Growth is an important part of a company’s development. Without growth, there is a risk that the company will lose both competitiveness and value in the long run. At the same time, growth needs to take place in a well-thought-out and controlled manner, so that it contributes to profitability and stable liquidity. Of course, how actively a company invests in growth can vary, both between different companies and over time.
This summary is about how companies can plan, implement and follow up on profitable growth. Growth can occur organically through more customers, new products, higher prices or establishment in new markets, but also through acquisitions.
1. Business plan, strategy and vision
Growth requires clear goals, a well-thought-out strategy and a long-term vision. The company should know:
- Where it wants to be in 5 years
- How to achieve its goals and measure success
- What strengths, weaknesses, opportunities and threats exist
- How the plan will be followed up and revised
A business plan is often supplemented with a multi-year budget to create credibility and a basis for funding. Being able to clearly explain the vision, strategy and goals to employees and partners is an important key to success.
2. Organic growth
In some companies, the conquest of new customer segments, market and business areas may seemingly happen by chance over time, but companies that actively and purposefully work towards new conquests have faster and more stable growth. Continuous improvement, the will to develop and the courage to take on new challenges are crucial.
- Develop existing products/services
- Develop new products/services
- Expand the geographical market area
- Develop new sales channels
- The right pricing and good marketing
3. Growth through acquisitions
Buying an existing business can be a quick way to grow. Key areas to analyze are:
- Company value
- Financing
- Staff and key personnel
- Customer base and suppliers
- Risks, taxes and legal issues
In larger corporate transactions, a so-called Due Diligence is often used, where the business is carefully reviewed before purchase.
4. Success factors for the entrepreneur
Success is not based on luck but on personal qualities and prerequisites such as:
- Work capacity and endurance
- Self-discipline
- Planning and organizational skills
- Motivation
- Patience
- Professional competence
- Health
- Experience
- Self-awareness
- Social skills
- Creativity and problem-solving skills
Strong support from family and network is also important.
5. Finances and resources
Growth requires capital because increased sales volumes tie up money in inventory, production and customer receivables.
Key economic principles:
- Growth must be profitable
- Good liquidity is crucial
- Strong profitability and equity facilitate external financing
- Financing can be provided through, for example, bank loans, leasing, factoring and investors
- Increased indebtedness can accelerate growth, but also increases risk
The entrepreneur’s private finances should always be taken into account.
6. Profitability and quality
Growth should be combined with:
- Good profitability
- High quality
- Efficiency
Profitability is measured through calculations and accounting, while quality can be followed up through customer complaints, warranty claims and customer satisfaction measurements. Good delivery reliability is an important quality factor.
7. Production process and efficiency
Efficient operations create capacity for growth.
Key focus areas:
- Eliminate bottlenecks
- Optimize inventory and purchasing
- Shorten production times
- Invest in the right equipment and automation
- Ensure the right staffing and skills
The goal is to use the company’s resources as efficiently as possible.
8. Marketing
The marketing is based on the classic 4P’s (or 5P’s):
- Price
- Product
- Place
- Promotion
- People
Good marketing
- Increases visibility – makes customers know about the company, products, and services.
- Builds trust – strengthens the company’s brand and credibility.
- Generates more business – attracts new customers and increases sales to existing customers.
- Differentiate from the competition – clear communication of your company’s strengths makes customers choose you.
- Gives the right message to the right target group – effective marketing focuses on the customers’ needs in the exact channels where the customers are located.
- Is measurable and continuous – marketing should be followed up and developed based on results.
9. Sales and customers
Customers are the company’s most important asset.
Successful sales are based on:
- High customer satisfaction
- Quick responses to quote requests
- Good after-sales service
- Long-term customer relationships
Retaining existing customers is usually more profitable than acquiring new ones.
10. Suppliers and networks
Suppliers and partners are central to the business.
The company should:
- Evaluate suppliers regularly
- Build long-term relationships
- Participate in industry networks
- Develop contacts with advisors, funders, authorities and educational institutions
A strong network creates new opportunities and support in the face of challenges.
11. Personnel, organisation and competence
Growth often requires:
- New hires
- Clearer division of responsibilities
- Leadership and organization
The company needs:
- Competent and motivated employees
- Effective communication
- Employee development through training and feedback
- Knowledge of labour law, work environment and collective agreements
The organization should be scalable to be able to grow without major problems.
12. Risk management
Risk management goes beyond insurance and includes both the company’s and the owner’s risks.
Examples of risks:
- Indebtedness
- Occupational accidents
- Product liability
- Illness and death
- Legal and financial commitments
Risks should be identified, assessed and managed through insurance, contracts and preventive work. All critical functions of the company should have a back-up or backup plan.
13. Annual clock
An annual clock helps the company to plan its operations systematically throughout the year.
It may include:
- Budget work
- Financial statements
- Strategy meetings
- Marketing efforts
- Development discussions
- Supplier follow-ups
- Fairs and seasonal planning
The aim is to create structure, reduce stress and improve the management of the business.
In summary:
The core of the growth plan is that profitable and sustainable growth requires clear goals, good planning, strong finances, efficient processes, skilled personnel and active risk management. Companies that work systematically with these areas increase their opportunities to grow long-term and successfully.
When was the last time you inspected your company?
At the moment, our business consultants offer a business assessment at the campaign price of 290 € + VAT. The business assessment is a current situation analysis that is based on a detailed year-end analysis and a company valuation of your company.
Contact us and book a business assessment as the start of the next step in the journey to success!