You may be thinking, why do I even need a business plan in the first place? The reality is that businesses that fail to plan, fail overall. Without a clear vision of your goals, offering and how to reach the target consumer, the feasibility of your business idea cannot be assessed.
A business plan is dynamic, so it changes with the business. However, the central decision making is always cross-checked against the business plan to ensure it works towards the achievement of goals. You also need detail, but simultaneously it needs to be short enough to review overtime. The business plan is also helpful when onboarding new partners and employees so that everyone is on the same page about the business’ direction. Set aside some time to make your business plan, here are our top tips to do so today.
Your setup
Firstly, you must consider how the business structure will be set up. Whether you are going in as a sole trader, partnership or private company, this will determine your finances. A partnership is great for a higher pool of funds, and help with decision making, however, a sole trader gives you the liberty to set the business up exactly how you want with full control. There are many aspects Westpac suggests considering when just starting up a business, such as registering a GST and opening a separate bank account. This section also mentions the location of the business, or lack-of if it is online. Insurance details and any IP should be included as well so it is easily accessible.
Your products
Consider what your main offering is. What is the point of differentiation that your business offers that differ from competitors? It may be the price, design, a new feature or simply a more personalized service. Most successful businesses have a strong point of differentiation, and the harder it is to imitate, the better your position in the market will be. It is important to consider what suppliers will be used if it is a physical product, and the parameters of material needed. Consider more ethical, environmentally friendly sourcing to match the needs of consumers.
Your goals
Goals for the business should be SMART, which includes revolving around a time frame, being realistic to achieve and specific to a number. Goals should include sales, communication, and general business goals in both the long and short term. For example, a new business may have the objective of achieving brand awareness with 30% of the target market in the first 12 months of business. Goals should be referred back to and monitored throughout the year to see if the business is on the right track or if they should allocate more resources.
Your target consumers & promotion
To ensure your business’ success, your product or service must meet a consumer need. Firstly, discover who your primary and secondary target audiences are. What do they want, how will they use the product or service, and what do they currently use. From understanding this, you can find out which features of your product or service are crucial. By understanding their daily tasks, you can find where to put advertisements to entice them. BroadbandSearch explains media consumption changes by target group, but different segments can be identified by more than demographics. Lifestyle, personality, psychographics and geography are also of high importance. Consider not only women in their mid-thirties, but rather businesswomen working in city offices, whereby you might advertise in transit areas as most catch a train or bus to work. Media has also become online-focused, such as Facebook Ads and Paid search ads.
Your finances
You must understand how you will finance the business to ensure its feasibility, and discuss whether a loan is needed. Budgeting is essential to any business, and be sure to include contingency resources just in case. This is where a business partner may be helpful as another financial resource. You should develop a sales forecast, income statement and balance sheet with an accountant.
Overall, a business plan is essential for every business no matter the size. It is a way to set out your vision, but also a reference point for all your ideas to check that it corresponds to your goals. Start your business plan and increase your chance of success.
