The importance of a growth strategy

We spoke with Robert Copping, Founding Director of Sightpath about all the key factors at play when constructing a growth strategy, what to consider when pursuing business expansion as well as avoiding the common pitfalls which prevent founders from achieving their growth vision.

Tell us about Sightpath and your role?

Sightpath helps companies to model different growth strategies and balance options with the ability to fund them. Companies can fly their strategies in our simulator before doing it for real. We calculate the finance required to deliver the chosen strategy to grow in the most expedient way currently possible.

I am a Systems Analyst with 20 years of experience generating business growth models for SMEs and how to fund them. I am also an entrepreneur, investor, author, speaker, and mentor.

Why is it important to have a strategic direction?

A clear and viable strategy helps mitigate risk and attract funding. The right level of funding enables timely execution of the strategy to deliver greater success for the company and better returns for shareholders at reduced risk.

What are usually the key elements of an effective business strategy?

Key elements can include:

• Clarity of customer proposition – to acquire and retain customers in a competitive market.
• Scaling capacity – to operate assets and resources to efficiently satisfy growing customer numbers.
• Visibility of cash flow – to fund operations, innovation, and development to scale.

How does a business leader/founder approach creating a strategy?

Consider your ideal customer(s), customer journey(s), and how to serve them efficiently to achieve a competitive advantage. Brainstorm options for innovation to future-proof your company. Consider all angles including technical, operational, or brand and marketing.

What are the key sections of a growth strategy?

Are there any universal methods for expansion a business can use?

There are several common strategies such as via networks of concessions, distributors, agents, franchisees, or influencers.

There are also strategies such as ‘Land and Expand’ or ‘Buy and Build’. ‘Land and Expand’ generally refers to creating a low barrier entry product to access a customer or market and gain trust, then cross-sell or up-sell other products or services to expand your reach. ‘Buy and Build’ generally refers to expansion via acquisitions, integration, and organic growth.

What are some of the specifics about a business that needs to be looked at before making a strategic decision?

A company must balance the importance of a direct relationship with the end customer versus speed of growth. The valuation of a business that has a direct relationship can be greater than one that has relinquished it to a network of distributors or franchisees.

What advice would you give founders looking to assess their own business strategy and accelerate their growth?

If organic growth has stalled, consider an acquisition. This can improve the bottom line by removing duplication and providing a good recruitment vehicle, especially for management.
A growing company will attract a higher valuation. If you can no longer see how to grow or to fund growth, sell quickly. Alternatively, maximise income generation and re-invest elsewhere.

What other factors can drive a business’ growth?

There are 2 ways to grow, by winning business from competitors or by being in a growing market. If your market is broadly static, your proposition must be better or cheaper than competitors or you must invest to make it so or pivot to a new market where you can be or are growing.

What are common themes preventing businesses from achieving growth?

• Lack of conviction – a company must usually invest in more capacity before it can adequately service more customers. Otherwise, it will lose customers at the same rate as it wins new ones.
• Strong conviction helps acquire and retain customers.
• Lack of funding – if the conviction is strong, funding is less of a problem.
• Lack of good people – if the conviction is strong, it is easier to attract and keep good people.

Is there anything additional you think readers should know?

Cash is the lifeblood of a business; a business plan must balance ambition with the ability to fund it. The Sightpath business planning service will calculate your maximum cumulative cash requirement for different growth strategies.

How can people get in touch with you?

Email or LinkedIn