learn more about:
development plan
In this part of the business plan, we want you to write more about future targets, how you intend to scale your business, and what specific actions you will need to take in order to achieve these targets. This is the part in your business where you should focus on showing the potential of your business. Beyond the current products and features and customer target group, what will your business be able to do in the future once you have successfully gained traction. Will you expand the variety of your products or services? Will you expand the same products to a new group target customer segment? Note that this section is dedicated to scaling and not “growing”. Read more about their differences below.
Scaling vs Growing
When companies scale they add revenue at a faster rate than they take on new costs. This is different from “growing,”where companies are increasing their revenue equally as fast as they are adding resources to enable that increase.
A company that is scaling may gain $50,000 in new revenue for which they spent only $5,000 on marketing automation tools to allow more efficient marketing to a wider audience. The company’s gains outpaced its losses/costs, allowing it not only to grow but also to scale.
​
Scaling requires both an increase in revenue as well as an increase in efficiency.
“In order for business’ to grow profitably they must devise ways to scale existing business processes.”
Scaling your Business
When planning on how to scale your business, you should use these questions as guidance:
​
-
Who else might be interested in your current product?
-
What other products or services can you provide or invest in creating using your current resources or positioning?
-
How can you streamline certain processes within your current business operations? What can you do to lower costs and ensure maximum efficiency in your business operations?
Who else might be interested in your current product?
Scaling can take on different forms for different businesses. Take for instance, Facebook’s road to scaling. The social networking platform started off as a product exclusively created for students at Harvard University to get to know each other (and to figure out who is single and who is not). They organically expanded to other elite universities across the United States without making any real changes to this base product. A similar mindset can be applied to any business that is tackling a niche market with a niche product. Simply by asking who else might be interested in the solution that you are offering or who else might be facing similar problems?
What other products or services can you provide or invest in creating using your current resources or positioning?
One of the best examples for this type of scaling could be seen through Southeast Asia’s fastest growing application, Grab. Looking back at Grab’s early days, their business model actually revolved around ride-hailing private cars or taxis alone. As the company grew and scaled however, Grab expanded far beyond its original core “product,” first by including new modes of transportation such as grab-bike and later on with the food delivery business. While there are many food delivery services that started much earlier than Grab, their unique positioning allowed them to take a large market share in the food delivery industry in very little time and with little extra costs incurred. Here, their unique positioning stems from having access to a fleet of motorcyclists who would be willing to deliver food and a large user base who are already using their application on a regular basis.
What can you do to lower costs and ensure maximum efficiency in your business operations?
In order to successfully scale, you must also be able to lower costs and increase efficiency. This may come from streamlining, automating, or outsourcing specific operations within your day-to-day business process. What this means is that, for an additional unit of goods that you are selling, you should be spending less and less on acquiring and selling that product.
When looking to increase your efficiency, it is important to identify core and non-core areas within your business. Core competencies represent the business’ competitive advantage and help differentiate why the customer purchases from your business instead of the competitor. By doing so, you should be able to begin identifying which business operations you could outsource (non-core) and which you could explore trying to streamline (core but repetitive operations).
What your Scaling plan should cover
Why
Why would you need to scale your business? In doing so, what objective are you aiming to achieve through scaling your business? Is this merely for monetary purposes or will it cause a positive social impact to solve your targeted problem?
When?
When will you know you need to scale your business? What is the key metric of success that tells you when to grow your business? What does your timeline look like in the 5-year range, especially the financials?
Who?
Who will be affected by this expansion? Who are you helping by expanding your business? In this process of growth, how are the demographics of your consumers changing? If you are reaching your wider target audience, how are the consumers in each market segment different?
How?
How will you go on about expanding your business and acquiring the money needed to run your business? Are you planning on consulting or outsourcing anyone to help with this process? If so, generally who will these people be and how will they help you expand your business and reach your goal beyond profiting to solving your selected problem?
Example
Grab, GoJek, Traveloka
These are start-ups that are quite well-known in South East Asia. Little do people know that they also start small as small startups aimed to solve problems. For example, Grab helps find rides. There are some methods of scaling that these companies commit to in their early stages. ​
​
1. Go Regional Early
These companies went regional and aimed to conquer the promising market in SEA. Their strategy is to commit to localization and acquaint the people with their businesses early where there are still no or small competitors such as Lazada and Grab.
​
2. Dominate, Expand, Consolidate
Begin by dominating the 1 country before expanding into other countries. Consolidate by grouping businesses together to acquire large market share such as Topica, Gojek, Traveloka.
​
3. Go Global
Companies that went global normally have an operational headquarter in one country but expand their target consumer worldwide. This method is common in Europe but not as prominent in SEA.
​
​
Ultimately, the key to scaling is localization by outlining their plans to find local connections and partners, conduct market research, and communicate their product or service to cater the best user experience possible.
​