Every company needs a strategy. But how do you go about getting your plans down in a written form?
If you’re serious about launching your own enterprise, you’ll need to have a solid business plan in place. Below, we have listed ten steps you can follow to ensure your business plan covers all the bases.
Why do you need a business plan?
You may be baffled as to why you require a business plan in the first place, especially if you already have a clear vision of what your business will look for. You may be familiar with the market and possess the relevant abilities, so, why invest time putting together a formal business plan?
Here just some of the reasons why you should not skip the business plan stage:
- You can benefit from clarifying your thoughts: Putting your ideas on paper offers them shape and depth, providing clarity and an opportunity to brainstorm
- It will help you find and solve problems: It’s possible that the concept you have for your business in mind has some flaws that you haven’t yet considered. That’s why the process of putting your words down on paper can help make any potential issues become clearer.
- It will enable you to seek advice and guidence from others: A well-written business plan can be shared with trustworthy individuals for feedback.
- Investors, financial institutions, and even your accountant may request confirmation that you’re serious about your business. That’s where your business plan provides a solid back-up of the plans and goals you have for your business
- It can help to assist you as your company grows: Even when day-to-day work becomes a distraction, a sound business strategy will help you to keep on track and focused.
It might be intimidating to write a business plan if you’ve never created one before. However, following the ten steps outlined below and you’ll be crafting a great strategy in no time.
1. The executive summary
This is where you introduce your business and the product or service it will offer. The executive summary needs to be succinct to grab and retain people’s attention.
In only a few phrases, try to summarise your company’s objective and mission. Invest a lot of effort in setting your business apart. Treat your executive summary like an elevator pitch—it should be brief and easy to recall.
2. Identify your target clients
Do you have a good understanding of who will buy your product or service (individuals or businesses)? If you don’t, now is the time to do your research to get a good understanding who your target market is going to be.
All investors will be interested in what your target market is so it is important to prepare your responses ahead of time.
Determine whether your clients are individuals or corporations. If they’re businesses, who are you going to target within those enterprises? Is it possible that it’s the salesperson or the CEO?
Decide if you’ll have repeat customers or one-time purchasers.
3. Examine your target audience in depth
There’s no space for guesswork in when it comes to getting to grips with your target audience. You need to identify the individuals or corporations who will be purchasing from you. Consider the following:
- Demographics: Age, gender, and socioeconomics.
- Business features: company’s size, revenue, and services or goods.
- Location: it might be a specific neighbourhood, town, or even nation.
- Profession: perhaps you’re looking for accountants, café owners, professional consultants etc.
- People who share common interests or tendencies.
Your company strategy will be clearer if you examine your target audience properly, giving you the insights you need to steer your business in the right direction.
4. Identify the opportunities
Businesses that are successful think large. The exciting thing is you don’t have to stay small-scale if you’re just getting started. As your company expands, make a list of potential possibilities and opportunities that you take advantage of to help your business grow and succeed.
For example, let’s say you plan to commence an internet-based business. That’s fantastic, but how are you going to attract people to visit your site? How will people find you on the internet? Will you have to hire salespeople? How will you persuade folks to buy from you if this is not the case?
Is there room for a physical retail location as the company grows? What additional options will you have if your company expands as expected?
5. Be aware of the competition
Every business faces rivals. Investors will believe you’re unprofessional – or simply plain naïve – if you don’t identify and know who yours are. Make a detailed list of all of your current and future competitors:
- Who are your direct rivals, or those who sell similar goods to you?
- Who are your indirect rivals, or those whose markets intersect with yours?
- What are the hurdles to entry that will prohibit other firms from competing with you?
- What is the USP (unique selling proposition) of your business? I.e., what sets you apart from the competition?
This final aspect is crucial. You must describe how your company will set itself apart from the competition. This might be based on price, service, quality, selection, or overall value. Make a point of spelling it out.
6. Create a basic financial plan
Financial information should be included in all business plans. This usually contains the whole cost of starting your company. Consider the following aspects:
- The cost of making or purchasing your products
- Labour and manufacturing costs, including raw materials
- Employee expenses, particularly in service industries
- Costs of distribution and marketing
- Overheads, both fixed and variable
A draft financial model may be created by your accountant using accounting software, helping to create realistic projections and a financial snapshot of your business.
7. Include a marketing strategy overview
Consider the five ‘Ps’ while writing this portion of your business plan:
- How will you price the finished product?
- What is your product or service’s position in the market?
- What channels would you utilize to attract and interact with customers in terms of promotion?
- How much profit do you intend to earn?
- What is the location of your sales outlets?
8. Plan the day-to-day operations
For now, put your vision to the side. What everyday duties must be completed in order to manage the business? All business operations, such as production and packaging, should be included. Also, make an effort to include all elements of the value chain, such as sales and customer service.
9. How will you get the right people?
This is one of the most vital aspects. Consider who you want to recruit. How will you identify people who have abilities that are complementary to your own? And how are you going to persuade them to work for you?
Consider who you want representing your business. You’ll need somebody you can trust to coach and advise you when you need it the most.
10. Keep it simple
Maintain a straightforward approach. Complex and lengthy paperwork are unlikely to be read by you or potential investors. A business strategy should be concise, targeted, and relevant.
Stop and take a break if you feel yourself getting carried away while writing. Then review what you’ve written and make any necessary changes. The shorter the better. A decent business plan should be no more than a couple of pages long.
Make a business plan based on your strengths.
Keep your strengths as well as any areas for growth in mind when you construct your business strategy. This will assist you in developing a strategy that maximises your strengths while being realistic. This is more likely to persuade investors that you’re serious about your business.
Your business plan acts as a guide for your company, but it isn’t set in stone. At least once a year, review it and make any required modifications.
Above all, continue to seek input from your advisers, both formal and informal. You’ll be able to design the ideal company plan with their assistance.
Having a solid business plan in place is just the beginning of your new small business adventure. You’ve worked hard to make your business dream become a reality so it makes sense that you would do anything to protect it and keep it safe from any unwanted challenges- that’s where business insurance comes into the equation.
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