4 steps to developing a business plan
Having a business plan is crucial for any company, but when it comes to starting out it can often mean the difference between success and failure.
A good business plan should include market analysis, company description, organisation and management, strategic analysis, marketing and sales management, service or product line, funding models, and financials.
Here are some important rules for creating one.
1. Know your market
Understanding your communication channels will help determine your advertising spend.
Consultant John Downes says the first thing to understand is who your customers are and through which channels they prefer to receive communications.
What are the customers’ demographics? What channels will you have to access them? Will it be through face-to-face contact, social media, direct or electronic mail or a mix of multiple forms of communication?
“One of the key things that the business plan needs to take into account is how are you going to exercise those channels and most importantly how does your chosen customer segment want to be communicated with. Understanding your channels is really important and that will determine where you invest your advertising and marketing spend.”
It also helps you to identify the ideal location for your business and what sort of space you need.
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2. Develop an overarching strategy
Downes say the business plan is not a budget, but a strategic document for businesses.
“A business plan helps us think about who our customers are, how we’re going to serve them and what the ramifications are for your business,” he says.
“A business plan challenges whether you’re going for the right customers. Has the customer segment changed? Has the demographic around my (business) morphed?”
He says if these questions throw up challenges to your operating norm, you may require a new business location, perhaps relocating to an area that’s more suited for your market.
Downes says a good business plan analyses the market and develops a strategy for it.
A good business plan analyses the market & develops a strategy for it.
3. Identify your value proposition
Downes says businesses should address the following questions: “Where are you actually delivering value and what problems are you actually solving?
“What key activities do I need to nurture to give them and what resources do I need to serve that?’’
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This, he says, lies in identifying what is unique and compelling about your value proposition. What are you doing that’s different from your competitor? It means identifying the needs and problems of your ideal customers.
“The business plan triggers you to think of some of these things.”
4. The business plan as a sale document
Downes says business owners should look at their company from their customers’ perspective to see if it truly serves their needs.
He says customers are essential to driving business growth and identifying new opportuniites.
“What are its risks? Is it solely depended on a super sales person? Am I reliant on three of four referrers from a particular community?
He says by looking at your plan through the eyes of the customer you can see some of the holes or potential holes in your business.