In my biz series this week I want to talk about business plans. Now I must admit that with our first business I wrote a business plan (almost 40 pages) and with our second business I didn’t. Well, no the official one for the bank, if you know what I mean. But in both cases when you start any business writing down the important points of your business plan is absolutely vital.
I’m not going to go in detail here what a business plan is because I’m sure you can find this information elsewhere. But what I want to do is to highlight the important bits which you should concentrate on. To me one the of key points is research.
This is probably the most important part of your planning stage. You need to do a thorough market search to find out if your idea is worth pursuing. Here’s what you have to include in your research.
Is there actually enough people to buy your product? Are there already businesses trading with similar products? Who would be your competitors?
Just get some basics here. Ask friends, contact other businesses in your market, read press and reviews. Find out anything and everything you can about your potential market. No let’s drill down to it in more detail.
Analyse, analyse, analyse. I can’t stress enough how important “the studying and observing” of your potential competitors is. You can learn so much by just looking at their website, perhaps even buying their product to see the sale from pitch to completing the deal. You can test their customer service via email, phone or on their premises. If they have sales – how often, do they change strategies? Why?
Now ask yourself “What would you do different?” “How can you improve on that?” These would be part of your USP (unique selling points).
Investigate some more. Who are the biggest market players? Why do you think they are successful? What strategies including pricing do they use?
You need to find out your ideal customer and create a customer profile. Write down age group, profession, lifestyle, status, education and purchasing habits. Drill down to the details. Visualise your ideal customer. Find out where to find them.
From the start you should have a vision for your business in terms of branding, size and growth. You should also think about how you want to exit it at the end. Write down short term and long term goals. I wouldn’t go here in detail. Just briefly describe where you want your business to be in 2,3,5 years time and so on.
Even if you do all the above you need to work out if your product or service is viable to sell. If you sold it at certain price what would be your margin and would your ideal customers buy it at that price point. I had so many ideas which I researched from healthy kids lunch boxes to importing various products which we’ve seen abroad or used while living across Europe. Even though they may have been very good ideas or products we, in the end, decided to drop it because of the information we gathered during the research stage. Sometimes there was already an UK importer which we would be directly competing with. Some other times it came down to pricing and we drop it because we would find big enough market to support the business idea.
So to sum up, please take your time to go through each point and do a really detailed research. And if you decide to import, consider the culture as well. What might work in one country may not be so popular in a another country. There are customers for every product out there but the question is is there enough of them!
Of course business plan includes much more information than research but by doing the research you will find out whether it’s worth going further. Don’t waste time if you go through the data and you feel like something’s off.
Good luck and if you have any question, please comment below. It’s always nice to hear other experiences no matter what stage you are currently in.
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PS. All information in this article is part of My Planner 2015. You can find out more about it here.