Here are the factors that should be included in a business growth plan. Pulling together the information below will give insight into your business today and serve as a roadmap for the future.
What is a business growth plan?
A business growth plan is a series of steps your company will take in hopes of reaching its short-term growth goals. Usually, these plans cover one to two years of activity, broken down by quarter. They are often structured to accommodate flexibility and revisions after every quarter.
What is a business recovery plan?
A business recovery plan is the process through which a company will return to its status quo after disasters such as storms, fires and other extreme circumstances. It is more concerned with preserving your company’s bottom line in an emergency than growing it during normal circumstances.
How business growth plans and business recovery plans differ
Whereas business growth plans concern actions that your company can and should take every day to better itself, business recovery plans create infrastructures through which you can rebuild after a disaster. Although growing companies may be more concerned with the tangible benefits that accompany business growth plans, business owners benefit just as much from planning for circumstances that, though rare, can be calamitous.
What are the four major business growth strategies?
Although there are theoretically countless opportunities for business growth, most experts group these opportunities into four major business growth strategies. These strategies include:
- Market strategy. With a market strategy, you’ll focus on earning more money from your current customer base. A market strategy avoids the development of new products and services in favor of adjusting your current prices or launching new marketing initiatives.
- Market development. To grow your business through market development, you’ll try to increase your market share in new target markets. This means finding new customers or expanding your presence in previously unexplored regions.
- Product development. To work toward company growth through product development, you’ll launch new products or services geared toward your current audience and market. This means that you’ll seek new opportunities for growth with the same customers using items they haven’t yet seen.
- Diversification. This strategy combines market and product development. As you enter new markets and offer your current markets more products and services, you may find more opportunities for growth than with solely market or product development.
How to write a business growth plan
You should include the following in a business growth plan:
Competitor analysis
You probably put together a competitor analysis for your business plan before launching to survey the products and services you’re up against. It’s time to revisit this analysis and look at your industry landscape. There are few businesses without competitors and you need to nail down yours. Here are questions you should answer after investigating businesses both big and small:
- Who sells products or services the same or similar to yours?
- Have your competitors expanded with new products or services in the last 6 months?
- What are the strengths and weaknesses of the competition?
- What marketing and sales strategies are used by each competitor to achieve their objectives?
- How does their website look and function?
- What’s the overall market outlook in your industry?
Discover expansion opportunities
When you review your competitor analysis, look out for expansion opportunities. Here are some ways a small business can expand:
- Create new products or add additional services
- Target new customers or clients
- Open a new location
- Go global
Your business growth plan should include details about whichever of these methods you choose and how you plan to pursue it.
Evaluate your team and invest in their talents
Realistically look at your team. Do you have trained employees in place to support a growing company? If you operate as a one-man-show, do you have the skills and bandwidth to carry out your growth plans? To answer these questions, your business growth plan should include a detailed analysis of your company's staffing needs and each team member’s responsibilities.
This section of your growth plan will also reveal if you need to hire in the future and what talents those new employees need to bring to the table. It can be a good strategy to share your growth plan with key team members. When employees see the company’s future and room for advancement, they’re more likely to help you reach your growth goals.
Create quarterly and yearly financial goals
Since business growth plans should be structured quarterly and allow for quarterly revisions, you should establish clear quarterly and yearly financial goals from the jump. You should do so because your revenue and profit metrics are the clearest indicators of how well your growth initiatives are faring. It’s also a smart practice because you’ll need money to fund your growth initiatives – in many cases, quite a lot of it.
Explore how to fund expansion
Expansion can be expensive. From research and development to increased marketing efforts, the old adage “it takes money to make money” rings true. That’s why your business growth plan should address how you plan to raise the money needed to acquire capital for growth.
If you have strong credit scores and the cash flow to support a loan payment, explore how funding can help you level up. The goal here is to get a loan with low rates, long terms, and low monthly payments. Popular uses of low-cost funds include buying inventory and equipment, purchasing commercial real estate, hiring new employees, and launching new marketing initiatives. Learn more here: Determining Use of Proceeds.
SmartBiz has had the pleasure of interviewing a number of customers who are fueling growth with the help of an SBA loan or bank term loan through a SmartBiz marketplace bank. Read how a variety of businesses across the U.S. are expanding here: Business Stories.
Outline marketing efforts
Here’s where you reveal the secret sauce-what marketing strategies are you going to use to get the word out about your products or services? There are a ton of ways you can promote your business to increase sales and brand awareness. And they don’t have to break the bank. Here are a few marketing tactics that can help a small business expand:
Website
The U.S. Census Bureau reports that among all households in America, 78% had a desktop or laptop, 75% had a handheld computer such as a smartphone or other handheld wireless computer, and 77% had a broadband Internet subscription. If you don’t have a top-notch website, you’re really missing out. Do an audit and refresh your site so it’s as effective as possible.
Social Media
There are more paid social media opportunities than ever before. Explore the channels that reach the audience you want and post targeted content with relevant hashtags. Learn how a SmartBiz customer is successfully using Instagram to drive 80% of their sales completely organically, without any paid advertising here: Business Story: Infinity Strap. If you need help in this area, consider hiring a social media specialist with small business experience: Small Business Marketing Tip: How to Hire a Social Media Strategist.
Email Outreach
Email marketing is a strong tool to help you connect with your target audience. Our blog post, Email Marketing Tips for Small Business Owners, outlines steps to help you launch effective campaigns. You’ll learn how to choose the right platform, how to brand your email and create a killer subject line, and more.
For in-depth articles on all things marketing, visit the SmartBiz Small Business Blog and choose the topic Business Marketing.
Define your USP
Your Unique Selling Proposition (USP) identifies what sets your business apart from your competitors. It’s one sentence summarizing your company and serves as the foundation for your marketing efforts. The Marketing Donut blog interviewed top marketing consultant Amanda Walker who explains why it’s so important to get it right: Developing your USP.
Identify target audience
It’s very important to determine the ideal customer that wants-or needs-your product or service. If your business is brand new, check out the competitive analysis you’ve put together for insights. If you’ve been around a while, engage with your current customers to collect data on their demographics and shopping habit.
Identify key performance indicators that are measurable
Key performance indicators (KPIs) help you focus on the most important performance measures. KPIs show how various parts of your business are performing. According to the QuickBooks blog, here are the 7 most important KPIs to track:
- Cash flow forecast
- Gross profit margin as a percentage of sales
- Funnel drop-off rate
- Revenue growth rate
- Inventory turnover
- Accounts payable turnover
- Relative market share
For more detailed information, read the full article:
How to write a business recovery plan
To write a business recovery plan, take the following steps:
1. Set a budget that reflects your plan’s components
If your business recovery plan involves allocating funds for paying your team after a disaster, make sure you adequately budget for this need in advance. If your plan also involves training your team on disaster preparedness, developing new employee handbooks with your plan in them, or buying business insurance, your budget should be even larger.
2. Build your disaster preparedness team
Disasters are typically severe enough that you’ll quickly become overwhelmed if you try to recover from them on your own. That’s why business recovery plans should designate several of your colleagues as disaster preparedness team members. Your team should include colleagues who oversee relocation if needed, set up work-from-home procedures, and report disasters to your insurance company.
3. Determine just how catastrophic a disaster could be
Often, disasters feel abstract and theoretical until they actually happen. Only then will you know just how much money your company stands to lose – well, unless you’ve conducted a business impact analysis in your business recovery plan.
In your analysis, do your best to predict the extent to which a disaster would affect your core operations and resources. Determine the duration for which your company could survive with its core operations or resources inaccessible.
4. Outline your plan
With a budget, team, and damage predictions in place, you can thoroughly detail the steps your company should take in the wake of a disaster. You should create steps that address your post-disaster operations, resources, products, and services and the cost of tending to each.
5. Train and test
No business recovery plan is complete without your employees thoroughly knowing its ins and outs. That’s why you should distribute your plan to your employees and train them on how to properly execute it during an actual disaster.
You should also couple training with plan testing. The two go hand in hand, as training sessions may expose faults in your plan that you otherwise might not have noticed. Whenever you discover gaps, you should delegate corrections to members of your disaster preparedness team, then retrain, retest, and repeat as needed.
Tips for creating a business growth or recovery plan
Whether you’re developing a business growth plan or a recovery plan, you can create a comprehensive document by keeping the below seven tips in mind:
1. Use what you know to predict what you don’t
Even the soundest business plans can’t perfectly predict the future. However, you can still use what you know to plan for what you don’t.
In the case of a business growth plan, use information about your target market, competitors, and your company’s previous growth to make educated guesses about what you must do to grow. In the case of a business recovery plan, think about which disasters your company is most likely to experience and plan for those.
2. Model your plan after others
Find a small business like yours that has committed to growth and successfully achieved it. Then, see if you can find that company’s business growth plan. Use what you see there to inform your own plan. Similarly, for business recovery plans, find a reference from a similar company.
3. Use technology and visuals
Thorough business plans invariably involve numbers. When crafting a business growth plan, you can best visualize these numbers’ impacts through software-generated charts, graphs, tables, and other visuals. When writing business recovery plans, certain graphs may help you understand how long recovery could take without safeguards in place.
4. Don’t go it alone
You’ve probably realized by now that business is best conducted with others (even if you retain sole ownership of your company). The same goes for planning, whether for growth or disaster. Consult with business growth or recovery experts, or ask other business owners for their advice. And don’t forget – your employees are among your best resources for both growth and recovery.
Final Thoughts
You don’t have to go through this process alone. Use SBA growth-oriented resources to help you along the way. Small Business Development Centers offer free assistance to new and established business owners. Topics you can get assistance with including business planning, accessing capital, marketing, regulatory compliance, technology development, international trade and much more. Find your local center here. Before you start, find the growth plans of successful businesses to help give you direction.
Finally, your business growth plan is a living document meant to be continually edited and updated. Don’t spend time and energy creating your plan then forget about it. A business growth plan is a valuable tool.
