This is no different for your business. If you don’t have a formal business plan for your scale-up business, then now is a good time to look at what you need to include to help you create the roadmap to achieve success.
Before you start business planning, ensure that you have your target audience in mind. For example, are you creating your plan to attract investment or apply for a loan, or are you outlining your plan for how your employees will contribute to your growth? Depending on our audience, your plan may have a stronger focus on some areas such as finance, marketing, sales, or operations.
To help you steer clear of common scale-up mistakes such as errors in your financial planning, this article will give you the nine essentials of a scale-up business plan.
1. An executive summary
This is a short, punchy description of your company. You need to make your business stand out, and to do that, you must write what sets your company apart from others in your description.
If you’re not quite sure, this is the perfect time to work it out. It’s essential you know your unique value proposition.
2. A description of what your company does
Now you’ve written down what sets your company apart; you have to get down what your company actually does. There is a nuanced difference between the two. When writing the description, use your unique value proposition that you could develop or articulate in your executive summary.
At the same time, even when your business model is complex, you need to explain what your company does in simple terms. So how do you put your executive summary into action?
3. A comprehensive market analysis
You need to know everything about the industry you’re working in — this includes finding out where the gaps in the market might be, what other companies are doing better than you, and what you’re doing better than them.
Through the market analysis, you can begin to see where you can improve your company and gain an edge over competitors.
4. An outline of your management and business structure
This may be more simple for some companies than others, depending on the size. Regardless of the company size, what is essential is that there is clarity about the structure of your business and management.
Everyone within the company should know where they stand within it and the roles of everyone else. This will create an efficient and productive business because people will know who’s responsible for what and how things trickle down from the Board to the entry-level employees.
5. A list of the products and services you offer
What is the ‘thing’ you are selling? Are you able to describe it in one sentence? Once that is clear, ask yourself if you can detail how it is different from your competitors.
It doesn’t have to be totally unique, but you need to understand why people should use your services or buy your products rather than other companies. This way, you also help the consumer to understand why your business is the better choice.
6. A strategic sales and marketing plan
A huge part of any business is marketing and sales. For some scale-ups, this is often lumped into one department, but it’s worth noting that these two things deviate from one another too.
You may have ticked off every part of the business plan so far with a unique service or product, which is better than your competitors, and you might have a brilliant management structure, but without marketing — quite frankly — you are stuck.
Marketing is how you get the consumer or investor to your door, and sales is how you get the money in. Therefore it is a crucial part of your business plan to create a marketing and sales strategy.
7. A clear amount of funding
In order to scale up, you will need funding. Your business strategy and the development of your business plan should put you in a good place to work out how much funding you need.
You need to assess where you have been as a company and where you want to go. Then, add a timescale to properly quantify the amount of funding you will need — ask yourself, “Where does the company want to be in two years?” for example. Keep in mind that there will be a margin of error, but it’s a lot better than having no estimate at all.
Once you’ve discussed and decided on the amount of funding you need, then you can begin to look at where and how to get it.
8. An insight-driven financial projection
This is important for you to make calculated decisions as a company — for instance, relating to how much funding you are seeking. These projections need to be based on current data from your company and management accounts.
Financial projections are a useful tool for evaluating your company’s progress, which you should do regularly. With your projections, you can see whether you are ‘on track’ or doing better or worse than you aimed for. From this, you can then make decisions to adapt your business plan.
9. Leadership team profiles
To finish your business plan, it is important, especially in raising finance or investment, to have profile details of your leadership team. This would demonstrate qualifications and experience for running and growing your business. This would, in turn, give confidence to those looking to support your business.
This can benefit your business plan because it’s an opportunity to show how serious you are about your company. Having the expertise you need to grow is essential, especially if you show it to potential investors.
If you lack expertise in any particular area, you have the option of enlisting the support of more experienced business executives to plug any gaps and strengthen your Board.
A business plan is crucial to any company that wants to progress and scale-up. It is how you measure success within your company and how others measure your success externally, i.e., partners and investors.
About the Author: John, Founder and CEO of BoardroomAdvisors.co, is a serial entrepreneur having founded 7 different businesses over a 40-year period. He has trained and worked as a strategy consultant, raised funding through Angels, VCs and crowd funding, and exited businesses via MBO, MBI, and trade sale.