Planning your business's growth

There are many reasons why you may want to grow your business: to fulfill your professional goals, increase the value of your business, keep pace with the market or just reach a critical mass.

Whatever your motivation, you should think long and hard before deciding to grow. By planning your business's growth, you'll have better control over it and meet your objectives.

1. Determine how you want to grow your business.
2. Pursue the optimal strategy given your resources and objectives.

How will you grow your business?

You have 2 options:

• Increase your sales volume
• Boost your profit margin

Higher sales volume - smaller profit margin

To achieve growth by increasing your sales, you'll have to come up with a marketing plan that will do the following:

• Increase the size of your sales force
• Expand your distribution network
• Open up new markets (local or international)

A manufacturing company that decides to grow this way will have to adapt its operating structure and infrastructure for large-scale production.

Lower sales volume - bigger profit margin

To achieve growth by boosting your profit margin, you'll need to pursue a niche positioning strategy in keeping with your marketing plan. You will have less infrastructure than a company that aims to grow by increasing its sales, but you'll need to exert greater control over the existing parts, especially:

• the quality control system
• branding
• after-sales service
• warranties

Your growth strategy

Choosing the right growth strategy will help your business make the most of its resources and reach its market potential in order to grow quickly and soundly.

There are many ways to grow a business. The most common involve boosting sales in one of the ways described below.

Developing new products or services

Innovation entails conducting research and development (R&D) to create new products or services in the areas of customer service or product design. The goal is to sell new products in existing markets. Resources must be devoted to R&D in order to:

• adapt or transform existing products or develop new features of a particular product
• create new versions of products to offer differing levels of quality
• develop new models or products

Market penetration strategy

In an existing market, penetration means convincing potential customers to buy your products or services or getting existing customers to buy more. Efforts are therefore focused on pursuing a marketing plan that aims to:

• boost buying frequency
• increase the number of products purchased during each transaction
• poach the competition's customers
• turn potential customers into buyers

Market expansion strategy

This strategy consists of selling your product or service outside your local market. This means increasing sales of existing products by developing new distribution channels or opening up new geographic markets by implementing export strategies.

Diversification strategy

The diversification growth strategy aims to increase sales by opening up a new market by introducing a new product. This strategy is used when growth opportunities seem more attractive outside a business's current sector. A business that opts for this strategy needs to carefully assess its skill set and resources.

Use the Are you ready to go global? tool.

For help with your strategies, see the Desjardins interactive marketing plan.