Somehow, 2018 has whizzed past, and it’s that time again when we start looking forward to the next year. If your new year’s resolution is to start a new business, or just to continue growing your current one, then your number one priority is going to be a comprehensive business plan to get you off the ground.
A good business plan can mean lasting success, exciting growth, and enthusiastic investors; the ideal result. So what are the ingredients to craft a success 2019 business plan?
Do Your Homework
Research, research, have a cup of coffee, research some more. Become an expert on your product (of course!), the industry, the market, and your competition; become one of those people who can reel off endless facts at a party and bore everyone else!
Seriously, though, the most vital step towards a thorough business plan is your research. It’s your responsibility as a small business owner to know what you’re getting into. Like writing an essay at high school, you’ll then need to select the key points to go in your plan critically.
Determine Your Objectives
Remember what they say: you can’t get anywhere if you don’t know where you’re going. Determining your goals will be what gives you focus as you develop your business and helps you start to lay out a roadmap to the future.
Avoid anything vague or unachievable: “To become the most popular online marketing service” isn’t going to get you anywhere or tell your investors anything. Remember our favorite acronym SMART – Specific, Measurable, Achievable, Realistic, Timely – and base your objectives around that. Write down profit goals, market share goals if relevant, describe your vision; this gives you specific numbers to aim for.
Craft Your Business’ Purpose
If setting out objectives is what gives you focus moving forward, crafting the business’ purpose is what will provide you guidance when you need to make decisions. It’s about getting to the core of why your business exists and should be something that both customers and employees can relate to.
Remember the purpose goes beyond numbers; it is a way of constantly reminding you, as the founder of the business, why you started up. Is it to fulfill a need in the target market? To help people? To inspire them? Whatever it is, make sure it’s not just to you, but to your investors, customers, and partners too.
Understand Your Audience Well
Whatever your business’ purpose is, it will most likely be centered on your target audience, so it’s crucial you understand them as well as you know yourself (maybe even better!). As part of your research you will examine the current market; which segments are you planning to pursue?
Think about whether you’re aiming for particular age groups, gender, locations or lifestyles. After identifying your target demographic, list the key features, characteristics and, importantly, the needs of this group. Their needs to shape your business and help you clarify your unique selling point.
Recognize Your Value Proposition
When doing business planning, you can’t pretend that you don’t have any competition. So instead you need to focus on what makes you different from your competitors. You have analyzed your audience’s needs, so how does your product or service meet these?
Your value proposition doesn’t have to be about lower costs; it could be about the added service benefits customers get from working with you or the advanced technology you use that makes your company the more efficient choice. Think about creative solutions to the question that’s always in consumers’ minds: what’s in it for me?
Establish Necessary Financing
Now you get to the tough part: the money. So be honest about it. What is your business’ current financial situation? Show your assets, your personal and business net worth and present analyzed financial projects.
This is all about establishing what financing you need, so there is nothing to be gained in hiding information. Potential investors need to know what and how much you need; not to mention what you’d do with the money. Financing is the lifeblood of your company; you need to know what’s necessary because if it runs out, your business will flounder.
Add Every Possible Stream of Income
On the topic of building a clear picture of the finances, make sure your business plan includes every possible stream of income in its forecasts. It probably not just about the revenue from sales; depending on your business, you might also be making money from usage or subscription fees, advertising or leasing.
Make sure your business planning takes all of these into account, and analyze what proportion of your overall income is generated by each stream. Regarding planning, this helps you know where to focus more energy.
Create Marketing/Advertising Strategies
Many would argue that your marketing plan is every bit as important as the overall business plan; certainly, if you don’t have one, a key ingredient is missing from the plan’s recipe. You also need solid marketing strategies to help you with your financial projections; when you don’t know how you’re going to sell something, how are you going to predict how much you’ll make from sales?
With your target audience in mind, address how you are going to promote your product or service. Is content marketing the best option for you, or should you take a more traditional approach? If you have a younger target demographic, you need to think about your social media strategy.
Generate a Possible Exit Strategy
You might be so involved in the excitement and optimism of your start-up plan that needing an exit strategy seems inconceivable. It sounds negative, but it’s a way of maximizing your success now while knowing you have a plan in case you’re ready for something new in a few years. Potential investors will also want to know you’ve thought everything through.
When you hear exit strategy, you might think of declaring bankruptcy. Certainly, this is one option, but you could also consider a merger and acquisition or selling to an interested party, using the money created to pay off your investors (and then start something up all over again!).
With these key ingredients, you’re guaranteed a recipe for a successful plan!