Thomasina R. Legend
Creating and writing a business plan is crucial in developing any creative idea to ascertain its viability. A business plan should not be considered something you put on the back burner or something you do last minute. A business plan should be your priority as soon as the thought of setting up a business spring to mind, even if it is something you will be committing to part-time. Having a business plan and working on it will help you identify and focus on the necessary steps you need to take to make the business successful. At the same time, it will give you the ability to identify and outline your short and long term goals and objectives. The business plan will become the blueprint of your brand, which can continually be updated as the business grows. This will inevitably improve the business’s chances of succeeding because you are now working on detailed specifics. So what should your business plan entail and include? Every business plan should include the following;
Description: The first thing to do is define your business. Use this space to give a thorough explanation of your business concept. Doing this puts you in a better position to achieve results because you know what you want your business to do and what services you provide. While defining your business, outline your marketing position statement and your USP, which stands for Unique Selling Preposition. These are two fundamental aspects that you need to state within your statement. A marketing position statement outlines what you do, whom you do it for, and how it solves an urgent need in one or two short sentences.
In contrast, a USP statement shows readers and yourself what sets your business or what you provide apart from the ever-growing overcrowded market. Your USP is your selling point and has to be strong enough to compel customers to come to you instead of your competitors. Not being able to thoroughly define your business and outline what sets you apart from the crowd could ultimately cause your business to fail. Take the time to structure and better understand your business, what you want to do, how you want to do it, if it provides a need, and most importantly, how it sets you apart from the crowd.
Target Audience: Knowing whom you are providing a service or product to is essential and integral to the success of your business and brand. Most people gravitate towards a one size fits all mentality in business, but this is a detrimental way of thinking. It is vital to research to know your target audience well because in doing so, you get to understand how to communicate and reach them directly. Things to consider when researching your target customer/audience;
· Gender/age range: do they fit a specific gender or age range?
· Income: What’s their income bracket? How much are they willing to spend? Can they afford what you have to offer?
· Issues/problems: What need do they require solving?
· Values: what common opinions, attitudes, values, and behaviours do they share?
Try to ask specific questions that will narrow down your target audience even further. This will enable you to be a lot more focused and driven in specifically marketing to them. Having a concise target market and focusing on providing service and a need for them will help alleviate costly marketing strategies that entail marketing to everyone and anyone. Be specific in whom you are marketing to and providing a service for, so you can be successful in the long run.
Market Research: This is where you need to conduct thorough market research to understand the major forces that impact every business, and yours won’t be an exception. Some major external forces that affect every business are: how long they have been in existence or operation are existing competitors/competition, the threat of new competitors, availability or open market for substitute products or services, the bargaining power of manufacturers and suppliers and the bargaining power of its customers. Understanding these forces will enable you to determine and comprehend the environment that impacts your business. It is not enough to only know about the competition and what their services are. You also have to research and look into the demand and supply of the raw materials, labour and manufacturing. Think about and research how political and legal issues may affect your business and how to adjust accordingly. Utilise online survey platforms to reach your audience and ask them the questions that matter. You can also organise focus groups to discuss with potential customers face to face and know what they think about your ideas and if it caters to their needs. This gives you insight into what they think and if they like your concept and your branding. The focus group can also contribute their ideas on making your brand more tailored to them the consumer.
A lot goes into market research, so take the time to do an in-depth search and be well versed in knowing what you are getting into. Do not rush the process.
Competitive Strategy Planning: This is where you have the chance to create a competitive strategy to demonstrate the viability of your business and how you can strategically have and sustain a competitive advantage. There are three unique strategies to look at within this space; differentiation, cost leadership and focus. As a small business just setting up, it is generally advised to go for a ‘focused strategy’. With a focused strategy, you get the opportunity to outline how you will grab the attention of your target market/audience. To aid you in doing this, identify the marketing strategies or tactics you put into achieving and generating customers and sales. Ensure you outline every task you will do by yourself and what tasks would need to outsource. These questions will help you create a more focused strategy. You are also advised to research this area to understand it more, and if you can get help from someone who knows what they are doing, especially with business plans, seek help and take advice.
Financial Projections: Every business plan must have financial projections. Financial projections are actual estimates of future financial outcomes of your brand or company. Using estimations of financial data to forecast how much your business could potentially bring in, in the future helps you know if the business will make a profit or loss, especially after your daily expenses are applied. Your projections should include how many customers you think your business will attract daily, weekly or monthly and how much they could potentially spend. When creating your financial projections, it is crucial to make room for unexpected price surges, logistic costs if you import any of your raw materials, rise in raw materials etc. If you can afford to pay an accountant or hire an accounting firm to create your projections, do it. If not, take your time to research how to make financial projections and be as realistic as possible. Creating projections that you know will only look good on paper and are unattainable only hurts your chances of succeeding in the long run.
With these in mind, it should be a bit clearer on the steps you need to take. Numerous business plan templates are available for download from the Internet. After writing your business plan, it is always a great idea to share with family, friends or people within the business sector to see what they think and make adjustments as you go. A business plan is something you can always amend, adjust and change as you grow your business.
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