Running a Business

5 Questions Your Business Plan Answers to Help Drive Growth

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Kody Wirth

6 min. read

Updated June 14, 2024

Don’t let your business plan just sit there gathering dust. 

If you revisit and update your plan, it can be far more than a one-time-use document.  

Whether it’s a concise one-page plan or a more detailed traditional format, keeping it current helps you stay focused, identify roadblocks, and seize opportunities.

Think of your plan as a living document that evolves alongside your business. A tool that helps you review your performance and answer critical questions that can help you grow.

1. Is now the time to pursue growth or profitability?

Is it time to grow or prioritize profits? Knowing the difference can dictate your focus for the next month, year, or even longer.

Signs you need to focus on profitability:

• •Flat or declining sales and increasing expenses
• •Low gross margins
• •Poor returns on marketing spending
• •Consistently missing financial targets

Signs you’re ready for growth:

• •Consistently surpassing sales goals
• •Healthy cash flow
• •Low debt/risk
• •Proven concept with reliable infrastructure

Either way, a current business plan and financial forecasts are your compass. They reveal where you stand and guide your decisions. Without them, you’re flying blind and making adjustments based on guesswork, not data.

Tip: Use the LivePlan Dashboard to quickly identify opportunities for growth with an at-a-glance view of your financial performance.

2. What are the current trends in your industry?

You need to stay on top of changes in the market by keeping a close eye on the following:

• •Competitors: What are they doing differently? How can you stay ahead or differentiate yourself?
• •Customers: Have their needs or preferences changed? How can you adapt your offerings to meet their evolving demands?
• •Technology: Are there new tools or advancements that could enhance your business? How can you leverage them to improve efficiency or reach new customers?

Revisit your plan’s value proposition, competitive analysis, and target market sections. Compare what you had written previously to the changes you’re seeing now and determine if you’re still positioning your business effectively. 

Starting here is a great way to get a high-level view of your business and then dig deeper into more specific changes around products, marketing, etc.

Example:

A local coffee shop might observe a rise in mobile ordering and the use of payment apps in the industry. By integrating this technology into their business, they could attract more customers, streamline operations, and even offer personalized rewards to boost loyalty.

Regularly revisiting your competitive analysis and customer profiles ensures your business remains agile and responsive to change. Previous versions of your plan can serve as a historical document to track these changes over time.

3. What are the short and long-term goals of your business?

Goal setting is often more straightforward when you’re just starting a business. 

When you’re up and running, these goals become more complicated. You have a business history to work from, possibly more employees, larger budgets, etc. 

Your plan needs to reflect that. 

• •Forecasts should take actual results into account.
• •Positioning, operations, competitive analysis, etc., should reflect your current environment.
• •Milestones should be tied to specific metrics and lead to long-term goals.

Your plan needs to evolve as your business grows and matures. 

You can still have the broad, aspirational goals you made initially. But you need to make the details of your next month, quarter, and year realistic. That way, you can actually reach and surpass the goals you set. 

Example:

A bakery’s business plan might include short-term goals like increasing social media engagement by 20% within six months and introducing a new line of gluten-free pastries by the end of the year. 

Long-term goals might include opening a second location in a neighboring town within three years, and expanding their wholesale operations to reach a wider audience within five years.

4. How scalable is your business model?

This question applies to businesses at the starting, funding, and growth stages. I’m including it here since you typically look for opportunities to scale after you’re up and running. 

Scalability really comes down to increasing revenue without a proportional increase in costs. That may mean: 

• •Increasing efficiency
• •Focusing on more profitable revenue streams
• •Cutting back on less profitable revenue streams
• •Focusing on increasing margins

Or any other activity where the expected return outweighs the investment.

You may have ample cash reserves and high margins and have no idea where to reinvest. You may feel the pain of operational inefficiencies and limited reach but cannot pinpoint why they’re happening. 

You’ll struggle to find these opportunities without at least a one-page plan and updated forecasts. 

Example:

A popular food truck consistently sells out its daily menu but struggles with profitability. Its margins are incredibly thin, and the owner can’t keep up with the current orders, especially during the lunch rush.

Instead of accepting these limitations, the owner intends to cut costs and expand serving capacity. They start by reviewing their financials and identifying ingredients with higher-than-average costs, intending to change the menu or find a different distributor.

They then explore how much it would cost to hire a part-time employee, how many more people they could serve with this support, and how much more inventory they’d need to do it. After reviewing and exploring these scenarios, they plan to make a few changes for the next few months, track performance, and revisit if these actions led to improvements.

5. How will you measure success?

How you measure success is tied to every question about growth. 

You want to know if your efforts lead to the right results. You can’t do that without tying business metrics to your actions.

Say you’re launching a new ad campaign: 

• •What are the expected sales you think it will generate?
• •How much are you willing to spend before you pull the plug?
• •How much revenue do you need to call this a success?

That’s just one example. Steps like hiring multiple employees, opening a new location, or launching a new product line are even more complex. What metrics help you measure success with these?

Again, turn to your business plan and forecasts for the answer. If you’re keeping them up-to-date, reviewing results, and adjusting based on performance, then you likely know what metrics matter. 

If you aren’t doing this, you’ll just be making guesses without any way to tell if a decision will truly have a positive or negative impact on your business.

Writing a business plan helps you answer questions at every stage

Research shows that businesses that regularly revisit and update their plan grow 30% faster than those that don’t. 

That’s because it helps you answer questions about the state of your business. To explore possibilities, quickly adapt to changes, and make confident decisions that drive revenue. 

And the earlier you plan, the faster you can pursue growth, even when you’re:

• •Exploring your business idea
• •Starting your business
• •Pursuing funding

Make planning easier with LivePlan

If you want to create a growth plan that helps answer these questions (and more), try LivePlan.

LivePlan combines your business plan with powerful budgeting and forecasting features to make every effort count. With a single tool, you can go from exploring a potential idea to creating detailed forecasts and reviewing your performance.

Try it out today risk-free.

It’s the perfect tool to start, plan, manage, and grow your business.

Kody Wirth

Kody currently works as the Inbound and Content Marketing Specialist at Palo Alto Software and runs editorial for both LivePlan and Bplans, working with various freelance specialists and in-house writers. A graduate of the University of Oregon, he specializes in SEO research, content writing, and branding.