The next step in planning business growth is to project future income streams and gross margins. This may appear difficult in times of economic and social volatility, but it is possible to encompass such uncertainty into your plans and build safeguards to increase the likelihood that your business will survive into more stable times.

When working with small business owners, they often say, “I’ll be happy if we do the same as last year.” But that isn’t a plan as such; it’s more an acceptance that there’s nothing they can do to change their business performance and that their business growth is out of their hands. They may as well open their doors and see what happens!

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean

A successful plan will mean that you can go to market with firm foundations in place, meaning that you’re less likely to stall in your tracks or set yourself up for failure. Establish real sales targets, share these with your team, and give them ownership and the tools to deliver. Ultimately, it’s about giving people accountability but ensuring you measure and follow up regularly, praise face-to-face, and manage any poor performance. If this sounds too tricky or something you’re uncomfortable with, then seek help from a professional.

Thereafter, continue to update and involve the whole team. Only by surrounding yourself with the best team possible and ensuring everyone buys into your vision will you create ‘goal congruence’, which will help you realise your personal and business dreams.

1 Brainstorm

Set aside some time (at least half a day initially) in which you and your management and/or sales team can run through some exercises to better understand the marketplace, opportunities, and potential challenges over the next 12 to 18 months. Agree on actions.

2 Assess market forces

Step back and determine which market forces (drivers) are affecting your customers and, possibly, their customers. Are the social demographics within their area of influence changing? Are they growing or shrinking? Are the age profiles of their customers/end users changing?

What effect is developing technology having on your customers and their customers? Do you face stiffer competition due to cheaper manufacturing and automated delivery processes, or are traditional buying habits changing through utilisation and access to online information and social media?

Consider trends caused by economic fluctuations and the effect of currency exchange rates. Are these having a positive or negative effect on your own customer’s buying habits? BREXIT continues to cause uncertainty and delays to big-ticket item purchases.

Ensure you consider any political factors and their effects on the marketplace, from the ever-increasing turmoil, political unrest, or terrorist threats across the globe to new legislation that can close or create market opportunities. Remember how UK solar panel (PV) suppliers and installers experienced a huge drop-off in business when feed-in tariffs legislation changed?

3. Consider your customers

The next step is to look at your current customer base. Which sectors of industry or demographics are they operating in? Which companies and sectors will likely be the winners, and who could be the losers? If you don’t know, don’t assume; find out from your customers. What are their challenges and expectations for the future? An extended exercise of this phase is highlighting prospective customers in sectors you believe will prosper over the next few years and making this your hit list.

4 Know where your profits lie

Review your current product/service sales split against total sales revenue. Then, determine which revenue stream delivers the highest gross margins and which covers costs. Understand why there are differences. Are some services delivered by in-house labour rather than outsourced, or are the increases in purchase prices of material not being passed on to your customers? Highlight the products or services that generate a higher margin, as you need to promote and sell more of these. For the remainder, either review your prices or don’t promote them unless they are a strategic loss leader to obtain bigger opportunities.

5. Promote your low-hanging fruit

Focus on the areas in which to increase sales over the short term. For each existing customer, highlight what products or services they buy from you and, importantly, what they don’t buy. Ask yourself if you’re getting your ‘share of their wallet’ or if there are further products you could sell to them. What are your customers buying elsewhere that you could supply? Again, don’t assume; contact and revisit all your top customers, not to sell, but to raise awareness of your products and services and find out why they don’t buy these from you.

These are low-hanging fruit, and chances are, your customers don’t know you even offer them. If you carry out this process effectively, I wouldn’t be surprised if you increased sales revenues over the next 18 months by 18-20% and were more profitable too.

6 Aim and fire

Select five or six target customers from your hit list and draw up a plan to visit and market to these businesses over the next 12 months.

7. Forecast your sales

Start plotting numbers and setting targets for each trading month ahead. Start with a blank sheet of paper and set a realistic but stretched sales target for each month based on each product or service offered, and create separate invoice codes so you can measure and track.

Consider, if customer A only bought 50 of product X and five of service Y in 2021, what could they potentially buy in 2023?

And what other products and services could they buy throughout the next 12 months? Do this for each key customer and ensure that whilst you plot the sales revenue, you also tally the cost of sale for each month. Even if you only reviewed 80% of your existing customers, your sales prediction will be higher than your current year. Don’t forget seasonality; don’t be over-ambitious with obtaining new business from new customers. Ideally, you want a mid-range forecast rather than being too optimistic or reserved.

“The odds of hitting your target increase dramatically when you aim at it.”

Mal Pancoast

You may have to review this exercise a few times, and it’s worth sharing the plan with your team before you agree on any actions.

Consider how an increase in sales will affect fixed costs and the capacity to deal with greater volumes. Do you need to spend more on marketing, staff and wages, warehousing, equipment, machinery, or plant? If so, allow for these in your forecast.

“Unless commitment is made, there are only promises and hopes; but no plans.” – Peter F. Drucke

We hope that has motivated you to think about some things you need to implement and consider achieving business growth. If you feel overwhelmed by these considerations, that’s normal; no one can fulfil their aspirations without help and guidance.

If you are serious about growing your business, getting more customers, and increasing your profits, it’s worth considering working with a business growth consultant to ensure you hit the big time.

A business growth consultant will help you review where your business is now, recommend the best growth strategy for you, help you develop a robust growth plan, and help you implement it.

You will also receive guidance, have someone to bounce ideas off, and someone to talk to in confidence, and with this level of expertise and support, you will be better placed to reach your full potential and achieve your goals and aspirations.

What is a business growth mentor?