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Is your SaaS business growing as quickly as you'd like?
If not, don't worry. You're not alone.
Many SaaS owners struggle to increase their business growth to the level they want, especially early on. But it doesn't have to be that way.
Today, we'll cover a step-by-step framework to design an effective growth plan for your startup. Whether you're a SaaS veteran or an early-stage founder, you'll find valuable insights to grow your brand.
First, though, let's make sure we understand what makes for a great business growth plan.
At a high level, a great business growth plan has five key ingredients:
The OKRs framework is a goal-setting system popular in the tech world. It includes an emphasis on qualitative goals instead of quantitative ones, which is better suited for startups.
It's also better to avoid directional statements like “grow by 40%” at the beginning of your company when you're unsure of how your business will grow.
Instead, it's more effective to set targets like “increase our retention rate by 5% within three months” or “increase our monthly active users by 10% by the end of the quarter.”
When defining your OKRs, you should include:
By breaking these yearly goals down into smaller, more manageable chunks, you can better track your progress and keep everyone on the same page.
Many founders make the mistake of focusing first on revenue, but this has its pitfalls. While increasing revenue is crucial for financial growth, it should be a byproduct of your other initiatives, not the sole metric to track and take credit for.
For example, it's a good idea to track your monthly active users (MAU) or customer acquisition costs. These metrics show how well you're executing on your road map and achieving your monthly targets, which you agreed upon as OKRs.
Your business should have a clear vision and strategy to know where you want to go. This is your roadmap.
Include specific milestones that map out how you'll achieve your yearly goals in quarterly chunks. Milestones don't have to be complex, but they should include key results you want to accomplish to reach each objective.
For instance, if your objective is to “increase our monthly active users (MAU) by 10%”, then one of your milestones might be to “launch a marketing campaign around our new service offering.
Another milestone could be to “hire a technical writer to create new documentation for our product”.
By creating these milestones, you're better able to measure your progress throughout the quarter and identify opportunities to pivot your plan as necessary.
To know if you're making progress, you need to know where you currently stand. In other words, you need to establish benchmarks to measure your results against your objectives and milestones throughout the year.
Establishing these benchmarks requires some data gathering. This means collecting third-party market research, user feedback on your product, and your own internal data.
Which metrics should you focus on?
It depends on what you're good at, where your competitive advantage lies, as well as the type of product you have.
Broadly speaking, most SaaS startups should focus on user growth metrics like ARR, MRR, CAC, LTV, among others.
Note: To learn more about SaaS growth metrics, we suggest you read “9 essential SaaS metrics you should be tracking in 2022.”
Your product is not the only player in the game. Your company needs to stay on top of what your competitors are doing.
Analyzing their strategies and tactics can help you understand how your market is evolving and identify new growth opportunities.
You can research your competitors using third-party market data, like App Annie and G2 Crowd. You can also check out their public-facing resources, like their websites and blogs.
Just make sure that you don't simply copy your competitors' growth strategies. Instead, use this research to identify trends and find out what has succeeded and failed for them in the past.
This information will help you map out your own strategy for success.
Once you've established your key results, milestones, metrics, and benchmarks, it's time to create clear action steps around how you're going to achieve each objective.
To create these steps, try breaking down your original annual objectives into smaller milestones and tasks.
Using the S.M.A.R.T approach can help you make sure your plans are specific, measurable, actionable, relevant, and time-bound. This approach is a good way to keep you on track, focused, and on schedule throughout the year.
For instance, if your company goal is to “increase our paid subscriber base by 10%”, then one of the steps might be to “follow up with all of our inactive users throughout the quarter”.
If your objective is to “increase conversion rates by 30% in three months”, then one of your action steps might be to “test three landing page variations each month.”
Setting clear and measurable action steps helps you stay on track and reach your milestones.
At this point, you already have an overarching vision, key results, milestones, metrics, benchmarks, and action steps.
That's all you need to start strategizing your plan of attack.
Now it's time to get specific.
We've outlined seven key steps that you should keep in mind when developing your own plan.
Simon Sinek's TED talk, “How Great Leaders Inspire Action”, argues that great leaders understand why they do what they do.
Before you start mapping out your action steps, it's helpful to understand the “why”.
Knowing these answers can help you stay motivated and maintain perspective throughout the year.
Take Google, for example.
Google's mission is to “organize the world's information and make it universally accessible and useful.”
This mission statement is clear, concise, and easy to understand. It establishes the company's purpose and helps guide business decisions.
Google's mission also inspires growth.
The goal of making the world's information available to everyone implies that Google needs more users, which means they need to create better products, which further contributes to their mission.
In other words, knowing why you want to grow is an important step towards actually growing.
Most founders focus too much on “how” and not enough on “why.”
Make sure you spend just as much time mapping out the “why” as you do the “how” of your plan. That simple step will separate you from the pack.
By identifying what's already working, you'll establish a solid foundation for your growth plan.
At this point, it may be helpful to create a SWOT analysis of your company. This involves protecting what's working and focusing on the strengths of your brand, while also identifying and exploring opportunities for improvement.
For example, if your company excels at customer service, but struggles with product development, you could focus on improving your customer support while hiring an in-house software engineer to improve the app.
If you're a small company trying to compete with billion-dollar brands, you could narrow down your audience and target a smaller segment of your market. That might help you differentiate your product and boost sales, without competing directly with industry leaders.
The bottom line is to identify what's working and use that as a starting point for your growth plan.
Complexity won't serve you.
You need to focus on the essentials and build from there.
You can always add more to your plan as you go along, but keeping things simple at first will help you stay on track.
Keep your plans short.
Write down only the top three objectives, and don't list more than five action steps for each objective.
Simplicity helps you stay productive, which is key to building momentum.
Many people confuse strategy with tactics.
While both terms refer to a plan of action, they're not interchangeable.
Strategy requires you to look ahead and consider the long-term implications of your actions. It's not just about what you're going to do today, but also about where you're headed in the months and years ahead.
Tactics, on the other hand, are small, specific actions that are designed to help you reach a particular goal.
You can think of strategy as the map and tactics as the vehicle. A vehicle without a map will get you lost, but with the right map, you may end up someplace incredible.
When designing your growth plan, it's crucial to define your strategy. Otherwise, you'll never know where you're headed or why certain tactics are necessary to achieve your goals.
For example, if your main growth strategy is “inbound,” then you'll know that your tactics should revolve around inbound activities, like content marketing and SEO.
On the other hand, if your main growth strategy is to expand your user base by targeting a new audience, you'll want to spend more time developing marketing tactics that will help you achieve that goal.
At the end of the day, it all comes down to knowing what your focus is, and making sure everyone else on the team knows it too.
You might assume that your plan is great because you've got it all mapped out.
Unfortunately, a lack of organization can hurt productivity and make it difficult to stay on track.
When designing your growth plan, organize work in a timeline.
That means you'll need to create a list of tasks and determine how long each one will take.
Here's the kicker: every task must be assigned to a team member, and you'll need to include specific deadlines for each task.
If one of your goals is to “increase traffic,” you might break the process down into smaller tasks, like “optimizing pages,” and “purchasing ads.” Then you can assign each one to a team member and come up with a rough estimate of how long it will take.
This will keep you organized and accountable to everyone on the team. When faced with an unexpected obstacle, you'll be able to factor it into your timeline and adjust accordingly.
When growing your company, it's important to be open and transparent.
You can't afford to have a communication breakdown when things get hectic. People need to know exactly what's going on and how they can contribute.
Designing a growth plan is time-consuming, especially if it's your first time. Your team will be busy, and you'll need to make sure everyone knows their role and how they can contribute to the big picture.
You should centralize communication so everyone is working towards the same objectives, and no one gets lost in the shuffle.
Set up regular meetings where the entire team can meet face-to-face, and make sure everyone is on the same page.
Set up a virtual chat room or a project management system where team members can communicate or post updates from their smartphones.
Don't just use email to communicate with employees, as it can be easy to ignore or delay responding.
This step might seem a bit overwhelming at first. But remember, you'll only need to do it once, and it will make things a lot simpler in the long run.
You've finally settled on a great growth plan. Great work!
Now, it's time to focus on the specific tactics that will help you achieve your goals.
Before you get started, make sure each tactic is directly linked to your strategy.
For example, if your main strategy is to acquire new customers through in-person networking groups, then you'll want to focus on tactics that are designed to get people into those groups.
On the other hand, if your main strategy is growing a social media presence, you might want to focus on platform-specific tactics, like Facebook or Instagram Ads.
When possible, try to prioritize tactics that will help you solve multiple problems. That way, you can get more done with less effort.
Every company needs a business growth plan.
Whether you're looking to expand your customer base, increase sales, or grow brand awareness, a plan will help you stay on track and get the most out of your time.
By following the information outlined in this guide, you'll be able to design a plan that fits your brand.
And, if you're looking for a more specific framework to grow your SaaS, take a look at Executive Navigator — a complete program to grow your business from $1M to $10M+ in revenue.
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