It says action will always trump words.But before taking any action in starting off your business, you may consider writing up your business plan first. Want to know the advices on your business plan?
1-Company profile
Generally speaking, you include the big picture of how your business runs/operates, what product is offered and the most important piece is what benefit will be brought to users/customers, whether it is intangible or tangible.You need to be clear about what that is as later on , you are expecting to see if those benefits can be recognized by your customers(turn into your sales). In this section, you may include your company structure, who is doing what. In case, in the beginning, if it is a one man show, then you need to describe how you play out various roles,like finance, marketing,etc. For a lot of start-up business, a lack of resources is so common. Don’t forget to ask for help as a lot of people even your peers may lend you hand. Those can be included in your business plan as well. Another key element in this section is the legal structure, whether it is sole-proprietorship or incorporation, each structure has its own tax implication. It may NOT always be the case that incorporation is better. It really depends the stage that your business and the risks your business are associated. Incorporation of your business does not mean to shield you from liability but the insurance coverage is.
2-Market Research
In this section, you are going to identify the behavior of local market, how it responds to the similar product/service, how your competitors work and play to their strength.Target market is the market/population/customer base that you plan to sell your product/service to. What are key factors driving their buying pattern? Location, product features or maybe pricing.The last piece that that Dominik Loncar at Futurepreneur Canada highly recommends, doing a customer survey and getting the first hand information instead of doing research on the the Internet. When selling a product at retail level, you may collect around 30 surveys on the feedback after the sample testing; for service, you may need to get a few potential clients’ comment
about your service. The survey really works out the real picture of your customer base.A wonderful point from Dominik!
3-Marketing
Marketing always has a lot of fun.Technology nowadays offers you a lot to help penetrate into various market segments through social media.You may consider partnering with other brands to develop your own brand.The question to yourself is always what is the cost-effective way to get your name out/promote your brand and focus on one tool instead of multiple ones as you may not have the same budget as other big players do.
4-Operations
Never underestimate the importance of operations. All you efforts in #1 and #2 and #3 rely on the efficient operation process to turn ideas into sale figures.You have to decide whether it is online business or offline (physical location).What are those elements that you should consider? Let me name a few, cost structure(labor, material,shipping,etc);operating process(who is doing what);what’s my profit/margin/mark-up, whether it is reasonable to cover all the costs;if it is not, it is a short term issue or just the business is not viable.In running the business,a lot of business owners have to deal with compliance issues, like in restaurant business, you need to have licence to handle the food as well as health check-up for all the staff; in insurance brokerage business, you need to obtain RIBO license. As well, considering buying insurance policy on liability to mitigate the risk.
5-Financials
Finally, numbers. We always say if you can’t measure, you can’t manage. When starting up a business, you have to considering various costs upfront. Are you going to borrow money from friends/families or from the banks?You probably need to build preliminary sale forecast based on your understanding in the market/customers.How does your cashflow looks like? positive? The key to do this exercise to allow you to understand the true financial picture of your business, how
much cash generates from the business, how much you need to spend buying equipments,etc. Sometimes, you may need to work on some scenario analysis, which gives you the sensitivity of the sales based on the assumptions made at the beginning.Don’t feel frustrated if assumptions need to be changed, as long as you look deep into your forecast figures, you understand better various challenges in the business. The better you know, the better you can prepare.
Always, always remember that business plan is not one time writeup but a living document.As you do more research, you will get a better understanding of your potential clients/market.As a result, you may need to refocus on your marketing plan. And take a small step approach to test out your ideas and formulate your next step (That’s Dominik’s second recommendation). Don’t jump. Millions of solid steps bring you to the success of the business. Good luck!
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