The Three Main Elements Of Business Planning

Every day, millions of businesses spring up, both online and offline. These businesses run the gamut of categories, from spas to sneaker stores, accounting firms and accessory websites. Business planning is the first step in creating a secure future for your company.

Creating a Plan For Your Business

Writing a plan is the first stage of business planning. As the name suggests, a business plan is a roadmap for the direction of your company. While many owners fail to write such a plan, it is an essential step in the growth of your company. It helps you to forecast and problems that may develop in the course of business. Think of it as a contingency plan. If you are planning to apply for commercial real estate or bank loans, you will need to demonstrate proper planning for your business.

A business plan contains several main elements. First, it lays out the mission and the goal of the business. The plan will spell out whether your company is in business to serve a greater good or simply to fulfill an unmet need. Determine whether your business will serve other businesses or supply products to consumers. These are all important elements that should be included.

It does not have to be long or overly complicated. It simply has to have the elements required to put your goals into action. Developing a SWOT analysis (strengths, weaknesses, opportunities, threats) will help you to identify problems before they start. Craft your own or hire a business writer to create a dynamic plan that will guide your operations. An effective plan is one of the most important elements over overall business forecasting.

Creating a Marketing Plan

Similar to a business plan, the marketing plan spells out how you will market to new customers and retain current ones. The marketing plan should identify your target customers and develop a strategy to reach them effectively. Your marketing plan usually includes market research that gives you a profile of the ideal customer. As with your other plan, it is important to identify any strengths, weaknesses, opportunities and threats that may affect your company’s operations.

Your marketing efforts do not have to be expensive. In many cases, companies that don’t have marketing plans spend more than is necessary to reach their customers. With a plan that will spell out the ways you will market your company, you will save money and energy on your business marketing efforts. Creating an effective marketing plan is one of the most crucial elements of planning for your business.

Succession Planning

Unless you plan to run your business for your entire life, you will need a plan of succession. If you are the only person who can run and operate your company, it is doomed to fail when you can no longer run it. Create a plan that will spell out what steps will be taken to either sell your company or hand it over to another manager. Develop a system that allows your business to be run without you. An operations manual that details the key components of running your company is the first step in succession planning. Consult an attorney about the legal aspects of either selling or transferring ownership of your company.

Planning is an important element of any successful company. By adequately planning for the direction of your business, you will enjoy business profit and success.

How To Develop A Successful Business Plan

Make Sure You Have A Business Plan

The first point to keep in mind about business plans is… have a business plan! This may seem obvious but is overlooked. Many people start businesses without a plan; sometimes it can come from sheer bravado, thinking “I don’t need a plan”, or alternatively you might hear “It’s all inside my head, that’s my business plan”. The reality is no matter how much you work with things in your head, no matter how confident you may be and how much you think you already have a great vision for your business, there are so many great reasons why you should get it down on paper.

Most of all if you are seeking funding for your business, it will be absolutely crucial to go along and show someone an actual plan, because there will be very few people who will loan you money on the basis of what’s just in your head. So it’s pivotal to have a plan and be committed to preparing that document. If you are someone who shies away from planning, or you don’t like writing or preparing documents, nevertheless you are going to have to force yourself on this occasion. I say that because it is such a key document for the future success of your business, such a tool throughout its development to return and refer to.

Have An Overall Vision

When writing your business plan it is really important to have an overriding vision of what your business is going to do, what it is going to be, and what you want to achieve. Very often it is tempting to get straight into the technical details, the monetary concerns, financial matters, where you will be sourcing supplies, etc. Now all these things will be vital in your business plan, but it has to be held together by a coherent, broader vision.

Remember the proverbial expression ‘not seeing the wood for the trees’? You need to see the ‘wood’ first, then delve in and start examining the individual ‘trees’, meaning the individual items which you will be breaking down later. So a great point is to make sure that you have that overarching vision – and if you cannot find one, then maybe it is an indication that you are obsessing on a few technical aspects that do not necessarily make up a whole business as you had imagined it. A business that makes sense and is going to be sustainable in the future is one that has that clear vision within which all the smaller parts contribute to make it successful.

Contextualise Your Budget

Of course your budget will be extremely important. But sometimes people sort of pluck figures out of thin air, not giving it the context it needs in the business plan to make real concrete sense of how that budget is going to work.

So it is crucial that every time you mention financials in your business plan, to really give them the correct context. When I have worked with clients in developing business plans, there has been a budget or amount set aside for example to be spent on marketing, which has been decided a bit arbitrarily. I mean with no real research, no understanding of what that amount needs to be spent on, and what that budget will truly achieve. It seems to have been put there to fill the need to attribute a certain sum to marketing.

Make sure you are researching each point of your budget, make sure that you are giving it context and it makes proper sense within your overall plan.

Don’t Make Assumptions About Customers

To be an entrepreneur does require plenty of self-confidence, sometimes almost a bloody-minded determination to make your business work. But this confidence spilling over into thinking that you know what ‘the market’ wants can be dangerous, without checking that it’s true. You need to do your research that the market does ultimately want what you will be offering, whatever products or services you will be selling.

That is a great thing to make sure you have in your business plan, that your business will be built around those real customer wants. Do not make callous assumptions, or statements like “I know what people want”, “People are going to love this”, and so on. Have you done your research? Do you really know that the people you will be targeting want your product / service, and crucially do they want it AT THE PRICE that you will be offering it at? Whilst confidence in your plan is fantastic, you must make sure that it does not lead you down a blind alley along a path that is not desired by your target market.

Don’t assume what customers want, do your research and make sure that is clear from the start in your business plan.

Research Your Competitors (But Don’t Copy!)

Every business plan should focus a lot on the business’s potential competitors, because research and analysis of the competition effectively gives you plenty of useful information. It may guide you as to where you should be advertising and marketing, or certain strategies to use or ones to avoid because you see they have been used unsuccessfully by others.

I often see people split into two camps. On one hand those who almost ignore competitors in their business plan, because they do not want to think about the issue yet and feel so confident they have a great idea for the market regardless. But I recommend not being overconfident when it comes to competitors. They are still there for a reason, they are still around and in business for a reason, so view them with that in mind.

I teach that you should seek to learn from competitors; obviously never copy another business’s idea or what they are doing, but you can absolutely learn from their mistakes or see what they are doing and discover ways to improve it. All of that analysis belongs in your business plan: make sure you have your competitors under the microscope and make sure that is a solid chunk of your plan. That is some of the best research and information you will gather about what will make your business successful in future.

Be Prepared For Risks

It is a fact of life that any new business or enterprise has a degree of risk attached to it. Therefore it is important for your business plan to analyse and calculate that risk, showing how you will engage with it. There is no business plan out there that is risk-free, but very often where the risk is higher then the rewards will be as well.

What should come into your business plan is how you assess it, how you foresee anything occurring that could have an adverse impact and how you would deal with it in the right ways. If you are looking to obtain funding from a bank or people you know, it is essential to show what the risk factors are in the proposed business and how you plan to defend against them.

It could be, for example, the risk of a change in the economic environment – what are your contingency plans for that in terms of dealing with such a situation? There may be many other risks as well specific to your particular sphere of operation, but that ability to plan ahead for all scenarios makes for a robust business plan. When I have received business plans, the very best responses come from people who have looked at the risks and have an answer for every question. What you never want is to throw a scenario at your plan and have to answer “I don’t know what I would do in that situation”. You want to plan for every possible contingency, and certainly all the major risks to the ongoing success of your business.

Obtain Feedback On Your Plan

When writing a business plan you sometimes end up locking yourself away. You might have unique ideas which lead you to seek some isolation and secrecy, or if you are going to be a sole trader you may only have one person to consult namely yourself. But it is fantastic to try and get broader input on your business plan – whether from a professional, or simply from friends and family whom you trust. I say that because of course you need to be careful with commercially sensitive ideas, as you do not want to pass your plan on to someone in the pub who then starts your idea before you across the road.

But do not be too paranoid, make sure you are showing it to people you trust, whose feedback you welcome and can be genuinely useful in guiding how the plan takes shape. Very often when working as individuals we get very close to certain details and miss out a big thing that has slipped your mind. You can concentrate so much on essential financials and supply logistics, but overlook other issues like marketing or opening times. By showing the plan to someone you trust, they can have a look and see what might be missing or worth developing more. Getting that valuable second opinion on how robust your idea is will put you in a much better position to start and keep going successfully.

Business Plan: Why Should You Create A Business Plan For Your Online Home Business?

Having a business plan is so important to you as an online marketer. But most people, who start online businesses, especially small businesses, do not really take the initiative to make a business plan. Probably they think that it’s not necessary. But for sure there is little you can achieve in life without proper planning. More so in the contemporary times when survival depends largely on one’s ability to organize your physical and mental resources well. The future is actually for those who are organized. And the future of your business is dependent on your good planning.

Planning is very important in life. Everybody should do planning at individual or family level. As an individual, you should plan for the day well in advance in order to accomplish what is to be done in that day. At family level, a family plan helps to focus on supporting the entire family in its growth and development. Planning is also done at business and organizational level.

A business plan is therefore an outline for taking an idea for a product or service and turning it into a commercially viable reality. It’s a roadmap of the business you intend to start and without it you may end up getting lost on the way. It should therefore be remembered that having generated your business ideas and analyzed them to come up with the most viable idea, it’s important to create a business plan for your online home business. Do you have one?

Some people think that they do not need a business plan for a small business. But let me make it clear that the size of the business doesn’t matter. Whether small or big, you need a plan. If you need a plan as an individual and for your family, then why not have a plan for your small business? Like for individuals and families, you need to plan for your online small business.

A business plan shows you what you would like to achieve and how to achieve it. Although not all plans are written down, a good business plan should be written down. If you have it in your head, it’s high time you spent some time to write it down for better results.

Why should you create a business plan?

1. It encourages you to think deeply about your business objectives and goals.

When you create a business plan, you get to think about the short-term and long-term objectives. It also helps to develop a mission statement for your business. This helps you to remain focused as you do your business.

2. It encourages you to think about the possible problems and how to overcome them.

In any business you may think about, there are always risks involved. Creating a business plan enables you to anticipate the risks that you may encounter in the process of running your business. It also makes you to think about the various ways of overcoming the problem in case it happens. That’s a proven way of looking at things for you to remain in business.

3. You get a clear picture of the whole business project.

The process of making a business plan makes it possible for you to focus on the nature of your business in details, to analyze your target market, to develop a marketing and operational plan and to make your financial projections.

4. You get new ideas.

It becomes easy to communicate your ideas to the people you interface with, who in turn can give you better ideas or complement the ones you have. Collect all the material to one place. Having a business plan makes it possible to have all your ideas and plans in one place. It becomes easier for you refer to it and to use it to develop your business. You become a more committed business person and even others people, like your prospective financiers, can easily regard you as a serious business person.

As I conclude, I would like to advice all people, who want to start any kind of business or who already have business without a business plan, to think about creating one as way to building a successful business. One of the causes of failure in business is lack of proper planning. Create a business plan if you want to succeed in your online home business!