Currently the CEO of Synergy Life SciencesChris has 25 years of experience creating, distributing and supplying quality ingredients.
Using phased growth strategies can be immensely helpful in running and growing a business, whether you work in a company unpredictable industry or respond to volatile economic conditions.
In volatile industries, companies must regularly respond to changes in legislation, best practice and consumer demand, often with very short turnaround times. With many years of experience in the personal care and cannabis industries, both of which are changing rapidly, I’ve made gradual growth work for me and my businesses.
What is phased growth and how can you implement it?
Phased growth refers to launching each phase of your business incrementally rather than launching everything at once. You can incorporate this strategy into your business plan in several ways.
• Launch different branches of your company sequentially instead of simultaneously.
• Roll out your product line slowly.
• Provide flexibility in your plan or action plans.
• Keep a close eye on market trends and be ready to react with your next growth phase.
• Build a strong brand identity that you can run with while staying true to your mission.
What are the potential benefits of a phased growth strategy?
Based on my experience, here are five of the top benefits of implementing incremental growth strategies.
1. Keep your initial investment low.
Unpredictable industries can be very profitable if all goes well, but starting a business in these industries can be risky. I’ve run successful businesses in the challenging pharmaceutical and cannabinoid ingredient industries, and my risks have spread out because I’ve prioritized gradual growth over a one-off approach when launching my businesses. By using phased development strategies, you can enter the market and make your mark in the industry with a lower upfront investment and therefore less financial risk.
Incremental growth allows you to fund different stages in your company’s growth at scheduled times. Although you need some initial capital, you can start attracting clients and customers at a lower initial investment cost. As your business grows, you can finance each successive phase one at a time, keeping costs low and allowing you to adapt to changing regulations, market trends and situations with minimal capital loss.
2. Coadapt with an industry.
Phased growth also allows companies to adapt to changes in the industry as needed. As you grow incrementally, you can speed up, slow down, or adjust as needed to stay up-to-date and compliant.
3. Stay afloat in fast-changing legal landscapes.
Slow growth allows you to respond quickly to changes in regulations, public perception and enforcement. For example, the recent news that THCo is not protected below the Agricultural Account 2018 came relatively suddenly. I saw how companies in the cannabis industry were able to react more quickly to this news with a phased, multi-level growth model, halting product development and adjusting their approach where necessary.
4. Respond quickly to consumer trends.
Gradual growth also allows you to react quickly to consumer and market trends, which often have an incredible impact in uncertain industries. My company routinely waits to release products until we have ensured market readiness for our new technology through extensive planning and research. It can be tempting to premiere an exciting product as soon as it’s ready, but it’s best to wait to introduce the next phase of your business until all factors are aligned.
5. Balance short-term and long-term goals.
Finally, an ethos of more gradual development allows you to make short-term plans and adapt to an ever-changing industry while staying true to your long-term goals for the company.
Your ultimate goal may be to grow your business over the next decade or more, but you need to break that down into smaller steps. The landscape is likely to undergo multiple changes as you pursue your overarching goal, so it’s essential to set more short-term goals and be prepared to switch between them if necessary.
Finally, the benefits of gradual growth do not only apply to companies in uncertain industries such as cannabis and pharmaceuticals. Companies in any industry can apply principles of incremental growth in their business plans to make their organization more efficient overall. Whether you choose to fully embrace an ethos of slow and steady growth and development or simply keep these principles and benefits in mind as you go about your business, staged growth can be a game-changer for stability and the success of any business.