A small business growth plan is essential, as it provides the roadmap to establish and measure goals. Here’s what you need to know.
Excellent planning is essential to business growth. That is why it makes sense to invest time in learning how to write an effective growth plan for your business that will keep you on track and equipped to handle the issues that inevitably come with scaling your business.
The Necessity of Business Growth Planning
Writing a business growth plan is the precursor to successful expansion. A small business without a growth plan may lack the focus necessary to scale. This type of planning is a process that defines where the company is now and where it wants to head in the future. It’s a proactive step that professionalizes your growing company and standardizes benchmarks that will roadmap your success.
What to Include in Your Business Growth Plan
Your business growth plan should define how large you want to grow in the next 12 to 24 months. There are several key areas to cover:
- Your executive summary should include what you’re selling, your business goals and objectives, and where the company is today.
- Operational information should include details about your business, such as the size of your staff, your location and business equipment or assets, supply chain, and other important business details like inventory.
- Management and ownership details should include each person’s qualifications to run the business. Also discuss current staff and how these workflows will shift as you grow.
- Product or service details include such items as what you’re selling and how it fits into the market. Who are your competitors?
- You should include a marketing strategy and plan that roadmaps how you anticipate fueling this growth with new sales. Talk about your target market and how you plan to reach and engage them to grow your business.
- Financial details should include current profit and loss (P&L), cash flow, and audited account information. It should list P&L for the past three years or for the time your business has been in existence, should you have less than three years. It should also include projects in all these areas, along with sales forecasts.
Tips for the Best Possible Growth Planning Document
There is a right way to document your business and set it up for strategic growth. The first tip is to create a well-written, clear, but concise document of roughly 20 pages. Use your executive summary to tell a compelling story about your business and engage the reader.
In the body of your growth plan, be specific about your plans to grow and show the reader that you’ve given tremendous thought to how and why you’re expanding the company. This section will really shine a light on how much you know about your industry, so don’t be afraid to act like the subject matter expert you are.
Speaking of shining a light, make sure you show your company in the best light possible. While the business growth plan has important financial details on your business, it is also a sales document that you will use potentially to engage investors or for seeking small business funding.
Why a Business Growth Plan Is Important to Small Business Funding
Small business growth starts with a solid plan that will lead you to small business funding. Whether that funding comes from an angel investor or a lender, you should write a business growth plan that clearly explains why someone would want to provide you with small business funding.
Even if you have the means to self-fund, or are planning to use your 401(k) or IRA to fund the business, a business growth plan is an essential tool to help you gauge where the business is and the future goals. But unlike a traditional loan or investor funding, it is not a requirement.
To find out more about small business funding and 401(k) funding, download our Innovative Funding Strategies For Entrepreneurs today.