Imagine embarking from the confines of your home and jumping into your car to take the road trip of a lifetime. You’ve always wanted to see something new and experience the sights of a driving adventure. Driving off into the sunset with no particular destination may sound romantically appealing and it may just very well, work out to be the most amazing time you’ll ever experience. But, the more likely outcome is that you’ll get lost, you’ll miss out on the best places to eat, you won’t maximize your time soaking in all the sights and you’ll regret doing this exercise so much, that you’ll never want to try it again.
Analogically speaking, this is similar to taking that leap of faith in deciding to be your own boss and starting your own business. You may have an idea of what business to start off with but without directions, logistics, finances and guidelines, you will most likely find yourself sunk in a few months or probably even a mere matter of weeks. Deciding to start up your own business isn’t just a leap powered entirely by faith; it is a life-changing event that takes serious commitment. Commitment that necessitates detailed planning to make sure you have a map on a metaphorical road fraught with the contrasts of peril and of beautiful scenery.
A business plan can be a daunting task to put together. But not knowing where to start shouldn’t be a problem. It’s better to be lost while crafting your plan versus being adrift when you’re in the middle of the business game. We’ve put together an in-depth guide to help you better understand what is a business plan and how to write your own today.
1. Determine your business’ destination.
Antoine de Saint-Exupery once said that, “A goal without a plan is just a wish.” This sums up the whole point of crafting the plan, without an end-goal you won’t be able to thresh out the details that compose it. Make sure you create a very specific and measurable success factor marked as your goal. Ensure you provide an adequate timeline to achieve this as well. As a business plan example, going into the business of food service, you will need to determine a destination point for your enterprise. Would you want to be a five-star catering service, a fast food joint, or a casual dining establishment? How many branches and how many customers would you want to service, in say three years? Mapping out that destination allows you to figure out which roads and which car you’ll use to get there.
2. What is your product?
The product you are offering, whether it’s a nifty, new invention or whether it’s a cutting-edge revolutionary service model, is the lifeblood of your business. This is the point where you formulate the customer need, an area you can establish your expertise in, and determine what you’re going to provide. One important discipline you need to establish in your business plan is providing not only the scope of your product but its limitations as well. Businesses that limit their offerings especially during their sensitive infancy gravitate toward providing a quality product with the least cost and gets you recognized and builds your regular customer base.
3. Survey the lay of the land.
Doing your homework and research to determine two major factors that will make or break your business are imperative steps you need to include in your plan. The first factor to consider is the market for the product you just determined. Knowing how much the pricing goes for that product is essential, as well as knowing the caveats as to where a product like that has seen success and has seen failure. Looking into the market, its history and analyzing it intently is extremely important because it allows you to learn from where others made it or busted it.
The second factor to consider is your competition. Knowing competitors and their offerings are beneficial to ease your entry into the market and may allow you to strike at an area they don’t provide or are faring poorly in. This information coupled with the knowledge of the market will help you determine the path your business will need to take. So in our earlier example, if you decided to take on the role of a beachside café specializing in premium coffee roasts, you’ll need to know who else is on the beachside. You’ll need to know if their product is great and then determine if you want to take that product head-on or find a way to provide a product they don’t have that the market is thirsty for.
4. Plan to make an impact and plan how to get your product in your customers’ hands.
If you’ve conceptualized an innovative product or service, it’s of no use if no one knows about it. This is where it is essential to promote your product and introduce it into the market. Marketing your product can take many forms but you will have to target a medium wherein your projected customers indulge heavily in. The objective is to convince as many people as possible of your product with the least effort and cost. If your beachside café caters to a lot of dog-walking young women, then you’ll need to find a way to reach them. Placing flyers in their favorite nearby grooming shop is a start, posting blogs and social media awareness with those keywords are also a great way to get your product out there.
You’ll need to outline how to get the product over to them. Finding out the right price is a start to this exercise. You’ll need to arm yourself with what you know in the market analysis and competitive analysis along with them scope and limitations of your product to know how to price it. Remember, to run a thorough financial study as well so you are making a profit. This is also where you list down all the logistical necessities to make sure inputs, productions, processes and the output and selling are all covered in your business plan.
5. Know your numbers.
It is absolutely important to crunch the numbers and map out your forecast over the next three years at the very least. You’ll anticipate all your expenses from acquiring raw material to get your product going to the operational expenses involved in your daily operation to how much you will need to invest to get started. These inputs will determine the price you need to put together and will help you track the success of your business and make the necessary adjustments or expansions. Remember to also plan for failure points and you will need levers to pull in case of shocks in the business and the market. Stay faithful to this exercise and you will definitely succeed.
Business planning doesn’t take so much acumen as it leans more towards common sense. The plan isn’t the be-all-end-all though because execution of this plan is just as important. Best of luck! If you’re after more small business tips like these, check out the rest of the Saxons blog today.