Answering the Essential Questions
| Like in life, we all ask essential questions. A business plan is no different. They are
Who: Who Is Your Business?You have to be clear on who you are in your business plan. Why? Well, for example, if you're going to seek funding for your business idea, investors and bankers will surely want to know who they are dealing with. They will want to know about your experience, your skills, and your role in the business you chose. In addition, they will want to know who will supply the business experience and expertise you may lack and your plans on how to acquire that extra talent.
You should also know something about yourself. Do you feel that you have what it takes to start and run a new business? Are you willing and able to put in the long hours and hard work a new enterprise entails? Are you financially able to survive through the tough start up months? And most important of all, do you have the traits of an entrepreneur?
Finally, who is your business? What will your legal structure be? Is it a sole proprietorship? A partnership? A corporation? What: What Does It Sell?The purpose of a business is to sell something. It may be a product or a service, or it may sell information. In any case, your business plan must be able to explain in detail what kind of product or service you plan to sell. What is it? What makes it unique? How does it compare with your competition? Do they dominate your market niche? If so, can a newcomer break into the market? How do you plan to compete? Do you have a competitive advantage? What is it? Is your product as good as your competition? Better? Why? What is your USP? You must also look ahead. Once you're established in the marketplace, can a new company easily undercut your prices or your earnings with a newer product or service? Do you have a barrier to competition? If so, what is it? Why: Why Is It a Business? What Need Does It Solve?We've all heard the joke about the dumb salesman trying to sell refrigerators to Eskimos. As it turns out, it's not dumb at all. Refrigerators serve a real purpose in frigidly cold weather. They keep the food from freezing solid. This is an example of finding a need and meeting it. What you sell must do the same thing. You have to clearly explain how your product meets a consumer need. To do that, you have to identify your target customers (demographics), and explain how your product or service will meet their needs. Who are you targeting? Consumers? Retailers? Wholesalers? The government? Is your product practical? Will it fill a need? What need? You also need to identify where or how you will be acquiring your products. Who are your suppliers? And who are your backup suppliers if your primary ones fail to deliver? If you're manufacturing your own product, who is supplying your parts? And finally, where will your business be located? What physical space will be necessary? Office space? Retail space? Warehouse space? A combination of some sort? Are you starting a homebased business? If so, do you have space in your home? Where will you locate it? What about your community's CC&Rs (conveniences, conditions, and restrictions)? Their conditions and restrictions on what you can use your home for? Will they allow for a home business such as yours? When: What Is the Implementation Plan?A business plan will do you little good if you don't have a strategy to implement it. Things to consider in your plan are how many months of zero revenue will be needed to start up your business? Do you have a phased plan for development complete with what you wish to accomplish, by when, including what must take place before each phase happens? What are your major decision points? What milestones do you want to hit and by when? What actions are needed to meet those milestones? In summary, an implementation plan lays out your company's objectives, the tasks or actions necessary to reach those objectives, a timescale of events or actions, and a way to monitor your progress. Where: Where Is Your Business and What Markets/Customers Will It Service?Whether there is a market for your product or service is just as important as the product or service itself. The business landscape is littered with companies who thought they had a great product or service idea, brought it to market, and discovered few people or no one was interested in buying it. Market research will tell you whether or not there is a market for your product or service. Who will buy your product? What are their demographics? Do they shop online? What online areas do they frequent? Back up your findings with real data from private, public, or government sources such as census information, databases, and industry information. What is the potential size of your market? How big a piece of the market can you garnish for your business? How do you feel you can serve this market? Why? If you've done your research well, you will have a very good idea of the size of your market, the makeup of its consumers, and the important information you will need to create your marketing plan. How: How Will You Market Your Business and Your Product or Service?Marketing your company and what it sells is the cornerstone of a successful marketing plan. All is for naught if you can't actually sell the product or service your company offers. To do that you will need to create a demand for what you sell. Demand is created through advertising, publicity, and promotional programs. What are your plans for marketing your business? Are they realistic and based upon your proposed marketing budget in your financials? What is your overall marketing strategy? How will your choice of marketing vehicles help you reach your target market? What advertising media will you use? TV? Radio? The Internet? Some combination of them? Will you use direct mails or telemarketing to reach potential customers? How will you use public relations in your marketing mix? Will trade shows, seminars, and workshops also be included in your marketing plan? How will you use them? Where and when? How your business plan answers these questions is critical to the success of your company. How Much: How Much Money Will You Need to Get Your Business Started and Running?Money and resources are the lifeblood of any business. So, you'll need to know how much you need to breathe life into yours. What is your source of funds and/or resources? Will you need financing? What kind? SBA loan (Small Business Association)? Equity? Debt? A combination of both? How much will your business need to reach break even? How much will you need to meet your sales and revenue projections? If it's a start up, how will you compensate yourself? What are the personal resources that you'll contribute to the business? If you're seeking a loan from a bank, your friendly banker will want to know what kind of financial risk you're personally taking. What about human resources? Who will you need to hire and how much will they cost? What technical resources will you need? Where will you buy them? How much will they cost? Will you need some special business insurance? What is it? What will it cost? A lot of questions? Yes. But every one is important and should be answered whether you are a home or small business. And you answer these questions in the elements of your business plan. |
EAN: 2147483647
Pages: 149