So you have decided to take the leap and start your own business.
What is your plan to execute your business idea? Few days back, I had shared some of the basics for starting your own basics. I continue taking you to the basics, because the new ways have also evolved from these. I mentioned documentation is like your oxygen mask. Whenever you feel out of breath, meaning defocussed, refer to your business plan. Here we will discuss how to write a business plan for a new business. Like always, feel free to suggest or add anything relevant.
A business plan essentially means a plan of action to implement certain processes to reach a certain goal, financial or volumetric. You define everything about the business in the business plan. Products, services, sale, revenue, cost of sale, marketing, financial etc. Yes, each and everything should be documented. Office setup, operational setup, marketing plan, things you will need to run and grow your business.
How do I write a simple business plan?
A simple business plan is an idea in your head. When you have a business idea, you write multiple things in your head; thinking about some of the things like market research, process, product flow or anything. You are already developing a business plan in your head. Start writing it down. Become more articulate in your business planning. This will encourage yourself or your team to communicate within and make the planning stage more fun and easy.
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A good business plan is never crafted alone, instead you sit with your co-founders, team and discus debate to write down a business plan, that is achievable. Your business plan consists of lots of things, and a good idea is to document it at a very early stage, as it will work as a checklist when your business is live, and you don’t want to lose your focus. One major reasons why start-up fails, is due to lack of a proper plan for their business. If you are not sure, what product is going to be your core product, how you going to market the product, what will be after sales responsibility, and how you will retain the customer, you are 10 steps behind running a successful business.
It doesn’t matter if you are looking to get investment for you business or starting a self-funded business, a well documented business plan is an essential, and you should plan out right now by following below business plan checklist. As a basic structure, we can break the business plan into few headers:
1. SOP – Statement of purpose
((why does my company exist? What is the vision of my company?) – A statement of purpose for a company will be the lighthouse and will define why does the company exist. It’s vision, mission and goals should be put in here. If you have a blog, this is your About Us / Who we are page.
Here are few questions which you should answer yourself:
- Why I’m creating this product?
- Who needs this product?
- How I’m going to reach to potential customers?
- Analyze existing competitors, and build something better
2. Product Side (how will I make money?, what do I sell to make money?):
Define your products. What will the company sell? Where will your business make revenue. If you are a blogger, segregate affiliate, AdSense, theme sales revenue. With time you will feel a lot confident and focus on high performing products and improve on the low performing ones. You should make a list of all focus product/services, and mark few as your core product.
Your core product will be strength of your major revenue, and other products will help you to reach your financial goals.
3. Financials(how much money do I need to run a business?):
The cost of everything you use in your business should be defined. I do not mean waste a lot of time finding out prices or costing for each expense but have an approximation to start with.
- Office setup (how much capital would you require?)
- Operating expense (how much money do you need to run the business?)
- Marketing expense (how much money do you need to sell your products?)
- Administrative costs (legal paperwork, regulatory paperwork and fees).
These are some of the basic heads from a new business’s financial point of view.
4. Organizational Structure (what is the team structure for my business?):
Even if you are a Solopreneur, write down a role for yourself. When you move from Solopreneurship to Entrepreneurship, you will have a team. In that team, at basic level, your board of directors (simply, people with decision making authority, call them anything based on the regulatory requirement), will become key members. Define roles for each of them.
5. Growth strategy (how will my business grow?):
This will include your marketing plan. A simple marketing plan consists of steps that help you sell or make a brand. Brand awareness and sales are two major goals of a marketing plan. Once you have identified your target market, note down the route you will take to reach your target group. Define channels and make a network of your “marketing strategy”. This will go a long way in giving you faith, power and belief for doing the right thing for the business.
If Social media is going to be part of your marketing strategy (It should), you need to plan out marketing strategy for the same. You need to find ideal social media channel for promotion. If you are a company offering fashion goods, fashion e-commerce site, Pinterest should be your number one target, followed by Facebook, Twitter and other channels.
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6. Market Research (how do I know I am entering the right industry?):
Your business plan needs to have the potential market size or number of users who are your target audience as well. Often it is know as Market Sizing. For a blogger, this exercise becomes much each easier with Google Trends and other keyword search tools. You can identify how many people are searching for a service or a product that you want to sell. If it’s a new product, it must have evolved at some level. How has the consumer behavior changed since then? You need to understand and put it in your business plan. This will be your key for research and innovation in later stages.
I always emphasize on setting up a business as soon as you can, but one should always remember to put a simple business plan in writing. Even if you were to pitch to investors or clients, you need clarity in your head. If you continue writing the plan in your head, clarity will stay much away. Document the business plan and stick to it.
This is a standard format of writing a business plan, and if you include something else apart from above, I would love to know that too. This article is a part of our starting a business series, and if you have more questions related to your business, do let me know via comments. If you find this article useful, do consider sharing it on Facebook & Twitter.