You may think your small business plan is strictly for the launch stage or the first year of business. But it can actually be more effective as a long-term document that addresses each stage of your business growth.
Although you may not have all the details related to the future stages of your business, it pays to start the process early. Here are some tips that can help you do just that.
Address each business growth stage in every aspect of your business plan
Business plans are often developed to help during the seed stage and as you launch a startup. After that happens, the documents are often put on the back burner as the day-to-day activities of running a business take over.
However, the business plan can continue to direct your business growth effectively. This is especially true if you want future funding to expand or if you plan on selling your business or using acquisition as an exit strategy.
The business plan becomes a repository of quantifiable data about your company, its external and internal environment, your financial position, and your strategic intent.
To address each startup stage, you’ll need to significantly expand the scope of your business plan. That means creating sections within your business plan that reflect each stage in the business cycle, including establishment, expansion, maturity, and exit.
Once you create those sections, address each aspect of your plans for each stage, including
- Market research
- Analysis of your strengths, weaknesses, opportunities, and threats (SWOT)
- Marketing strategy and tactics
- Time line to achieve strategic goals
You may not have all the content for every stage and section. Simply fill in as much as your research and knowledge allow. Over time, you’ll be able to add information.
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Research similar businesses that are more established
A good first step is to look at established businesses and research their growth history. You can see how they’ve approached each growth phase, including their marketing approach, expansion stages, pivots, new products, and funding to fuel their growth.
Focus on businesses that are in similar industries and segments to see what you can benchmark to drive your own growth. You may also want to directly reference their experiences, growth stages, and campaigns in your own business plan as compelling reasons for your growth plans.
Know what you want to achieve throughout your company’s life cycle
This next action may take some time because it’s a complex and often stressful step. Considering and planning for an exit from the business that you built with your own blood, sweat, and tears can be difficult.
While you may find it hard to think about what could be the end of your involvement in a business you care about deeply, it doesn’t mean it’s the end of that business. Moreover, you’ll be able to develop a new business or accomplish something else.
With that in mind, decide what you want to achieve. Consult with your mentor, business advisor, and especially your cofounder (if you have one). Also, discuss the exit strategy options with your significant other and family. After all, what you do also impacts them.
Once you decide what you want to achieve with your exit strategy, you’ll need to incorporate that vision into your business plan so you can act accordingly. Remember that it’s not written in stone.
Life changes, and so do businesses, so you may need to alter that exit strategy in the future. At the very least, you have a roadmap in place to work toward and from, no matter what happens next.
Update the business plan as your business evolves
The constant change that defines today’s business environment necessitates regularly revisiting and revising your business plan.
Reasons to update your business plan include approaching the next stage of your business development or responding to a particular situation that has recently impacted your business. Don’t delete what you previously had in your business plan. Instead, add new content to the original document.
As part of this update, you may need to collect more data or revise the existing quantitative information in the plan for the current stage of business growth. Seeing the latest information within the structure of your business plan paints a clearer picture of what may occur during that stage. It also helps you determine how to address it, just like you did when you initially created the plan for your startup.
An ongoing record of the entrepreneurial journey
You may not have a good idea where your business is headed when you’re first starting out. Think of your business plan as a guide in that strategic process. It’s an ongoing task designed to provide a framework for yourself and any stakeholders interested in your company.
Developing a “working” business plan saves you considerable effort later on when you reach the maturity stage and want to take your company public, get acquired, or merge with another firm. All the latest data on your business is contained in a single document, charting your history and accomplishments through all stages of the business life cycle.