If you are starting your own business or even a small independent business from 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-designed business idea worth investing in.
A business plan is not only necessary to start your business, but also to grow it. If you are looking for business growth, you need financing. You can’t raise funds 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 business:
1. Create a comprehensive business plan
Any business needs careful planning not only to thrive, but also to survive. To grow your business, you need to analyze your current performance and identify areas for growth that you want to target. In short, you need a business plan for growth.
When developing a business plan, you should include the following key elements:
- Company presentation
- Industry Analysis
- Customer analysis
- Competitive analysis
- Marketing plan
- Plan of operations
- Management team
- Financial plan
A business plan is beneficial for your business as a whole. However, when creating a business plan for growth, you must write it with investors in mind. Whether you are seeking funding from a venture capitalist or a bank for a loan, both will want to know how you plan to build sales in the months and years ahead. A business plan for growth focuses primarily on revenue generation.
2. Identify your unique value proposition
Companies that maintain long-term growth stand out from their competition because of their unique value proposition. Your value proposition is the reason your customer buys from you and not from your competitors. It can also be a powerful marketing tool because it helps explain to customers why they should do business with you.
Although many companies have established value propositions, few have effective ones. An ineffective value proposition can be a huge problem because it can cause your customers to turn to your competitors. If your customers don’t immediately understand that you’re offering what they need, your value proposition is ineffective.
Your value proposition should be a unique benefit that you and only you can provide, and no one else. It should feature prominently in your marketing plan and be promoted throughout your business.
3. Identify your ideal client
All businesses have a target audience. However, the important question you need to ask yourself is whether this audience is your ideal customer. It is extremely important to identify your ideal client. When you create your business plan for growth, it should address the needs and concerns of this target group.
4. Study other successful businesses
Before you start creating your business plan, research other successful businesses. These could be your competitors in your industry or similar businesses that are growing in unique ways.
Is your competitor doing something good that your business is struggling with? Can you implement their strategy in your business? Is it doable? Seek help wherever you feel needed. Sometimes a new perspective from another person or business can help you see your business in a new light.
5. Identify your growth areas
With a little research, you can easily identify the areas that offer the best opportunities for growth. Such research will help you determine whether you should launch a new product line or add more services. You will also be able to determine if you need to target an entirely new market.
Sometimes the best growth opportunities can be found in new locations, even overseas. When you’ve identified the best options for growth, be sure to include them in your business plan.
6. Define your key indicators
Once you’ve identified your growth areas, you also need to define the key metrics that affect your business growth. These metrics are useful for measuring the changes you are implementing. Unless the changes are measurable, there is no way to know if they are effective.
7. Identify ways to make your business more profitable
Your business plan should contain detailed information on how you will finance the growth of your business. You can also add to your current income streams. Can you add more revenue streams that can make your business even more profitable? The more profitable your business, the faster you find financing.
8. Improve your strengths
It’s quite common for companies to continually try to improve their weaknesses. However, sometimes the easiest way to grow your business is to focus and improve on your strengths, rather than trying to eliminate weaknesses. Play to your strengths and use them to grow and grow your business.
9. Describe your marketing efforts
Business expansion requires targeted marketing efforts. Your business plan should include your action plan for 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 you hire the best people for every opening. Your employees are your direct link to your customers. Make sure you invest in people who are motivated and inspired by your business.
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 determine where you are now and in which direction you want your business to grow.
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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.