How And Why To Set A Business Growth Goal
Do you think setting goals is boring? I’m sure we would all rather be boosting conversion rates and increasing traffic. Am I right? Well, it may be boring but it is so important. If you don’t have a business growth goal, you’re essentially wandering around aimlessly. How do you bring in more revenue? How do you grow your business? Creating an annual growth plan and goal setting should be your first step.
How to Set Your Goal
There are two questions we are going to answer with this article.
- WHAT are you trying to grow? (variable)
- HOW MUCH do you want it to grow? (target)
You may be thinking of “growth” strictly in regard to revenue. Will revenue growth is fantastic, it may not be the best option for your goals. Let’s break down these two questions and get some answers.
What are you Trying to Grow?
Let’s break this down into three variables: Units, revenue, and subscriptions. If you set a revenue goal, you might to take the shortest path to achieve that goal. For instance, say your business has memberships. You can crank up your membership prices, try upselling, etc. However, in getting so focused on the revenue, you may lose quite a bit of memberships. In the long run, this may not be the most beneficial move for your company. Or, you may forget to acquire new members and lose the ones you have currently because you increased the price without increasing the value.
Unit growth can refer to customers, sales, members, contracts, trials, and more. If you’re an agency and your goal is to solely get more clients, you might drop your prices to take on more clients. This may or may not be a good idea for your business. You need to take a look at your specific business and choose a goal that makes the most sense for you.
How Much do you Want to Grow?
There are different levels of growth that are important to learn to ensure the goals you’re setting are measurable.
- Hypergrowth: 3X, 2X, 75% growth per year.
- Usually venture capitol funded.
- Rapid Growth: 2X, 75%, 50% growth.
- Very fast growth. Usually unattainable without outside funding or in an extremely fast-growing market.
- Steady Growth: 50-75% annual growth.
- Great goal for bootstrapped or self-made companies.
- Mature Growth: 10-25%
- If your margins are strong, this is still a great goal. Just make sure you aren’t lagging behind the market.
Your growth goal can vary vastly depending on the age of your company, your industry, current growth, etc. As you launch new products and programs, you may go through spurts of rapid growth but are otherwise in the mature growth category.
Make Your Business Growth Goal!
It’s time to sit down and make your goal. Take a look at your metrics and what you already know about your business. Then take a glimpse into the future and figure out what you want it to look like and how you are going to get there. What do you want to grow and by how much? That is your starting point for creating your business growth goal.