Writing a business plan
Writing a business plan is vital if your business is to succeed. However, before you do this you need to make sure your business has a chance of working.
First of all, you need to find out if there is a market for your product or service – will customers be willing to pay for what you are offering them? If they are, is the gap in the market big enough for you to make enough money and therefore make your new business to be a success?
In order to determine this, you will have to spend a considerable amount of time undertaking market research.
If your findings are positive, you will then have to think about how you are going to reach your target market in terms of pricing and PR. It’s important you pick the right strategies in order to achieve this.
To help you do this, analyse your potential customers. How do they behave? What type of customers are they? Where do most of them shop? How much disposable income do they have and how often might they be expected to buy your goods or services?
Make sure that the amount you are charging for your product or service is affordable to your customers, but also high enough to cover the cost and make a profit.
Your business could be doomed before it has even started if you do not carry out enough market research. Even if you have a wonderful idea, your business will not take off if you do not invest enough time in planning and researching.
Execution is key, and you are unlikely to succeed if you do not gather sufficient information from the outset.
How do I conduct my market research?
It’s a good idea to gather both primary and secondary data. Primary information is that which you collect yourself, whereas secondary is data already collected and published.
You can gather most of this research yourself for free, and take the form of either quantitative or qualitative data.
Once you have done this, you may find you have to change your original plan to suit the needs of your customers. It’s important to consider all your findings, rather than just proceed with what you feel is the best plan.
Collect as much information as you can so you have a clear and reliable picture of your market, and fully understand its needs. This way you will have a better idea of how to meet them and therefore your business being a success.
How do I know if my business idea is viable?
First of all, you need to find out if your business idea is original or not. If it isn’t, and is just building on an existing concept, you must ask yourself whether there is room for you in the market.
It is not impossible to eventually become a market leader in your niche.
One way to test your business plan is to carry out a SWOT analysis. If you have not heard of this term before, the acronym stands for Strengths, Weaknesses, Opportunities and Threats.
This will allow you to see the good sides of your idea, and where the weaknesses and/or disadvantages might lie.
If you feel your idea could be easily copied by someone else, protect your brand and product with a trademark and a patent.
Investigate all the different avenues you can exploit for a revenue stream. These include selling advertising space, customer subscriptions, pay-per-click advertising, and product/service commissions from other companies.
This will increase your chances of making a profit from the outset.
What is a business plan and how do I produce one?
When you are putting together your plan, there are certain elements you need to include.
You will have to decide how you are going to develop your business, when you are going to develop it, and how you will manage the finances.
Here is a list of sections you should include in your business plan:
Executive summary – this is a general overview of the business you wish to set up. It’s important you spend time thinking about how you will write this, especially if you intend to raise money from investors. They will lend quite a bit of weight to this, and thus judge your business plan accordingly.
Brief description of the business opportunity – this explains who you are exactly, what you are selling, why and who you hope to sell to.
Marketing and sales strategy – here you should explain why you think people will want to buy what you are offering, and how you plan to sell it to them.
Management team and staff – this includes your credentials and the staff you plan to recruit to help you run your business.
How you will operate – this should detail the premises you intend to work from, any production facilities required and your IT systems.
Finances – here you need to explain how everything laid out in the previous sections will eventually result in a profit.