In business school we learn of a wide variety of analytical methodologies to form a business plan, which I do employ when I compile your business plan. However, before you even come to that stage, you are at the conception of your idea. What are the key things to consider when you experience divine inspiration?
Below are reading suggestions on your business plan and below that 6 key factors to consider before moving on to writing it.
Who else is doing this? How are they doing it and why?
Few businesses are truly unique; they are an improvement on existing norms or they might even be a sector disruptor (revolutionising a sector, where existing businesses have to follow or fail, e.g. Amazon, Uber, Airbnb, etc.). So regarding your idea, ask yourself: “What is it that sets me apart from others and what will be the key to my success?”. Identify who the players are that you will compete against, how they run their businesses and why they do it that way. If you see mistakes, do it differently and if you have something to learn, copy and plagiarise to your hearts content, without breaking any laws of course! You want to, as a result of this exercise, comfortably arrive at your USP (Unique Selling Proporsition).
Skillset and knowledge
Use your trusted pen and paper and figure out what functions will exist in your business. Take into account every aspect that will make your business run, e.g. bookkeeping, marketing, IT, webdesign, production, etc. The areas where you lack the skills to perform the tasks you will have to decide; do I need the service on start-up, do I need to hire someone, can I learn it myself, is it important enough that I need to find a partner to perform that task, etc? If it is important enough to consider bringing in a partner, you need to start finding one right away as that person will want to have an input into how the business is formed.
Once you are up and running, one of your main challenges will be attracting paying customers and keeping them coming. You need to consider your expenditure wisely. Hence, do a brainstorming session with some friends and identify channels where you can attract customers without spending much money or might even be free. Marketing is a complex area and there is a plethora of ways to approach it, but it can be one of the more enjoyable business functions of your business.
Oh, the big scary topic of start-up investment! Settle down, settle down, it sounds worse than it is. Most businesses only need a computer, phone and a website and they’re off. However, it is important for you to put a list together of all the investments that are ESSENTIAL for you to get going (nope, that new company car is not essential!). Then you look at the capital you have available to put in as an investment. If there is a discrepancy where you need more capital, please do not panic, there are many ways to make up the short fall. I have written a couple of blogs on the subject, but some examples are; crowdfunding, government grants, bank loan, loan from family and friends, recruiting a business partner, etc. Above you will find some books on startup financing.
As you are working through how your business will work, it is a good time to figure out what you are legally obliged to do before launching your business. If nothing else, there are costs associated with this that you need to bring in to the previous point. Consider the type of company form that would suit your circumstances, e.g. limited company, partnership, sole trader, etc. Do you need any insurances, certifications, etc? Will you need complex contracts with your clients? What legal texts do you need on your website? My advice here is always to contact legal counsel if you are unsure, but scour the internet for the things you need and give the lawyer a first draft to limit your expenditure with them.
Base of operations
If you are looking to manufacture your product and sell it retail and/or wholesale, then you will need to consider your options very carefully. Do you put the production out on a 3rd party and where do you get the best quality for the best price? What investments do you have to make to set up your own production to maintain control of the process? I could spend a whole blog post on this topic, but this is to get you thinking, but think carefully you must. If you are selling services and/or products for resale, I would advise you to start out small without taking on big overheads. If you can, run it from your home and use the website as your shop window/studio in the start-up phase. The key here is to get you going with as little pain and frustration as possible. There are few businesses that couldn’t be run from your home.
NB. All links to Amazon are referral links and the publisher may receive a commission if you make purchase.