Thinking of starting a business?
Has an idea been popping up in your mind?
Well, you will need to write down those ideas and a way to achieve the goal. The importance of writing down every inch of the idea that comes into your head about creating a business can never be over-emphasized. Sadly, most people don’t seem to understand the significance of doing this, they get it all wrong by jumping right into action the minute an idea ticks in their head, and ultimately, they end up wasting valuable resources.
Every business needs to have a written business plan. Your business idea should convince you that your idea makes sense because your time, money, and effort are on the line.
As an entrepreneur, a business plan should be the first step in the process of deciding whether to actually start a business. A business plan must contain all necessary steps to achieve your desired goal, whether it is to provide direction or attract investors. Being able to determine if a business will fail or succeed on paper will save your time and also help you avoid wasting money on a business that doesn’t have any hope of succeeding.
What is a business plan?
A business plan is a formal document or a written description of your business goals, ways to achieve the goals and the time to achieve them. A business plan is a blueprint for a successful business. Business plans are always strategic. Strategic business plans are plans that identify and target your goals and also guide you on how they will be achieved.
A good business plan can help to make a business credible, understandable and attractive to someone else who does not have an idea about the business. Operating without a business plan is not a good one. Very few companies can last long without one. A good business plan should be able to outline all the costs of the project the business will venture into and the consequences of every plan that would be taken. Business plans are rarely identical even among competitors in the same industry; however, they all tend to have the same basic element.
A good business plan should be convincing and it should provide a piece of realistic and concrete evidence to show your ideas for the business has a good chance to succeed. Your business plan must be factual and systematic because a plan may seem good and attainable at the surface but after thorough analysis has been done while writing down the business plan, it might prove not to be feasible due to certain factors.
A business plan should provide an overview of marketing strategies, the business’ aim, and objective, competitors in the marketplace, etc. It should be able to convince you that your business ideas are viable in reality but not just a fantasy. If your business plan is not substantial enough then take a step back and review your plans. Write down everything that pertains to the business.
The key component of a business plan
It is an overview of your business plans and goals. It is ideally only one to two pages.
A good summary includes a summary of your objectives, description of the market, description of product and services, about your competition, funding requirement, and a snapshot of growth potential. This seems to be a lot but it is necessary for your business plan so you need to get it right. If your summary does not show how you will solve your customer’s problem and make a profit, then the business plan is not feasible. So before you think of any business idea, stop for a minute and make sure your business plan solves a problem for your potential customers.
Products and services
In this section of your business plan, you will clearly describe your business’s products and services. You also need to describe how your product and services will be different from that of your competitors. Trademarks, copyrights, patents you have applied for or you have should also be included.
All business differs; the extent of this section depends on the type of product and service you have to offer. If your business is product-based, then you will have to give details on the product. If it is a new product and service you decide to venture into, then you will have to give a thorough explanation of the uses of the product, nature, value, and how it differs from that of your competitors.
Thorough research on the business is a critical key to the success of the business. Who is your target? How many are they? How you could get to them? You must be specific. This section should be able to analyze customer locations or demographics, purchasing habits, which the product is for, buying cycles, how the customer will see your product, and what marketing strategy you should adopt to get to your customer. This process involves you understanding the market and the opportunities in the market, you will know all this when you research.
Before you start a market you must be sure there is a viable market for what you plan to offer, also you should ask yourself these questions:
- What is the size of the market?
- What demographics and behavior make up the market I plan to target?
- Is my product cost-friendly?
- Will your market likely grow?
- How is my product different from that of the competitor and what will make my product better?
- What segment of the market do I plan to target?
- How can I increase my market share over time?
This section of your business plan entails analyzing your competition. Every business has competition, understanding the strength (service, price, areas you may be vulnerable) and weakness (opportunities you plan to take advantage of). This is critical in making sure your business survives and grows. You need to assess your competitors from time to time by creating a profile for each of your competitors, analyzing each of them, what marketing strategy they use, how they will respond when you enter the market? You could get all this information by checking their website, all the information on their price, products, services, and aim of the company should be there. Evaluate their marketing campaigns, search their Twitter feeds, blogs, etc.
Analyzing your competition does more than helping you understand your competition because it also helps you identify changes you should make in your business.
A good business plan must have an estimated budget in place. This includes costs relating to manufacturing, marketing, development, recruitment, and any other expenses.
The packaging of your product is a very important step to take. A well-packaged product attracts customers to itself.
In the packaging of a product you should ask yourself the following questions:
- How does your packaging compare to your competition?
- How does your packaging match your value proposition?