quickly and guaranteed that the consumer experience was not degraded by advertising.
- Dollar Shave Club
Back in 2012, when Dollar Shave Club launched its business, it had a commanding share of about 70% of the US market. As per a CNBC report, its market share has now eroded to about 53%. Meanwhile, this growth prompted Unilever to purchase it for $1 billion. The key to the success of Dollar Shave lies in the fact that it could offer a lower-priced alternative to the leader by selling to the consumers directly. This represented a new market for razors at that time.
To Conclude,
There is no silver bullet or instant ‘hack’ that would lead to the explosive growth of a company. Growth is a long process and requires strong focus as well as an in-depth understanding of all metrics that influence the various moving parts of a business. Once you develop an idea of what aspect of your business you want to focus on or how much you aim to grow, all you need to do is figure out what it will take to accomplish that goal.
Break the necessary growth into chunks, determine the outstanding ways to grow in each essential area ,and measure your success. It may so happen that you might need to adjust your goals over time, but knowing what you are shooting for would efficiently set you up for long-term success in the future. Here’s wishing all the luck!
Author Bio Alley John is an eminent business consultant and part-time blogger, all the way from the USA. He loves to write, listen to vintage records, and remain awake at night thinking about new marketing strategies. A part of MyAssignmenthelp.com for 10+ years now, he is quite popular among students for his exemplary business assignment help services.