How To Prepare For Your Business Plan
Producing a Business Plan – or getting it done for you – is a big decision, with benefits which I’ve detailed before. (If you’re still wondering what the point of having a Business Plan is, have a quick look at this).
However, it can be frustrating if, having made the call to get it done, you find yourself woefully unequipped for the task ahead.
Doing the planning in your business requires a commitment, as well as an investment of your time (and maybe even money). To help make sure you’ve got all you need, here are 6 things I recommend you do to prepare to produce your Business Plan.
Know Your Business
I know this sounds patronising. After all, who knows your business better than you?
I assure you it isn’t meant to be. The point I’m making is that, as well as being able to give an overview of your business, you have to be able to articulate things like the main idea behind it, your mission and objectives, and who your main competitors are.
To make sure you've got all you need, here are 6 things I recommend you do to prepare for your Business Plan
Think about what the market is like, and where it is going
What’s the current condition of the market?
Is it growing, fairly stable, or declining?
Are there any notable underlying trends?
What is the demand in the market, and how do your products or services meet that demand?
What’s your Unique Selling Proposition, and are there any gaps in the market which you intend to fill?
Know the audience you are selling to
Which segment of the market have you designed your products and services for?
Women, men, or both?
Working women, or stay-at-home mothers?
People within a certain age range?
Are they based in cities, suburban or rural areas?
Are they early adopters or technophobes?
What are their problems, and which of these will you solve with your products and services?
These are some of the questions which will frame your offering. And they are crucial, because sometimes it’s easy to forget that our products and services are NOT for us.
They must meet the needs of your target market. Always remember that your success is dependent on giving the people what they want.
Brainstorm some ideas about how you will price, market and sell your products and services
Take some time to think about your pricing strategy.
Most of the time, people think this involves plucking a price out of the air, but there’s more to it than that!
How much does each unit cost to produce, and what margin will the market tolerate on top of that?
How does that then match your expectations for income and profit?
Then, you need to think about how you want to market and sell products and services. Social media makes advertising and marketing more accessible, but bear in mind that what works for a similar business may not work for yours.
So, do a bit of research, and have some intentions for how you will conduct your sales and marketing campaigns.
Brainstorm how you will price, market and sell your products and services
How will you measure your success?
“Measure your success” sounds boring, I know!
But if you don’t work out in advance how you’ll do this, how will you know what you’re working towards?
And more importantly, how will you know when it happens?
Take some time to think through the finances
This part is easy to skip, but is probably the most important of all.
(I’ve put together a post explaining what the jargon in a Business Plan means; here it is. Start by reading that; it will help you with this part).
You need a certain amount of cash to run your business every month. Sum up your expenses (and don’t forget to include your salary).
What does the total come to? That’s the amount you need to have available. Not invoiced and waiting for payment; I mean actual cash in the bank. Anything less, and you immediately have a cash flow problem.
Many a business was successful on paper and in terms of invoiced amounts, but ended up filing for bankruptcy because it simply couldn’t meet its obligations when they were due.
Another key point to address is the length of time you think it will take to make a profit.
It’s not unusual for some businesses not to make a profit for some months, or even years. As long as you know that upfront and are prepared for it, it’s not a problem.
But if that’s the case, do you have an idea of what those losses will come to each month? How will this be funded, and how long can you sustain that?
My experience is that people either don’t plan for these scenarios, or are far too optimistic with their figures. Better to err on the side of caution and make too much provision, than to fall short and find yourself at a loose end.
I hope that these six pointers help you along in your planning process.
On the other hand, if you understand how important a Business Plan is for your future success, but are struggling to write one, don't worry! Get in touch today to find out how to sign up for my Business Planning service.
P.S. Where I’ve recommended doing research, please don’t think it has to be onerous.
Ask your family and friends. Use the internet. Create a poll using SurveyMonkey or Google Polls.
Some professional bodies – such as the Institute of Directors – offer research sessions which you can access as part of their membership. Check with your professional body and see if they can help you do some. They may have done something similar already, and have some statistics you can use.