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An exhaustive business plan will give you every chance of future success. The next step is to simply register your business, start to build your brand, and attempt to realize your ambitions.
Putting together a business plan is a crucial first step in laying out your vision for your business. There’s so much to cover: from how you are planning to find an audience for your product or service to how you are going to keep track of your finances.
To give you a headstart on your business plan, we’ve tried to cover the document in-depth. We’ve done our best to cram everything you need to know about assembling a business plan into one convenient, accessible article. It’s an important part of starting a business.
1. Market analysis
You need to fully understand your target audience before you market your products to them. Data is becoming the most valued resource available to businesses. The Financial Times recently called it the ‘new oil’. The more data you have access to, the more confidence you can have in any observations you make. The larger the sample size, the more accurate any insights will be.
Exhaustive analysis of different demographics will reveal their interests, desires, and buying habits. You need to target the demographic that is most likely to show an interest in your products or service. Conducting market research to find out what audience your product or service is likely to appeal to is essential.
Once you’ve been able to identify which niche you are going to target, you can start to build detailed buyer profiles. These bios of different kinds of customers will help you to understand the kind of person who might be interested in your product or service.
From there, you can burrow deeper into their lifestyle – the kinds of social media sites they might frequent, how they like to spend their time, and what problems you can solve for them.
There is so much information out there about your competitors. A quick Google search – and a review of their website – and you can learn a staggering amount about those who you are likely to be vying against for sales.
Having a detailed understanding of the strengths and weaknesses of your competitors will allow you to chart the future of your business. The leaders in your industry will be there for a reason. They’ve been doing something right. Uncovering what the strengths are and replicating some of them will allow you to duplicate their success.
Equally, their weaknesses might prove just as useful. They might have overlooked a small – but profitable – niche in the market. There is money to be made in the corners of the market and understanding how your competitors market their business to their customers is crucial to finding your own base of customers.
Whatever aspect of their operations you look at; there are always valuable insights to be gleaned. A comparison of your pricing, your positioning in the industry as well as the differences in your product or service are all useful ways of evaluating the strength of your own offering.
Existing customers/ sales
If you’re confident enough to turn a budding hobby or pastime into a fully-fledged business, you’ve more than likely already had some interest in your product or service. Understanding what drives the interest in your product is key to making your business successful in the future.
You can work out what demographic your current customers belong to, how they found about your product or service as well as what appealed to them about it. These are all incredibly useful insights. Ensuring you can keep these insights, and keep in touch with your best customers as your business grows will also be very important, this is where a CRM for a small business comes in very handy.
If it’s only a small sample of current customers, there might not be enough evidence to extrapolate meaningful observations from it but it is worth looking into nonetheless.
Once you’ve decided on the kind of customer you’d like to target, you need to create a marketing strategy that is going to put your product or service in front of them – and in a way that captures their attention.
This is very general but if you were, for example, hoping to attract the attention of the 18-24-year-old market, you might want to use Instagram ads to generate interest. The user base of Instagram skews young, with 29.8% of their users aged between 18 and 24.
The avenues you have available are going to be determined by your budget. You might not be able to splash out on a flashy, primetime TV advert but there are effective ways of marketing your brand without breaking the bank.
Creating social media profiles for your brand and slowly releasing content that might pique the interest of your target audience is a great, inexpensive way of generating interest in your brand.
Content is a big part of marketing in today's world so once you have your target audience you can decide what type of content you’re going to create. You may need to learn how to start a podcast, or edit photos or even record your own videos.
When it comes down to it having an online presence is essential.
Whether you’re putting out industry-relevant polls or engaging with potential customers, the impact of this collective effort will put your business in the best possible position to succeed.
Similarly, following SEO principles to optimise your website can result in strong keyword rankings in search engine listings. Customers using the likes of Google and Bing will naturally encounter your site in relevant searches and organically explore the products and/or services you have available.
2. Management and operations
Building a team
Part of running a business – even a small business – is putting together a team to run things. You need to have a clear hierarchy. Each staff member should understand their role. Any overlapping responsibilities will only create chaos and confusion. Clarity on everyone’s role will help operations run smoothly.
In your plan, you should detail what makes each person qualified for their role: their education, achievements and career histories. You’ll also need to layout any financial contributions they’ve made, their respective salaries, as well as company benefits they’re entitled to.
Organizing capital requirements
In this section of the plan, you’ll need to discuss your business’ requirements in terms of facilities, equipment and insurance. This section will also need to identify any possible areas of concern that could block production. Having already identified these issues, you’ll be better positioned to deal with them when they arise in the future.
This is a crucial component of your plan. It doesn’t matter if you’re a D2C company, an eCommerce website or in fleet management, the logistics of your business can be complex. By detailing them in depth beforehand can help you keep track of all the inner workings. You need to summarise the roles of each division in your company: everything from sales, marketing, quality control, stock control and delivery.
You have to cover the entirety of the customer journey – from how they get in touch with you or your representatives right through to the product arriving at their doorstep. From handling payment from customers to taking a deep dive on your suppliers and delivery service, it’s a massive amount of detail to cover and you need to elaborate on every single aspect.
3. Financial forecasts
Numbers are the driving force behind any business. And accurately forecasting your business’ future is key to ongoing success.
In this section, you’ll need to calculate (to the best of your ability) the cost of starting and running the business, your sales forecasts for the first year, estimated profits and losses for the first three years, cash flow forecasts (taking into account different variables like wages and sales) as well as your budget and pricing strategy.
Any number you reach has to be justified. You can’t magic up numbers out of thin air; you have to take the time to evidence each and every one of your claims.
As a general rule, I would say you have to err on the side of caution. If you’re overly optimistic when forecasting the future of your company, you’re inviting disaster as soon as the financial realities don’t match up with the forecast.
Be realistic about your company’s fortunes and don’t give in to the temptation of inflating any of your projections to bolster hopes of attracting investment.
Even if you think you run a relatively mundane working environment with little in the way of risks or dangers, you’ll still need to think long and hard about any potential health and safety concerns you may encounter while running your business.
There are also legal ramifications to consider – from insurance to licensing.
Demonstrating to stakeholders that you’ve thought through all of these potential scenarios will increase your credibility and give you the best possible chance to mitigate any risks.
The appendix part of your business plan includes any supporting documents like contracts, credit history, cash flow plans, CVs, receipts, and bank statements. Elements of your business plan should be kept confidential and can take documents in and out of your plan depending on who you are presenting it to. This flexibility allows you to show the plan to different parties without jeopardizing the confidentiality of anyone involved.
This is typically the first page after your title page. You’re best coming to this part of the plan after you’ve completed everything else. This is because it’s essentially a summary of everything that is contained in your business plan.
Over three or four pages, you’ll cover the purpose of your business plan, how you plan on taking advantage of an opportunity in the market, as well as how you compare to your competitors.
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