Writing a business plan to grow your business
Are you taking time to step back and think about how to grow your business?
You probably wrote a detailed business plan when you first started, putting a lot of time and effort into researching your market, checking out your competitors, and thinking about your marketing strategy.
But how often have you revisited that plan since you first wrote it, and how often have you reassessed where you are against your original objectives? For many people, the answer is… never!
Whilst the day-to-day tasks of running your own business will take priority, it is important to stay on top of your plan, building the time into your schedule to review and adapt as you go. Doing it periodically, say every month, will ensure you remain nimble and keep on top of changes.
Now might also be a time when you start thinking about growing your business. Creating a business plan to grow your business can be an even tougher task than when you created your first plan - you now have experience and knowledge, but with a lot more to think about and more to lose. Making the move to grow your business can be a scary proposition.
Here are our top tips on what to think about when creating a new plan, and what areas you will need to focus on that you may not have covered in your original plan.
Restate your vision and goals
Now is a great time to step back and think about the vision for your business. Is it achieving what you originally envisaged? Are you getting what you want from it - enjoyment and satisfaction of what you are achieving, the financial return you want, the right balance of time?
Do you have an exit plan in mind, or is this a forever job? If you have an exit plan, are you on the right path to get there? Make sure you think about these elements over an achievable but meaningful timeframe; five years is a long time and a lot can change, so keeping your plan to 12 - 24 months keeps it in reach.
It is critical to set clear and achievable objectives for how you want to grow your business.
Do you want to keep doing what you do but generate more profit?
Do you want to do more of what you currently do by expanding your business and taking on more clients or customers?
Do you want to branch out into new markets?
Do you want to diversify your business portfolio and do something very different?
Do you want to step back and spend less time in the day job, but still have the business running and delivering what it is today?
Depending on your objective(s), your plan could take a very different shape so it is important that you define this upfront.
Assess your current situation
Once you have a clear view of your vision and goals, the next step is to make an objective assessment of your current situation.
You may have used a simple methodology to assess your business idea back when you started - for example a SWOT analysis (Strengths/ Weaknesses/ Opportunities/ Threats) or something similar. A simple approach like this is ideal to really think about how you are currently performing.
What are your Strengths? Have you built a strong brand, are your marketing channels performing well, do you get consistently positive client or customer feedback, and are you generating enough revenue that your business is profitable after covering all of your necessary costs?
Have you identified your Weaknesses? Where do you know you need to improve, are your competitors consistently better than you at something, are there certain customer segments that you’ve struggled to sell to or engage with, and are there elements of your marketing or website that need sharpening up?
What Opportunities have you identified? Are there obvious additional sales opportunities you could reach if you had the resources, are there cost reductions or increased pricing opportunities, and is there a new or adjacent market you could branch out into?
If you don’t evolve your business, what Threats do you face? Are competitors doing something more innovative, is your pricing coming under pressure, are your marketing channels becoming tired, and are rising costs putting your profit under pressure?
When making an assessment of your current situation it is important to get input from external sources. It can be hard to objectively assess your own business performance, particularly its weaknesses, so gathering input from customers, suppliers, and other stakeholders will help keep this as objective as possible.
What are the options to achieve your objectives?
With a clear view of your objectives and the current situation you are in, you can now think through the options to achieve those objectives. Here are a couple of examples.
If your objective is to increase how much income you can generate, you will want to consider the options:
Increase prices - what reaction would you get from customers or clients if you increased your prices? How would this impact your position against competitors? How would you explain the changes to your loyal customers or clients?
Increase volume - what would it take to sell more of your product or service? Would you need to increase investment in your marketing, or need more staff? How would this increase your costs and therefore your profitability?
Reduce costs - could you improve profitability by reducing your business’s costs? Are there goods or services you have to purchase that you could negotiate costs down on, or change suppliers?
If your objective is to grow sales volume, you will need to think about a different set of options:
Marketing investment - do you need to increase investment in your marketing activity or expand into new channels? Have you optimised your current marketing activities as much as possible to ensure you are maximising performance?
Price and promotion - can you invest in your pricing, launching promotional offers to grow your market reach and conversion with new customers or clients?
What expansion opportunities does your business have? - is your current product or service aimed at a premium segment and therefore doesn’t address more value-orientated customers. What brand and pricing changes would you need to make to appeal to this broader market without damaging your core market?
Are you able to extend into new markets - can you grow your core business into completely new markets, e.g. new territories or countries, new product lines, new services? What costs would this kind of extension entail, would you need more staff and other costs?
Create an action plan
Once you have defined how you want to achieve your objective, you will need to create an action plan to get there
Set out a timeframe for your plan, making sure it is achievable. Setting a short timeframe could put significant additional stress on you and distract you from day-to-day business management.
Update your financial plan and carefully consider any additional costs your plan will incur. The benefits of your plan will always come after the upfront costs, so you need to ensure you have the funding in place to support these changes.
Plan out what other resources you will need in place to support the plan. Will you need to set up new marketing campaigns, make website changes, get new contracts in place - and do you need external support to do this?
Set clear success criteria to measure your new plan. Have a set view in your mind to include in your plan of what you need to achieve and by when - without this, you will struggle to understand whether your plan is delivering toward your objectives.
Finally, set regular review milestones. If your plan involves a lot of change you will want to have frequent reviews, most likely monthly, to keep on top of how things are going.
Measure and react
Once you kick off your new plan and you have regular review points, you will need to have all of the right information in place to make an objective assessment of how things are going.
KPIs - key performance indicators - are a great way of understanding and measuring performance. For example, if your objective was to grow profitability and you’ve chosen to do this through a set of pricing changes to your core services, your KPIs may focus on metrics such as average revenue per customer. If you are trying to grow customer volumes through new marketing channels, you will want to focus on sales and marketing KPIs such as campaign reach, clickthrough rates, or average cost per acquisition.
Finally, don’t be afraid to adapt. There are many reasons why your new approach may not work initially. The important thing is to understand what is happening and react to the changing situation - no plan is fixed and any successful business will face significant challenges it has to adapt to.
We hope this helps give you a usable structure to start planning how to grow your business. If you need help and support to build out your business, get in touch.
This post was written by our Inner Circle member, Adam. If you’re in any need of Strategy or Commercial help, do be sure to book a 30-minute discovery call.