Growth – a vital requirement
Growth is the vital requirement in business. Once a business achieves break-even and recovers its investment, it should focus on the plan for growth. In fact, the very initial business plan or business strategy would have spoken about the plan for growth. Business plan would not always go as per initial plan. Many businesses would review the original plan and make changes as required during the plan execution. Generally (a) requirement change, (b) external factors, (c) deviations in resource mobilization, and (d) lapses in schedule, milestone achievement would force changes to a base or original plan.
Any plan for growth inherently should consider factors like:
The facts related to your present business:
What is your business today in terms of (i) sales volume, (ii) profit ratio (iii) net worth (iv) cash surplus (v) credit limits (vi) product / service offerings (vii) production performance (viii) delivery efficiency (ix) brand identity (x) market conditions (xi) market reach (xii) stakeholder feedback (xiii) geographical presence (xiv) export potential; and (xv) scope, nature and area of expansion.
Futuristic view to maintain present growth or stature:
Before you initiate and implement a new plan for growth or expansion, it is imperative to evaluate the futuristic perspective of present growth. You should ensure that the prevailing processes, conditions and assumptions are valid for maintaining present business stature. The future plan or resultant diversion of management’s focus should not in any way effect the existing business at a later date.
The nature of growth being planned
Before you initiate and implement a new plan for growth or expansion, it is imperative to understand the nature of growth being planned for. Are you planning to increase present production capacity or service range to achieve business growth? Are you planning to enter into new area(s) of business? Are you planning to enter into export market? or Are you planning route of acquisition of related business?
Evaluation of planned growth:
Once you are clear on the nature of growth being planned, the next step would be evaluation of supporting and required parameters to initiate your plan. They include market data, strategic planning, financial plan, implementation modalities, and schedules.
Gathering and analyzing market data
Gather and analyze market data related to the performance of similar model, future outlook, technological advancements, stakeholder analysis and market segments.
Determining investment model
How do you plan to mobilize required investment? What are internal accruals and own equity? What is the portion of Debt? What are the participative / partner investments?
Evaluating financial projections
You should have pragmatic projections on sales and expenses. Besides, the cost of capital, WACP should be properly analyzed. The most simple measurement would be to understand the return for each dollar being spent and the time frame by which you will recover your investment.
Designating core team
The performance of any plan hinges on the core team who implement it. Core team must reflect core values like responsibility, accountability, proven capability, commitment and passion for success.
Monitoring KPI and Growth
Monitor the implementation and growth inline with the business plan.
There are several under performed projects which were wound up by the management before it was too late. Any bad project, or hasty investment will increase the liability factor unless the facts are identified in the earliest stage. Regular monitoring of projects or business would really help any time. The plan for growth should never be driven with complacency.
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