“If you fail to plan, you are planning to fail”
You’ve probably all heard this quote before, but take a second to let it sink in. It’s actually by Benjamin Franklin and it’s a good one. When you are just starting out in business it is so exciting, and the ideas are flowing, but it can be easy to get lost in the middle of everything and become overwhelmed. A business plan will be so beneficial at that point as it can help you declutter your thoughts and provide a roadmap for the future of your business. It goes without saying that the plan will change over time, and you will have to come back to change it again and again. However, the process of writing it will force you to think through the complexities relating to your business ahead of time.
What do I mean when I refer to a business plan? Well, I’m not talking about a twenty-page document that must be submitted to the bank for a loan! My goal in this article is to help guide your thinking about your business by asking the right questions and creating an effective business plan which will help you to take action.
So, grab a pen and paper and get ready to answer some of these questions!
This is fundamental. Often, people start a business and lose motivation along the way especially when things start to get difficult and quickly give up on their business. Money is an excellent motivator for starting any business, however, for most people money alone is not strong enough. Companies like Apple and Nike that revolutionised industries had passionate founders who had a powerful purpose for their entrepreneurial journey. They had a “why” for their business.
Why do you want to start a business?
In simple terms – a business exists to meet a need or solve a problem. The need or the demand for your solution or service is determined by the market you are targeting. If there is no need for what you are offering, or people are not attracted to your solution, no one will be interested in your business. Simple as that! So you need to ensure that does not happen. To do this you have to determine two vital things.
1. Your value proposition and unique selling point. In other words, why should people buy from you? Are you genuinely giving them something of value? How will your product or service make their life better? What is different about your product or service?
2. Your ideal client. In other words, know who you want to be serving. Who is your product or service for? Is it for men or women or maybe both? What is their income profile? In what age group do they belong? What type of jobs do they have?
Analysing the current landscape of the market will help you gain insights about your competitors. Looking closely at your competition will help you identify trends in the industry. You always want to have a competitive advantage, and you can only achieve this by keeping a close eye on your competitors.
1. Who are your top three competitors?
2. Can you find some reviews about them online?
3. What are their best and worst reviews?
Do not blindly follow the competition. Learn from your competitor’s mistakes and fill the gaps in the market that they are not currently serving. Looking at their negative reviews can provide you with insights on where you should build your strengths.
This is the foundation of your business and answering these questions will help guide your thinking and allow you to take actions.
1. Distribution: Think of the word “distribution” in a broader sense. How will you deliver value to your customers? Is it an online course? Or through a retail shop? Or maybe it is delivered right to their homes?
2. Customer Relationship: How will you maintain your relationship with your customers? Will you need customer relationship management software? How will you gather feedback from them?
3. Core Activities: What will your day to day business activities look like? What are the core activities that will drive sales and bring in more customers? Try to automate any weekly repetitive activities.
4. Supporting Resources and Partners: Do you need any special software for managing your inventory? Do you need to build a website? Do you need to hire employees? Is there any software in the market that can help scale your business? Can you partner up with an influencer to drive growth of your business? Do you need a business coach to guide you?
In the world of business, everything has a price tag. It is essential to keep track of costs, to make sure that your business is making money at the end of the day. The costs will also help guide pricing for your products and services. You can break down each element of what you do and figure out how much each will cost , allowing you to price your service or product accordingly so you will make more than you spend.
When you are just starting out, you’ll need to estimate the number of people who may buy the service or product that you will offer. This will allow you to forecast your total revenue. You should also keep an eye on your cash flow. Do you have enough cash to operate your business? If not, you may need to take a loan, or maybe get a business credit card to cover some of your expenses and pay the balance back once you receive cash from your customers. It may be a tedious job, but it is crucial that you keep track of all your earnings and expenses. Hire a bookkeeper and accountant if necessary.
Financial insights will help you understand your business better, and though I understand it’s not the creative bit we all love, it must never be neglected. For your business plan, you need to create a budget outlining your income and expenses for a year and take note of all your assets and liabilities for that year.
These are some of the main themes of running any business from a high level. As a business coach, I help my clients tackle some of the issues discussed in this article. If you think this has given you value, but you still feel lost or maybe need someone to guide you through some of the matter than I will gladly help you out on your entrepreneurial journey.
So come on over and join me in my group, Fabulous 5%.