I took a flight from Reno, NV to Poenix, AZ in 2009 where I had the opportunity to sit next to a very smart guy. I don’t remember his name, so I will just call him Brett. Brett had a background in economics and was in the economics doctorate program at the University of Nevada – Reno. As we talked, he brought up a very interesting question. He said, “So every new business owner is always concerned about what they should do to avoid failure. They are so concerned that their product remains relevant that they never ask themselves, ‘What will we do if everything goes really well? How will we keep up with the demand if it is very high? What is my growth plan?'” From there, we began talking about a variety of things that leaders can do to prepare a growth plan, so that they don’t fail due to the inability to grow. Overall, the factors we discussed all dealt with having a growth plan in place.
Why have a growth plan
When you start your company, your growth plan will be a guide that you can follow as you expand. It will explain how you will grow and what you will do as you grow. In your plan, you can identify geographical areas where you plan to expand, new markets you plan to enter, how you plan to expand your capital, plant, and human resources, and what market strategies you plan to use. Within each industry there are low cost providers, high quality providers, and everything in between. As you create this plan, write as much detail as you can so you have a clear image of what you plan to do.
The more detailed you are with your growth plan the better. If you are detailed in your growth plan, you will be able to use it as you grow because it will outline what you will do going forward. If you aren’t detailed enough, you may not find much value in your growth plan and it may just get thrown to the side as you move forward.
As you create your growth plan, think of it as a guideline and not as a rule. The growth plan can change as your company progresses, but it will help you to have direction. In addition to creating it in the beginning, you should also review and revise it regularly so it continues to be relevant and you can continue to follow the plan. You can think of it as a living breathing document.
Downside of not having a growth plan
If you fail to put together a growth plan, it will be more challenging once you do begin to grow. I have even seen some companies fail because they grew faster than they were prepared to grow. Without a growth plan, you will have to make decisions on the fly and you may not make the wisest thought out decisions. If you have a high demand for your products or services, but can’t keep up, your customers will go to other companies to get their needs met. Also, when you find a need to fill, it is likely that someone else is also in the process of filling that need. If you can’t keep up with the demand, the other company will do what they can to fill the need and they may take your market share.
If your market grows and you take on new work to gain new customers, but you fail to grow as a company, there are areas that your may suffer. You may find that you have to overwork your resources, quality control may suffer, or you may make other promises that you can’t keep because you don’t have sufficient resources. It is easy to become very focused on what needs to happen for your company to be competitive enough to stay relevant that you forget about what to do if you are relevant and successful with a high demand for your products. If you forget about the growth plan, it could lead to your downfall.
As a leader, you need to have a growth plan in place so that when you grow you know what to do. The plan will guide you so that you can appropriately utilize your resources, as well as, acquire new resources to keep up with the demands of the customers.
Have you created and/or used a growth plan? How has the growth plan helped you to be successful? What downsides have you experienced from not having a growth plan? Please share your thoughts in the comments section below!