There are plenty of stories out there about successful entrepreneurs who say that their business started off with just an idea jotted down on a small piece of paper, or something similar to that. But in reality, how many of these businesses evolved into massive successes without a proper business plan?
Perseverance and risk-taking are all a part of being successful, but just going at things blindly will not get you very far. A business plan helps you answer important questions such as what is the best business model, what are the business’ short and long-term goals, and how can you go about achieving said goals?
Beyond that, business plans can also help to put things in perspective, allowing you to find gaps or inconsistencies in your company’s vision. With that information, you will gain valuable knowledge about your business strengths, weaknesses, opportunities, and threats.
How to create a good business plan
As with all things, the best thing to do before you get started is to define your business. This might sound obvious, but you might be surprised at how many people try to start a business without really knowing or understanding what it is they want to do. Ask yourself these questions:
- What are your business goals?
- What are your core products or services?
- What needs does your business address?
- Who is your target market?
The clearer you state your goals and direction, the easier time you will have trying to grow your business.
Research your market and industry
Research is key to creating a great business plan. You will need a good understanding of your industry, as well as what it is that your target market is looking for. This knowledge will also prove useful in identifying your competitors and their strengths.
There are a few ways to go about researching. The first and easiest way is to simply Google it. Start by typing in keywords related to your business and see what comes up. This can lead you to industry specific websites that can provide you with more in-depth information. Another great way to research your industry and competitors is to attend trade shows and events. Not only are these excellent networking opportunities, you can also get a first-hand look at what your competitors are up to.
Setting realistic goals
After you have done sufficient research, you can start putting your business plan together. Begin by outlining your business goals and objectives. These goals will need to be realistic and reasonably achievable. It should also be specific, time-bound, and aligned with your company’s overall mission and targets. Here are some extra tips to set realistic goals:
Start with your company’s mission – As mentioned previously, your goals and objectives should be aligned with your company’s overall mission and goals. Set these up early so that you can easily identify if you are straying from your intended goals.
Apply your research – After you have completed your research of the market and your competitors, you can design goals that fits current industry trends
Get input from your team – Your team is a valuable resource, not just because of the work they do, but also the ideas and perspectives they can provide. Additionally, they will be more likely to buy into and support goals and objectives that they help to create.
Maintain flexibility – Be flexible with your goals and objectives. The world is an unpredictable place. Markets can suddenly take a turn for the better or worse. As such, you will need to be able to adjust your goals accordingly.
Outline your marketing strategy
Your market strategy needs to be hand-crafted so that it can help your products and services reach your target market effectively. As such, you will need to put much consideration into your budget, target market and the best channels to reach them.
Identify the needs of your customers and focus on how your products and services can address them. You will need to devise a combination of offline and online marketing tactics such as SEO optimisation, social media marketing, and traditional marketing.
Based on this marketing mix, you can set an appropriate budget for the marketing team while also forecasting returns on investment for each tactic before making the final decision. Once you have a solid marketing strategy in place, you can begin to implement it. Remember to track and fine-tune your marketing strategy as needed.
Describe your offerings
Convincing people that your product or service is worth the price is incredibly difficult. You will need to be able to entreat customers with your description, carefully explaining what your product is, how it is unique compared to other similar products, and how it can benefit your customers. Here are a few tips to keep in mind when describing your product:
Keep things simple – Simplicity equates to easier understanding, which in turn means easier to remember. Use simple language that everyone can understand and avoid any unnecessary jargon.
Be clear and concise – Get straight to the point with what your product does and how it differs from others. Don’t go into too much detail at first. Once you hook a customer, then you can explain in more detail.
Be realistic – While it is important to highlight all the benefits of your product, make sure that you do not oversell it, especially if you can’t back-up what you say.
Make use of data – If you have data from market research that can back your claims, then include it in your pitch. This can be things such as customer testimonials or sales figures.
Create a sound financial plan
While a business plan offers you a road map towards reaching your goals, a financial plan offers a guideline that ensures your business stays afloat while reaching for your goals. A good financial plan requires you to have a clear understanding of your current financial situation. This includes things such as revenue, expenses, assets, and liabilities.
Your financial plan will need to ensure that your business has enough capital to sustain it until it becomes profitable. This can take awhile and may require some upfront investments from either you or outside sources. Other than that, always ensure that you have some sort of contingency plan outlined within your financial plan. Things will not always go smoothly, and a contingency fund can help make sure your business survives any unforeseen disasters.
It also goes without saying that your financial plan must be as flexible as your overall business plan should the above situation occur.
Speaking of contingency plans, risk management also plays a huge role in any successful business plan. A small business or startup tends to face much higher risks compared to larger companies. As such, it is imperative that you identify as many potential risks to your business as possible. This can be done by conducting a risk assessment. Once identified, you need to determine how likely these risks are to occur and how it might impact the business.
Following this, you need to come up with several solutions to implement to help deal with the risks. The solutions do not have to resolve the issues immediately, but it must mitigate it well enough so that your overall business plan and realign its goals without devastating results. For example if your main supplier goes under, you need to be able to switch to a backup supplier as soon as possible.
Creating a business plan is one thing, implementing it is another thing entirely. Don’t create a business plan just to let it gather dust on the shelf. Assign the appropriate people to get it implemented and set deadlines to ensure that it is being carried out. Make sure that the plan is accessible to everyone in the company and make use of it to keep track of your organisation’s progress.
Read More: The Real Cost Of Starting A Business