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Success in business starts with a plan. Tal Edgars offers some tips on the crucial elements to include when preparing a successful business plan.
Many new owner–managers write business plans with the sole purpose of convincing a financier to lend them money for starting up.
However, a good business plan does more than just that and helps you build a strong foundation for your business. Let us look at how to make that happen.
Make sure you cover all the important issues in your business plan
As well as being very specific about the type of business you are starting and thinking ahead to where you want to be five years, there are a number of important elements that you will need to include in your business plan. These are:
To earn enough revenue, your business must be able to achieve a share of the available market. To do this, you’ll need to have a thorough understanding of your market environment, including its size and the share that you can realistically achieve. The size of your share will depend on;
Define the characteristics of the target groups of customers that could buy from your business. Make a list of the features that your products have, and the associated benefits that these features can provide to your customers, and then build up a picture of your target customers.
Competitors may be in the same (direct competition) or similar (indirect competition) business to you. The level and strength of competition in a market indicates how difficult it will be to gain a share of the market. However it is not simply the number of competitors that you should be concerned about; analyze the following aspects of each competitor’s business;
With a clear understanding of your market, you can define your overall strategy. Break this down into objectives and targets relating to the volume and share of the market (or market segments) you hope to achieve, and when you intend to achieve them by. Ask yourself, for example;
Now that you have a coherent marketing strategy, you need to be clear about how you are going to make it happen. A detailed marketing plan must explain how you go about achieving each of your marketing targets and objectives. Such a plan will include some or all of the following;
Your marketing plan, when implemented, needs to be converted into perhaps the most important business goal of all: sales revenues. Set out your forecasts in terms of sales of different product types by volume and value; sales from different customer groups; and sales from different distribution channels.
Information about your operational requirements will be required for your financial forecasts, while other information will be needed for your basic operational planning. Outline your plans for premises, equipment, staff, suppliers, and compliance and licensing, and estimate the respective costs involved.
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