Starting a New Business With Basic Planning : Why would you want to write a basic business plan instead of a more complicated one? Most business owners I know struggle with the idea of writing a massive plan for their business. Honestly, writing a plan for anything, let alone a business you own or want to start, is challenging because…
1. we don’t know where or how to start
2. we want our plans to be perfect the first time we write them down – like, we don’t want to make mistakes
3. We don’t like writing – and let’s be honest, writing a plan involves writing.
I will share with you how to overcome each of these obstacles. But before you do anything, allow yourself to break down the business planning process into small steps.
The first step is to have a basic plan that will form the basis for a more detailed and comprehensive plan at a later date.
How to Start Writing Your Plan
What goes into the basic plan? Alright, let’s define the basic plan first as a plan for the big plan that you will achieve later.
Here are the important questions you need to answer:
1. What do you hope to gain by writing this plan?
Is this plan an internal plan that you will use to guide yourself or your team towards achieving specific and measurable targets? Or do you aim to attract potential investors? Is this something you want to take to the bank to apply for a loan for your business?
Start by examining what your specific goals are for writing your plan.
2. Who will review my plan, and what do you want them to do with it?
You need to identify who will actually study your plan, and what they will do with it. If you are alone, then it will be a little easier to answer this question because the answer lies within you.
However, if you’re writing your plan for others to review, and assuming you’ve answered #1 above, you’ll need to do some background analysis.
Start making a list of names or titles/positions of the people you expect to review your plan. Then, for each person, brainstorm how you want that person to react to your business plan – what they should do with it.
You can do the same for investors – do you know the business owner? Ask them what they would be looking for in any business venture they would invest in, and specifically what they would be looking for if you wanted them to invest in your business.
3. What is the core product or service that your business offers to buyers?
To answer, write down the product or service you want to offer as simply as possible. We will answer more detailed info about it in the following questions.
4. Who are the ideal customers for this product or service?
Really, ideas for businesses are a dime a dozen. You often hear people talk about a great business idea they have, but they rarely back it up with evidence that there is a customer for such a product or service, and that the customer is willing to pay.
Try to be more specific in creating your buyer profile. For example, does your product or service cater to men or women, or both? What age groups or income levels are served/attractive? Is there a geographic area that your product or service will supply?
5. Is there enough demand for your product or service?
This is something you will want to investigate in more detail as you develop your business plan. However, at this point, it is important to do some preliminary research. A search on Google, Hoovers or Bizminer will help you learn about a specific industry, and you can often trace your research to a specific state or city. Your search on Google is free of course, but you’ll often find small investments on sites like Hoovers or Bizminer, you’ll get meaningful data for your market vertical, which you can analyze quickly.
It’s also not a bad idea to survey shoppers about their buying behavior and perceptions of your product or service. Putting together a questionnaire or focus group can give you some useful insight into how potential buyers are reacting to your product or service.
If it makes sense, consider trying the product or service, then follow up to evaluate user expectations and experiences.
If you have no demand for your product or service, it doesn’t matter how good it is, right?
6. What existing problems or needs does your product or service solve for your customers?
This is one of the most important questions to answer, because at the end of the day, your product or service is only available to you unless it clearly and uniquely solves the problem or need the buyer is facing.
For example, your product is a software application that helps you manage finances and taxes. There are several apps on the market that already do that. So, what does your app do that no one else does? Is it better on features, is it faster? Is it safer? Is it more user friendly? Is it more portable? Does it really help someone save money or increase their net worth?
Can you see why clarifying the solution you are offering to your target market is so important?
7. Who are your direct and indirect competitors?
You really should get at least an initial understanding of who else is offering similar products or services to your target market. It’s good to know how their product or service is currently being used and perceived – why people buy it, and why not. In this way, you begin to understand your competitors’ strengths and weaknesses from a consumer’s point of view.
Depending on your product or service, you can find all kinds of information about user experiences with your competitors’ offerings. Sites like Amazon allow you to view product reviews by customers who purchased the product.
8. What do you need to make your business grow, and at what cost?
This is arguably the most painful part of business planning. But what’s the point of having a plan if you don’t know how it all adds up financially? You may not know how to combine all the numbers yourself. If that’s the case, invite or even hire someone to help you sort out the numbers.
In addition to the potential income earned from selling your product or service, you should know your fixed costs – how much it costs you to run your business regardless of whether you sell goods or not, and your variable costs – how much you spend on each item. sold.
Naturally, in the early stages of business planning, you will be doing a lot of forecasting, and your numbers may not be as accurate as you would like them to be. So you need to be as conservative as possible about how much revenue you will generate and how much it will cost to run your business.
9. Put your plan into action – what key steps do you need to take?
At some point, the plan had to work! A plan is no good if it doesn’t help you take action. So a simple plan of action should be included – what needs to be started and completed, when and who will do it, all need to be mapped out at least at a basic level.
Having an action plan will also help you get excited about your business venture, as you can see how it is becoming a reality.
10. How can you improve your plan?
Once you have answered these questions, you have a basic blueprint of how your business will look in its early stages.
Remember, your first step is to prepare a basic business plan that serves as a foundation. From this foundation, you’ll want to explore further areas that require more analysis and testing, while some aspects of your business venture simply require you to get started and gauge how things are going.