If you’re starting your own company or even a small freelance business at home, you need a business plan. A business plan is a roadmap that explains what your business does and outlines your business goals and your action plan to achieve them. It also shows investors and lenders that you have a well-conceived business concept worth investing in.
A business plan is not just necessary to start your company but also to grow it. If you seek business growth, you need funding. You can’t raise funding if you don’t have a good business plan. Several studies have shown that entrepreneurs who create formal business plans are more successful than those who don’t.
Here’s how you can create and use your business plan to grow your company:
1. Create a complete business plan
Any business needs thorough planning not just to thrive but survive. To grow your business, you need to analyze your current performance and identify growth areas you want to target. In short, you need a business plan for growth.
In building a business plan, you need to include the following key components:
- Executive Summary
- Company Overview
- Industry Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Plan
A business plan is beneficial to your company as a whole. However, when you create a business plan for growth, you need to write it keeping investors in mind. If you seek funding from a venture capitalist or a bank for a loan, both will want to know how you plan on building sales in the coming months and years. A business plan for growth mainly focuses on revenue generation.
2. Identify your unique value proposition
Businesses that sustain long-term growth stand apart from their competitors due to their unique value proposition. Your value proposition is why your customer buys from you and not your competitors. It can also be a powerful marketing tool as it helps explain to customers why they should do business with you.
Although a large number of companies have established value propositions, not many of them have effective ones. An ineffective value proposition can be a huge problem as it can make your customers turn to your competitors. If your customers don’t immediately understand that you offer what they need, your value proposition is ineffective.
Your value proposition should be a unique benefit that you and you alone can provide, and no one else. It should be prominently included in your marketing plan and promoted throughout your business.
3. Identify your ideal customer
All businesses have a target audience. However, the important question you must ask is whether that audience is your ideal customer. It is extremely important to identify your ideal customer. When you create your business plan for growth, it must address the needs and concerns of that target group.
4. Study other successful companies
Before you start creating your business plan, look to other successful companies. It could be your competitors in your industry or similar businesses that are growing in unique ways.
Is your competitor doing something well that your company is struggling with? Can you implement their strategy in your company? Is it feasible? Seek help wherever you feel necessary. Sometimes a fresh perspective from another person or company can help you see your business in a new light.
5. Identify your areas of growth
With some research, you can easily identify areas that offer the best opportunities for growth. Such research will help you determine if you need to launch a new product line or add more services. You will also be able to figure out if you should be targeting a whole new market.
Sometimes, the best growth opportunities may be present at new locations, even overseas. When you have identified the best options for growth, ensure that you include them in your business plan.
6. Define your key metrics
Once you have identified your growth areas, you also need to define the key metrics that affect your business’ growth. These metrics come in handy in measuring changes that you implement. Unless the changes are measurable, there is no way of knowing if they are effective.
7. Identify ways to make your business more profitable
Your business plan should contain detailed information about how you will fund business growth. You may also add to your current revenue streams. Can you add more revenue streams that can make your business even more profitable? The more profitable your business is, the faster you find funding.
8. Enhance your strengths
It is quite common for businesses to continuously try to improve their weaknesses. However, sometimes the simplest way to grow your business is to focus and enhance your strengths, rather than trying to do away with the weaknesses. Play to your strengths and use them to grow and expand your business.
9. Outline your marketing efforts
Business expansion demands focused marketing efforts. Your business plan should include your action plan on how you will market your business for growth. Discuss your planned marketing tactics and how your marketing efforts will evolve as your business grows.
10. Invest in talent
Your employees are your most important resource. Make sure that you hire the best employees for each opening. Your employees are your direct link to your customers. Ensure to invest in people who are motivated and inspired by your company.
A business plan for growth is not a one-time exercise. A good plan should set the course of a business for the future. A business plan is an important tool that can help you identify where you are now and in which direction you want your business to grow.
Author Bio: Dave Lavinsky is an internationally renowned expert in the fields of business planning, capital raising, and new venture development. Dave has an MBA from the Anderson School of Management at UCLA and earned his Bachelor’s degree from the University of Virginia. He lives in Oregon with his wife and two children.