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15 Ways to Use and Get Incredible Value From a Business Plan
14 min. read
Updated August 1, 2024
What is a business plan used for? That fully depends on your business stage and specific business needs.
If you’re just starting, you’ll use a business plan to deal with uncertainty and navigate early doubts and questions. If you’re seeking funding then you’ll be using your business plan to explain your value to potential investors and lenders.
When created correctly , a detailed plan can help you successfully start, manage, and grow your business. Of course, this is just a simple introduction to the purpose of a business plan. Let’s explore and explain the uses of a business plan for each business stage.
- How to use a business plan when starting your business
When starting a new business, your business plan is meant to help you explore, define, and connect. You’re evaluating the type of business you’ll be running, who your target market will be, and defining how sections of your business will operate. Here are the key methods for using a business plan to successfully start your business.
1. Evaluate and develop your business idea
Is your business idea valid? Should you even pursue it? Will it sell enough to cover costs and expenses? Who else is doing something like this?
Your business plan will help you answer these critical questions. It guides you through the process of making the right educated guesses for every area of your business. This includes initial financial planning and outlining expected sales, costs of goods sold, expenses, and cash flow. You’ll also set up your strategy, tactics, major milestones, and success metrics.
Evaluating your idea by developing a plan ensures that you’re prepared and minimizing risk. You don’t need to have everything perfectly developed. However, you should know enough to determine if your idea is valuable and sustainable. Shouldn’t you be able to write these down for yourself before you take the risk?
You want to keep things short and simple. Start with a lean business plan, which is a collection of bullet-point lists and projections. Use it for yourself and your team members only, not to show to outsiders.
At the end of the day, your goal is to be able to deal with the big questions. Is this really a good idea? Will it work? Can you feasibly do it?
2. Inform your branding and mission
Writing a business plan doesn’t just help evaluate your business idea. It also ensures that you’re outlining core business operations that allow people to recognize, like, and trust your company. This is encompassed by your branding, value proposition, and company mission.
Branding is all about how your business looks and feels. Your mission statement then helps define what your brand stands for. Then your value proposition officially defines how your products and services effectively serve your potential customers.
Trying to please everybody is usually a shortcut to failure. Creating these upfront streamlines your focus toward the right people. Through effective market research, you create an informed brand position that is designed to reach and resonate with a specific audience.
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3. Identify professional gaps
Just like you can’t serve everyone, you also can’t be an expert on everything involved in running a successful business. Maybe you have industry expertise, solid management skills, or a specialized skillset. However, there may be other areas such as accounting, customer service, or marketing that you are completely unprepared to take on.
Creating a business plan allows you to explore operational areas that you are unfamiliar with and assess what skill gaps you need to fill. Even without experience, you’ll attempt to outline the functions of your marketing plan, financial forecasts, sales channels, etc. As part of this exercise, you can also mention specific roles or areas of operation that you need to outsource or fill.
This will directly tie the onboarding of professionals to your milestones and startup strategy. This will help you determine the right time to bring on more people. It will also prove to investors that you are thinking ahead and already understand your weaknesses.
4. Connect with mentors
Your business plan can be a great introduction to working with mentors, counselors, and business development organizations. The best example is in the U.S. Where more than 1,000 Small Business Development Centers offer workshops, counseling, and mentorship for small business owners and entrepreneurs. They really appreciate business owners having a business plan as part of the relationship.
Aside from these formal relationships with mentors, there are informal relationships that can evolve into mentorship over time. It may be another business owner, someone you’re pitching to, an employee, or someone you randomly connect with at a networking event.
This is where your business plan can be a great tool for explaining a business to somebody who might be able to help with it. Just keep a lean and streamlined version of your plan , or even just your executive summary, ready to share.
5. Connect and partner with suppliers
Business owners use forecasts and financial statements to manage their sourcing, suppliers, contractors, and inventory. You’ll anticipate sales and expenses ahead of time, review actual results, and revise accordingly.
Regularly scrutinizing your projected sales and costs can better inform your purchasing decisions and optimize inventory. Too much inventory can be a drain on cash. Too little can hurt production and sales.
Understanding the state of your financials will also make it much easier to approach suppliers and vendors. You’ll be prepared to discuss growth plans, negotiate product or service pricing, and changes to inventory. Your business plan can even be a key part of proposing a strategic alliance with a supplier.
The importance of a business plan in this instance is making sure you’re fully prepared to have these conversations. You’re not scrambling when you suddenly start bleeding cash or take on an excess of inventory. Instead, you’re using your plan to look ahead and prepare.
- How to use a business plan to pursue funding
An inevitable step for most existing businesses is the pursuit of funding . It can occur early in the lifespan of a business to help get it off the ground. It may also take years until it becomes necessary for a business to achieve an escalated level of growth. Here are the specific ways that you can use your business plan to successfully gain funding and present it to potential investors.
6. Solidify your funding needs
In years of angel investment, I’ve seen many attempts to raise investment run aground over entrepreneurs and owners not knowing how much money they need. Investors always want to know how much money you need and what it will be spent on. Bankers expect you to apply for loans for some specific amount.
Before you seek out a loan or make a pitch, you’ll need to understand how much funding you require. You can use your business plan to estimate that total. It will also demonstrate why you need that money, what you’ll do with it, and how it will help the business.
That process starts with your educated guesses about sales, costs, expenses, and cash flow. If your projections indicate that you can get by without other people’s money, then heave a sigh of relief because you don’t need investment or loans. If the projects show a deficit, then that deficit is likely how much money you need in funding.
7. Support for loan applications
Your business plan is your best-supporting documentation when submitting a loan application. Most commercial bank loans and especially Small Business Administration-backed loan applications require a business plan as part of the process. Your business plan should include your essential financials including sales, costs, expenses, and cash flow statements. Again, it should also show why you need funding, how you’ll spend it, and how you’ll pay it back.
These days it doesn’t always take a long formal business plan document. Often a lean business plan is enough to support a loan. That will include those essential numbers, plus short summaries of strategy, tactics, major milestones, and metrics.
8. Guide your pitch to investors
I’ve seen founders fail a pitch because they couldn’t answer common questions that come up. Questions such as:
- What are you projecting for marketing expenses?
- How much is your gross margin?
- What’s the headcount assumption?
This can be a death sentence for your chance at funding. Investors can immediately tell if you don’t have a plan to back up your pitch.
Another important myth to dispel is that investors don’t read business plans. The truth is that investors will often reject a proposal based on just a summary, without having read the whole plan. But when they like the proposal, the summary, and the pitch , they need the full business plan to guide due diligence.
In 12 years with an angel investment group, I’ve never seen an investment made without investors reading a business plan in detail. In short, you need to have your business plan prepared. It will enhance your pitch and make it far easier to move on to the next step to gain funding.
9. Manage funding once received
Having a business plan doesn’t just help you gain funding, it also helps you effectively manage it . You’ll have this outlined in an initial use of funds report and actively engage with investors through the ongoing business planning process. This doesn’t mean that you’ll be forced to stick to the strategy you set out with, and are instead able to optimize how to leverage your funding.
Track results including essential numbers and execution. Review those results regularly and revise as necessary. Use that process to provide updates as needed for your bankers or investors. That way you aren’t scrambling to pull together your financial statements and strategy when asked for them.
- How to use a business plan to manage and grow your business
The best and most common ongoing use of your business plan is to steer, manage, and grow your business. The business plan is for you to use to better run your business. Think of business planning for your business as a system that mimics navigation in your car.
The long-term goals are the destination. The strategy, tactics, execution, and essential budgets are the route. Tracking and reviewing real-time information are the choices you make when driving. They help you determine if you should adjust you’re route or stay on course.
Recognizing this primary use of the business plan also helps you focus on what you need and don’t need for your business plan. You can opt to work with a one-page business plan instead of a big formal business planning document. Here are the key ways you can use your business plan for effective business management and growth.
10. Establish a strategy and the tactics needed to execute it
Use your business plan to clarify your strategy , determine the tactics necessary to support it, and track your execution. No need to write elaborate text explanations. You can deal with just bullet points that summarize and remind you of the main aspects of your plan.
Think of this as a tool for maintaining focus. Most business owners and entrepreneurs want to do everything they can to please every customer. I certainly always did with my business.
But what we learn in the real world is that there is the principle of displacement in small businesses. What we do rules out what we can’t do.
11. Monitor and measure business performance
This ties directly into establishing your strategy and tactics but deserves its own focus. Your business plan is not only useful for defining milestones, key performance indicators, and success metrics. It’s also an invaluable tool for tracking and measuring this data on an ongoing basis.
Having these metrics sit directly within your plan ensures that you’re always linking tactile performance back to your broader strategy. It makes performance reviews and revisions much easier to complete. And should you need funding at a later stage, it makes it much easier to prepare your plan for a professional pitch.
12. Explore potential scenarios
A what-if analysis, more often called a scenario analysis, allows you to explore what might happen to your business in different scenarios.
What if we open another location? What if we change pricing? What if we add another employee? What happens if we don’t reach our sales goals?
You can use your business plan as a tool for scenario analysis. Save your current plan as the most likely scenario. Then leverage your forecasts to develop at least a worst-case and best-case financial scenario. From here, you can outline specific strategies within your plan to take advantage of opportunities and prepare for crisis events.
13. Plan revisions in response to a crisis
Speaking of a crisis, you can easily use your plan to develop an emergency response strategy. For example, when COVID changed everything almost overnight, business owners with well-established business plans were able to adapt far more quickly. Using their plan like a performance dashboard puts strategy, tactics, metrics, milestones, and essential projections all in one place.
This enabled these owners to look quickly at educated guesses on revenue decline and then adjust spending to compensate. They had a view of milestones due, and performance against metrics, and were able to adjust timing, scheduling, and priorities to deal with the crisis.
14. Determine the right time for growth initiatives
Similar to crisis planning, you can also use your business plan to better prepare your business to take on growth initiatives . Rather than blindly guessing if you’re needing to invest further to achieve growth, you can instead coordinate around swings in revenue, costs, expenses, and priorities.
For example, there may be an optimal time to launch a new website, a second location, or even an additional product. Any of these initiatives bring with them an opportunity for substantial gains, as well as an incredible risk if not executed properly. In any of these circumstances, you can use your plan to better understand how introducing a website, location, product, or anything else will affect your business.
What timeframe do you need to gain traction? What’s the necessary ROI that makes it a success? Do you have enough cash to invest in it right now?
You can answer all of these questions, and take full advantage of growth opportunities with your business plan.
15. Update your plan based on actual results
Using your business plan to track your strategy, tactics, and execution is the first step. The next step is to engage in regular plan reviews to maintain an accurate view of your actual results.
The point of reviewing your plan and tracking results is so that you can steer your business with course corrections as required. Plan vs. actual business plan analysis is perfect for this.
When a business plan review turns up results different than expected, you will always have the dilemma of whether to change the plan or the execution. When results are better than expected, then you have to decide whether you change the plan to take advantage of what’s working. And when you have bad news, you have to decide whether the disappointment means changing the plan or just improving execution.
In any case, using your plan in this way means you spend more time reviewing and less time pulling together data.
- Additional ways to use your business plan
Outside of this list, there are some special and less common use cases for your business plan. If you’re planning to sell your business, a business plan can help inform buyers beforehand. A business plan can also inform parties involved in a divorce or estate execution. It can also be useful for developing a continuity plan when a business is being passed on to a relative or employee.
Lastly, a business plan is key for determining the valuation of a business for purposes including sale, legal settlements, and taxation. All of these use cases tend to deal with helping streamline legal aspects of selling, transitioning, or valuing a business. Similar to how having a business plan prepped helps you prepare to pursue funding, it can also eliminate the need to do any additional work in these scenarios.
How do you ensure that you actually use your plan? Leverage growth planning
Business planning is the best way to achieve your business goals. It coordinates strategy, tactics, business activities, and teamwork and prioritizes results. You’ll likely find even more specific use cases for your business beyond the fifteen listed here.
To get started on your own business plan, download our free business plan template . It has everything you need to create a well-structured business plan and even includes guidance and tips from experienced entrepreneurs.
Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.
Table of Contents
- How do you ensure that you actually use your plan? Leverage growth planningÂ
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What is a Business Plan? Definition, Tips, and Templates
Updated: June 28, 2024
Published: August 04, 2020
Years ago, I had an idea to launch a line of region-specific board games. I knew there was a market for games that celebrated local culture and heritage. I was so excited about the concept and couldn't wait to get started.
But my idea never took off. Why? Because I didnât have a plan. I lacked direction, missed opportunities, and ultimately, the venture never got off the ground.
And thatâs exactly why a business plan is important. It cements your vision, gives you clarity, and outlines your next step.
In this post, Iâll explain what a business plan is, the reasons why youâd need one, identify different types of business plans, and what you should include in yours.
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What is a business plan?
What is a business plan used for.
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Purposes of a Business Plan
What does a business plan need to include, types of business plans.
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A business plan is a comprehensive document that outlines a company's goals, strategies, and financial projections. It provides a detailed description of the business, including its products or services, target market, competitive landscape, and marketing and sales strategies. The plan also includes a financial section that forecasts revenue, expenses, and cash flow, as well as a funding request if the business is seeking investment.
The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.
The purpose of a business plan is three-fold: It summarizes the organizationâs strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.
Business Plan Template [ Download Now ]
Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.
In an era where 48% of businesses survive half a decade on, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.
Hereâs why I think a business plan is important:
1. Securing Financing From Investors
Since its contents revolve around how businesses succeed, break-even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.
Iâve seen that all banks, investors, and venture capital firms will want to see a business plan before handing over their money. Therefore, these investors need to know if â and when â theyâll be making their money back (and then some).
Additionally, theyâll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.
2. Documenting a Company's Strategy and Goals
I think a business plan should leave no stone unturned.
Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.
To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies â from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.
These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.
3. Legitimizing a Business Idea
Iâve seen that everyoneâs got a great idea for a company â until they put pen to paper and realize that itâs not exactly feasible.
A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.
As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics â and that's exactly what the business plan is for.
It ensures you have everything in order before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.
4. Getting an A in Your Business Class
Speaking from personal experience, thereâs a chance youâre here to get business plan ideas for your Business 101 class project.
If that's the case, might I suggest checking out this post on How to Write a Business Plan , which provides a section-by-section guide on creating your plan?
5. Identifying Potential Problems
Business plans act as early warning systems that identify potential problems before they escalate into major obstacles.
How? When you conduct thorough market research, analyze competitor strategies, and evaluate financial projections, your plan pinpoints vulnerabilities and risks. This allows you to develop contingency plans and risk mitigation strategies.
This helps you prevent costly mistakes and shows investors and lenders youâre well-prepared and have considered various scenarios.
6. Attracts and Retains Talent
A well-articulated plan outlines your company's vision, mission, and values, showcasing a clear direction and purpose. People who want meaningful work that aligns with their ambitions will love this.
Also, it shows the company's potential for growth and stability. This instills confidence in employees and assures them of a secure future and opportunities for career advancement.
When you show growth potential and highlight a positive work culture, your business plan becomes a magnet for top talent.
7. Provides a Roadmap
A business plan provides a detailed roadmap for your company's future. It outlines your objectives, strategies, and the specific actions you need to achieve your goals.
When you define your path forward, a business plan helps you stay focused and on track, even when you face challenges or distractions. Itâs a great reference tool that allows you to make smart decisions that align with your overall vision.
This way, having a comprehensive roadmap in the form of a business plan provides direction and clarity at every stage of your business journey.
8. Serves as a Marketing Tool
A business plan is not only an internal guide but also serves as a powerful marketing tool. Your business plan can showcase your companyâs strengths, unique value proposition, and growth potential when youâre looking for investors, partnerships, or new clients.
It provides a professional and polished overview of your business, which shows your commitment and strategic thinking to potential stakeholders.
Your business plan helps you attract the right people by clearly articulating your target market, competitive advantages, and financial projections. In summary, it acts as a persuasive sales pitch.
- Business Plan Subtitle
- Executive Summary
- Company Description
- The Business Opportunity
- Competitive Analysis
- Target Market
- Marketing Plan
- Financial Summary
- Funding Requirements
1. Business Plan Subtitle
Every great business plan starts with a captivating title and subtitle. Youâll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.
2. Executive Summary
Although this is the last part of the business plan that youâll write, itâs the first section (and maybe the only section) that stakeholders will read.
The executive summary of a business plan sets the stage for the rest of the document. It includes your companyâs mission or vision statement, value proposition, and long-term goals.
3. Company Description
This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement.
You might even add core values or a short history of the company. The company descriptionâs role in a business plan is to introduce your business to the reader in a compelling and concise way.
4. The Business Opportunity
The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can.
This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.
5. Competitive Analysis
Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition.
In the competitive analysis section, youâll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.
6. Target Market
Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.
7. Marketing Plan
Marketing is expansive, and itâll be tempting to cover every type of marketing possible, but a brief overview of how youâll market your unique value proposition to your target audience, followed by a tactical plan, will suffice.
Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy?
This kind of information should guide the marketing plan section of your business plan.
8. Financial Summary
Money doesnât grow on trees. Even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where youâd like it to be in the future will substantiate this section.
Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful additions here.
So, youâve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Whoâs responsible for turning all this high-level talk into results?
The âteamâ section of your business plan answers that question by providing an overview of the roles responsible for each goal.
Donât worry if you donât have every team member on board yet. Knowing what roles to hire for is helpful as you seek funding from investors.
10. Funding Requirements
Remember that one of the goals of a business plan is to secure funding from investors, so youâll need to include funding requirements youâd like them to fulfill.
Considering that global funding fell 61% from 2021 to 2023 , itâs very important to be clear in this section. Include the amount your business needs, for what reasons, and for how long.
- Startup Business Plan
- Feasibility Business Plan
- Internal Business Plan
- Strategic Business Plan
- Business Acquisition Plan
- Business Repositioning Plan
- Expansion or Growth Business Plan
Thereâs no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan thatâs tailored to its needs. Below are a few of the most common types of business plans.
For even more examples, check out these sample business plans to help you write your own .
1. Startup Business Plan
As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.
I think the biggest challenge with the startup business plan is that it's written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.
Because startup business plans expand on an original idea, the contents will vary by the top priority goals.
For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.
Eric Heckstall , the founder and CEO of EDH Signature Inc ., which offers premier grooming products, also suggests keeping your startup business plan short.
âThe traditional business plan can be 40+ pages, which is too large of a document to really be useful, can be difficult for staff to understand, and have to dig for information which most people wonât do,â Heckstall says.
Conversely, a one-to-two-page business plan improves clarity and focus. Heckstall says this format âis easy to use on a day-to-day basis, teams as well as potential investors can understand the purpose and direction of the company, and can easily be incorporated into team meetings.â
2. Feasibility Business Plan
This type of business plan focuses on a single essential aspect of the business â the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:
- A detailed product description.
- Market analysis.
- Technology needs.
- Production needs.
- Financial sources.
- Production operations.
Startups can fail because of a lack of market need and mistimed products. Plus, nearly half of entrepreneurs , founders, CEOs, and COOs report that price sensitivity and evolving market conditions are the number one prospect and customer challenges they face right now.
Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then, the feasibility plan centers on that one product or service.
Zach Dannett , co-founder at rug company Tumble highlights how some business owners take a very idealistic approach too. And forget barriers to entry like regulatory issues in the process.
He adds how considering this aspect in their business plan helped.
Before launching the team, Dannett first took time to understand regulatory requirements in our industry, checking to make sure we needed to secure any certifications or licenses.
Then, âwe reviewed financial requirements, which would cover initial investments, operational costs, and potential expenses. We then conducted thorough market research to understand our market, how saturated this market is, and identify major competitors with significant market share,â Dannett says
3. Internal Business Plan
Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.
Besides the typical elements in a startup business plan, an internal business plan may also include:
- Department-specific budgets.
- Target demographic analysis.
- Market size and share of voice analysis.
- Action plans.
- Sustainability plans.
Most external-facing business plans focus on raising capital and support for a business. But, an internal business plan helps keep the business mission consistent in the face of change.
You can also reduce your workload by using a free business template that helps you get a headstart on what to include.
4. Strategic Business Plan
Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.
These types of business plans may include:
- Relevant data and analysis.
- Assessments of company resources.
- Vision and mission statements.
It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in.
David Sides , marketing specialist at The Gori Law , highlights how itâs important not to create this plan in isolation and involve key stakeholders from across the organization in the planning process.
âWe make a point of bringing together attorneys, paralegals, and support staff to discuss our long-term goals and how we can work together to achieve them. This not only helps ensure buy-in and alignment, but it also allows you to tap into a wider range of perspectives and ideas,â Sides says.
This way, the strategic business plan can add value by outlining how your business plans to reach specific goals and considering a holistic perspective from the most important stakeholders. This type of planning can also help a business anticipate future challenges.
5. Business Acquisition Plan
Investors use business plans to acquire existing businesses, too â not just new businesses.
I recommend including costs, schedules, or management requirements. This data will come from an acquisition strategy.
A business plan for an existing company will explain:
- How an acquisition will change its operating model.
- What will stay the same under new ownership.
- Why things will change or stay the same.
- Acquisition planning documentation.
- Timelines for acquisition.
Ilia Tretiakov , owner and lead strategist, at So Good Digital , a marketing agency suggests adding a Day Zero Plan. This is a thorough plan outlining the steps you will take the moment the acquisition is completed.
It consists of stakeholder communication plans, critical system integration, quick operational adjustments, and cultural alignment initiatives.
Hereâs why Ilia believes itâs important.
âA Day Zero Plan establishes the framework for the integration process and guarantees a seamless transition. This comprehensive strategy goes above and beyond the typical post-acquisition integration plan, taking care of urgent issues and laying the groundwork for long-term success,â Tretiakov says,
Apart from this, I believe the business plan should speak to the current state of the business and why it's up for sale.
For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:
- What the new owner will do to turn the business around.
- Historic business metrics.
- Sales projections after the acquisition.
- Justification for those projections.
6. Business Repositioning Plan
When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.
This plan will:
- Acknowledge the current state of the company.
- State a vision for the future of the company.
- Explain why the business needs to reposition itself.
- Outline a process for how the company will adjust.
Companies planning for a business reposition often do so â proactively or retroactively â due to a shift in market trends and customer needs.
For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.
7. Expansion or Growth Business Plan
When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.
For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.
This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:
- SWOT analysis.
- Growth opportunity studies.
- Financial goals and plans.
- Marketing plans.
- Capability planning.
These types of business plans will vary by business, but they can help you quickly rally around new priorities to drive growth.
Getting Started With Your Business Plan
At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan â and the business it outlines â will be.
I personally recommend using the feasibility business plan template. It helps me assess the viability of my business idea before diving in head-first.
By completing a feasibility plan, I feel more confident and prepared to tackle the full business plan. Plus, it saves me time and effort in the long run by ensuring I'm pursuing an idea with real potential.
When writing your business plan, youâll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.
Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.
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