7 Key Steps to a Growth Strategy That Work Immediately

If only half of startups survive more than five years and only one-third make it to 10, what’s the one thing you could do to ensure your company is sustainable? The answer is to create a growth strategy for your business, of course.

A growth strategy involves more than simply envisioning long-term success. If you don’t have a tangible plan, you’re actually losing business -- or you’re increasing the chance of losing business to competitors.

The key with any growth strategy is to be deliberate. Figure out the rate-limiting step in your growth, and pour as much fuel on the fire as possible. But for this to be beneficial, you need to take the following steps:

1. Establish a value proposition.

For your business to sustain long-term growth, you must understand what sets it apart from the competition. Identify why customers come to you for a product or service. What makes you relevant, differentiated and credible? Use your answer to explain to other consumers why they should do business with you.

For example, some companies compete on “authority” -- Whole Foods Market is the definitive place to buy healthy, organic foods. Others, such as Walmart, compete on price. Figure out what special benefit only you can provide, and forget everything else. If you stray from this proposition, you’ll only run the risk of devaluing your business.

2. Identify your ideal customer.

You got into business to solve a problem for a certain audience. Who is that audience? Is that audience your ideal customer? If not, who are you serving? Nail down your ideal customer, and revert back to this audience as you adjust business to stimulate growth.

3. Define your key indicators.

Changes must be measurable. If you’re unable to measure a change, you have no way of knowing whether it’s effective. Identify which key indicators affect the growth of your business, then dedicate time and money to those areas. Also, A/B test properly -- making changes over time and comparing historical and current results isn’t valid.

4. Verify your revenue streams.

What are your current revenue streams? What revenue streams could you add to make your business more profitable? Once you identify the potential for new revenue streams, ask yourself if they’re sustainable in the long run. Some great ideas or cool products don’t necessarily have revenue streams attached. Be careful to isolate and understand the difference.

Related: 5 Mistakes Successful Entrepreneurs Don't Make Twice

5. Look to your competition.

No matter your industry, your competition is likely excelling at something that your company is struggling with. Look toward similar businesses that are growing in new, unique ways to inform your growth strategy. Don’t be afraid to ask for advice. Ask yourself why your competitors have made alternate choices. Are they wrong? Or are your businesses positioned differently? The assumption that you’re smarter is rarely correct.

6. Focus on your strengths.

Sometimes, focusing on your strengths -- rather than trying to improve your weaknesses -- can help you establish growth strategies. Reorient the playing field to suit your strengths, and build upon them to grow your business.

7. Invest in talent.

Your employees have direct contact with your customers, so you need to hire people who are motivated and inspired by your company’s value proposition. Be cheap with office furniture, marketing budgets and holiday parties. Hire few employees, but pay them a ton. The best ones will usually stick around if you need to cut back their compensation during a slow period.

Developing a growth strategy isn’t a one-size-fits-all process. In fact, due to changing market conditions, making strategic decisions based on someone else’s successes would be foolish. That’s not to say that you can’t learn from another company, but blindly implementing a cookie-cutter plan won’t create sustainable growth.

You need to adapt your plan to smooth out your business’s inefficiencies, refine its strengths and better suit your customers -- who could be completely different than those from a vague, one-size-fits-all strategy.

Your company’s data should lend itself to all your strategic decisions. Specifically, you can use the data from your key indicators and revenue streams to create a personalized growth plan. That way, you’ll better understand your business and your customers’ nuances, which will naturally lead to growth.

A one-size-fits-all strategy implies vague indicators. But a specific plan is a successful plan. When you tailor your growth strategy to your business and customers, you’ll keep your customers happy and fulfill their wants and needs, which will keep them coming back.

War vs. Combat. What’s Your Growth Strategy?

There are two ways to grow a business.


One, I’ll call the War Business Model.


The war business model is the style where you spread out the world map on a table, and expand your business while keeping your ultimate strategy in mind. To win, you need to capture more than 50% of the market share. What the organization needs to do is take dynamic action in the direction of the goal.


Microsoft’s operating system and Google’s search engine are good examples of the war business model. Despite losing hundreds of billions of dollars at first, they were eventually able to turn their losses into profits by continually aiming toward ultimate victory.


By contrast, the combat business model is where you can see the faces of the people you are working with. In our early days when, after much running around all over Japan, we had managed to at last acquire four or five store owners, our style was a good example of the combat business model. In this way of doing business, the organization values each small victory, and slowly builds these small victories into something really big.

The overall strategy that I formulated was to expand the company’s performance in this manner. Through a gradual accumulation of victories, we eventually reached a critical point.

Under the war business model—the model where from the beginning you make large investments and have a big army at your disposal—the return for success is great, but the risk of failure is equally great. With the combat business model you can easily pick yourself up again, even if you fail, because there is nothing much to lose. The reason why we were able to meet the challenge of the Internet shopping business—a model, it was believed, that would never succeed in Japan—was because from the outset, we employed the combat business model. Because I had the psychological fallback of knowing that we could always do things over again, I was able to make bold and decisive decisions.


Do not hold back on your growth ideas just because you can’t afford to wage war. Instead, try combat and grow one small victory at a time.

(Photo: FC Photography)nt

Posted by:Hiroshi Mikitani