Business Plan:15 Ways to Use
Apr 01 2023

What is the purpose of a business plan? It all relies on the stage of your organization and your particular business requirements. If you’re just getting started, you’ll utilize a business plan to manage risk and get through any first uncertainties and concerns. If you’re looking for money, your business plan will be used to sell yourself to potential lenders and investors.

A thorough strategy, when properly designed, will assist you in effectively starting, running, and expanding your firm. Of course, this is only a brief explanation of what a business plan is used for. Let’s examine and clarify the functions of a company plan at each level of development.

Utilize a Business Plan and Obtain Exceptional Value from It

Your business plan should assist you in exploring, defining, and connecting when you are beginning a new venture. You’re deciding what kind of business you’ll run, who your target clientele will be, and how different parts of your company will function. Here are the main strategies for using a business plan to launch your company effectively.

Assess And Refine Your Company Concept

Is your business plan legitimate? Should you even try to do that? Will sales be sufficient to pay for expenditures and expenses? Who else is acting in a similar manner?

You may get the answers to these important queries with the aid of your company strategy. It helps you make appropriately educated estimates for every aspect of your organization. This entails preliminary budgeting and defining projected revenue, cost of products sold outlays, and cash flow. Also, you’ll establish your strategy, tactics, significant milestones, and success indicators.

Making a strategy and evaluating it will help you be prepared and reduce risk. You don’t have to have everything developed flawlessly. But, you should be knowledgeable enough to assess the worth and viability of your concept. Before you take the chance, shouldn’t you be allowed to record these for yourself?

You want to keep things brief and straightforward. Start with a lean business strategy, which consists of some lists and forecasts with bullet points. Use it solely for yourself and your team; don’t show it to anybody else. Your ultimate objective is to be able to respond to the major issues. Is this truly a wise decision? Will it function? Are you able to accomplish it?

Clarify Your Objective And Branding

Not only can creating a business plan aid in the evaluation of your business concept. Also, it guarantees that you’re describing the fundamental aspects of your organization that enable customers to respect, appreciate, and identify you. Your company objective, value proposition, and branding all fall under one umbrella.

What matters most in branding is how your company appears and feels. Then, your mission statement aids in defining what your brand represents. When this happens, your value proposition formally establishes how your goods and services successfully benefit potential clients.

Attempting to please everyone frequently leads to failure. Making these in advance concentrates your attention on the appropriate individuals. You develop a knowledgeable brand position that is intended to appeal to and resonate with a particular audience through thorough market research.

Recognize Any Professional Shortcomings

This will establish a clear link between the hiring of specialists and your startup plan and milestones. This will enable you to choose the ideal moment to hire extra personnel. Also, it will demonstrate to investors that you are proactive and aware of your limitations.

Establish Mentor Connections

An excellent way to start working with mentors, counselors, and business development groups is with your company plan. The finest illustration is seen in the United States, where more than 1,000 Small Business Development Centers provide courses, counseling, and mentoring for owners and entrepreneurs of small businesses. They highly value having a business strategy as part of the engagement with business owners.

In addition to these official connections with mentors, there are casual connections that may eventually develop into mentorship. It can be a different business owner, someone you’re pitching to, a worker, or someone you meet at a networking event by chance.

Here, your business plan may be an excellent resource for outlining your venture to potential partners. Simply have an edited, condensed version of your strategy, or even just the executive summary, available to distribute.

Interact With And Work With Vendors

Company owners manage their sourcing, suppliers, contractors, and inventories using predictions and financial statements. You’ll plan for sales and spending, evaluate actual results, and make adjustments as necessary.

Examining your predicted sales and expenditures regularly will help you make smarter purchase selections and manage your inventory. An excessive amount of inventory might be costly. Production and sales might be harmed by too little.

Approaching suppliers and vendors will be considerably simpler if you are aware of the situation of your finances. You’ll be ready to debate expansion ideas, bargain over the cost of goods or services, and make adjustments to inventories. Even suggesting a strategic collaboration with a supplier may need a significant portion of your company strategy.

Making sure you are completely prepared for these interactions is the key to the value of a business strategy in this situation. When you suddenly start losing money or acquire an overabundance of merchandise, you are not in a panic.

How To Apply A Business Strategy When Looking For Finance

The search for capital is a necessary stage for the majority of established firms. It might take place early on in a business’s existence to aid in its launch. Also, it can be years before a company needs to reach a higher degree of growth. Here are some particular methods by that you may show your company plan to potential investors and raise money using it.

Clarify Your Finance Requirements

I’ve worked as an angel investor for years, and I’ve seen plenty of attempts to raise capital go flat because business owners and entrepreneurs don’t know how much money they need. Investors are always interested in your financial needs and intended uses. Bankers anticipate that you will apply for loans up to a certain amount.

You must know how much financing you need before applying for a loan or making a pitch. You may determine that sum using the business strategy. Also, it will show why you require the funds, what you plan to accomplish with them, and how they will benefit the company.

Your educated assumptions on sales, costs, expenses, and cash flow serve as the basis for this procedure. Heave a sigh of relief if your estimates show that you can survive without other people’s money since you won’t require investment or loans.

Organize Your Investor Pitch

I’ve witnessed founders lose a pitch because they were unable to respond to typical inquiries. such inquiries as:

  • What do you anticipate spending on marketing will be?
  • How much do you make in profit?
  • What is the assumed headcount?

This may be the end of your chances of getting money. If you don’t have a strategy to support your pitch, investors will be able to tell right away. The idea that investors don’t study company proposals must also be debunked. The reality is that investors frequently reject proposals based just on summaries, without really reading the whole plan. But, they require the whole business plan to help them with their due diligence if they approve of the proposal, summary, and pitch.

I saw an investment being made without investors carefully reviewing a company proposal in my twelve years with an angel investing organization. In short, you must have a written business strategy. That will improve your pitch and make it much simpler to go to the next round of raising money.

Controlling Awarded Money

A company strategy not only aids in obtaining capital but also in managing it well. This will be described in an initial usage of funds report, and you will actively include investors in the continuing company planning procedure. This allows you to better utilize your investment rather than being compelled to stay to the plan you originally had in mind.

Keep track of results, including execution and key figures. Regularly review those findings and make any required revisions. Follow that procedure to notify your bankers or investors as needed. In this way, when questioned about your financial accounts and business plan, you won’t have to rush to put them together.

How To Manage And Expand Your Firm With A Business Plan

Your business plan’s finest and most frequent ongoing use is to direct, manage, and expand your enterprise. You should utilize the business plan to improve how you manage your company. See your company’s business planning as a system similar to your car’s GPS.

The destination is the long-term objective. The route consists of the strategy, tactics, execution, and necessary funds. Driving involves making decisions based on monitoring and analyzing real-time data. They assist you in deciding whether to change your course or stick to it.

Understanding this business plan’s main purpose will help you concentrate on what your plan needs and doesn’t require. Instead of using a lengthy formal business planning document, you might choose to operate with a lean business plan. The following are the main applications of your company strategy for management and expansion.

Make A Plan And The Strategies You’ll Need To Carry It Out

Clarify your strategy in your company plan, choose the techniques that will best support it, and keep tabs on your implementation. There’s no need to provide lengthy written explanations. Just using bullet points to summarize and serve as a reminder of the important ideas in your strategy will be enough.

Consider this a tool to help you stay focused. The majority of business owners and entrepreneurs desire to take all possible measures to satisfy every client. I most definitely have with my business. But, we discover in the real world that tiny enterprises are subject to the concept of displacement. What we accomplish disproves our limitations.

Tracking And Evaluating Company Performance

Although it warrants its attention, this is closely related to developing your plan and tactics. You may use your business plan to define milestones, KPIs, and success measurements, among other things. It’s also a crucial tool for regularly monitoring and evaluating this data.

By placing these indicators squarely into your plan, you can be sure that you’re always connecting physical performance to your overall strategy. It greatly simplifies the process of finishing performance assessments and modifications. Also, it makes it much simpler to prepare your strategy for a professional pitch should you require funding in the future.

Examine Potential Outcomes

In the event of a disaster, you may quickly create an emergency response strategy using your plan. For instance, business owners with established business strategies were able to respond far more swiftly when COVID altered everything practically overnight. They may consolidate strategy, tactics, measurements, milestones, and critical forecasts by using their plan as a performance dashboard.

These proprietors were able to immediately assess reasonable assumptions regarding a drop in revenue and then change spending to make up for it. They could change timing, scheduling, and priorities to address the problem since they had a perspective of the milestones that were due and the performance versus KPIs.

Choose The Ideal Period For Growth Efforts

You may utilize your business plan to better position your company to embark on growth projects, just like you would with crisis preparation. You may plan around changes in income, costs, expenses, and priorities rather than assuming you need to increase investment to achieve growth.

For instance, it could be a perfect moment to introduce a brand-new website, a second location, or even a new product. Every one of these endeavors carries the potential for huge benefits as well as the enormous danger of poor execution. You may utilize your strategy in any of these scenarios to better understand the effects of adding a website, location, product, or anything else to your organization.

How soon do you need to start seeing results? What ROI is required for it to be successful? Do you now own sufficient funds to invest in it?

With the help of your company strategy, you can respond to each of these queries and fully capitalize on expansion possibilities.

Revise Your Strategy In Light Of The Outcomes

The first stage is to track your strategy, tactics, and execution using your company plan. The next stage is to regularly examine your strategy to keep a clear perspective on your actual results.

Reviewing your strategy and keeping tabs on the results is important so you can steer your business and make necessary course changes. A plan vs. real business plan comparison is ideal in this situation.

You will always be faced with the choice of whether to alter the strategy or the execution when a business plan review produces outcomes that are not what you had anticipated. When outcomes surpass your expectations, you must determine whether to alter your strategy to capitalize on the positive developments. When you receive negative news, you must determine whether to adjust your strategy or merely improve execution in response to your displeasure.

In any event, utilizing your strategy in this manner requires more time spent evaluating and less time gathering information.

Other Applications For Your Business Plan

There are other unique and less frequent use cases for your company strategy that are not included in this list. A business plan might assist in educating potential buyers in advance if you intend to sell your company. A business strategy can also provide information to parties engaged in a divorce or estate administration. It might help create a continuity plan when a company is transferred to a family member or employee.

The valuation of a firm is crucial for a variety of reasons, including sales, legal disputes, and taxation. Each of these use cases focuses on how to simplify the legal processes involved in buying, selling, or transferring a firm. In these situations, having a prepared business plan might assist you to avoid having to do any more work, just as how having one helps you get ready to request finance.

How Can You Be Sure To Carry Out Your Plan? 

The greatest method to achieve your goals for your organization is through business planning. It synchronizes strategy, tactics, business operations, and teamwork, and it prioritizes outcomes. Beyond the fifteen examples given here, you’ll probably discover many more specialized use cases for your own company.

There are many other kinds of company plans available, and a formal business plan paper isn’t always necessary. You should begin with a straightforward Lean Business Plan if your primary goal is to use your plan as an internal management tool.

Download our Lean Plan template if you’re ready to start utilizing your company plan as a management tool. You might want to have a look at Live Plan for a step-by-step lean planning approach that ties your plan, finances, and predictions together.

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