In my years of being a Personal & Professional Development Coach, I've encountered men and women who've had dreams of building a business that never happened, and were still scared to make it happen at the time of our meeting. Some of these clients are in their 50's and 60's, trying to figure out what to do towards the last quarter of their lives.
Let me tell you something.
That desire inside of you to see your dream business come to pass is there for a reason. And that reason is for you to fulfill it.
This is part of your purpose here on earth.
At the time of writing this blog, our country and the whole world are facing a global pandemic. Some people have asked me if this is even the right time to plan for a future business. And my answer is this ...
The best time to start planning for a business is when you've got time in your hands. This is one thing that most people have right now.
You can't start a business without a Business Plan. This is going to be your framework, and what will guide you in the process. If you're borrowing money from a financial institution, they will also require a Business Plan.
Creating a Business Plan takes time; and since you have the time now, what are you waiting for?
THE BASIC COMPONENTS OF A BUSINESS PLAN
Though the Executive Summary is the first part of a Business Plan, it is the last thing you should write.
An Executive Summary contains all the parts of your Business Plan in a condensed form. As a general rule of thumb, the number of pages of an Executive Summary should be 5% of the total document.
Once your entire Business Plan is written, it is easy to create your Executive Summary. All you need to do is focus on the main points of each part or chapter.
This includes the name of the company, the type of business (Sole Proprietorship, LLC, Corporation, Non-Profit), nature of business, and location.
The vision states the end-result. It is how you want to see your business years from now. It is how you want your business to be known for. The mission is how you intend to achieve the vision.
To be the forerunner in contemporary Ethiopian restaurant, serving single plates, and reaching out to a fast-paced and more diverse population by serving authentic Ethiopian cuisine in a contemporary presentation and setting, making customers feel more integrated into the culture, as they enjoy the uniqueness of their own background.
Since this vision-mission statement is too long, it can be separated into a vision statement and mission statement as follows:
To be the forerunner in contemporary Ethiopian restaurant, serving single plates, and reaching out to a fast-paced and more diverse population.
To serve authentic Ethiopian cuisine in a contemporary presentation and setting, making customers feel more integrated into the culture, as they enjoy the uniqueness of their own background.
The business history includes how the concept came about. Your bio can be incorporated with this.
This is a description of the background of the owners. It is like each one's Resume, in relation to the business. If there is more than one owner, this portion is recommended. However, if you are a sole-proprietorship with only you as the employee, you can incorporate your bio into your history, as stated above.
This section should include not only a list of your products/services but a description of each one, and most preferably the prices as well. Including photos is a great way to make the one reviewing your business plan understand everything better. It is also good to include what problem your product/service is solving.
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Market analysis is the quantitative and qualitative assessment of a market. It looks into its size, the various customer segments and buying patterns, the competition, and the economic environment to rightfully position one’s business.
Market analysis includes a study of the demographics (population, age, income, etc.), people’s needs and preferences, and market trends, in relation to the business’ target niche and competitive advantage.
This is where you will be doing all your research.
Who are your competitors? Where are they? What are their strong points? Why do customers like them and what they offer? What are their weak points?
These are just some of the questions you should ask yourself when researching about your competitors.
Customer Needs and Wants
Who are your competitors' customers? Where are they? What do they want? What need is your competitor addressing in relation to the customer? What are they not addressing?
What is currently trending in your business and industry? For instance, if your business is coaching, what is popular in that arena? What are people looking for?
When doing your Market Analysis, make sure to always connect your research to your business.
Who are the people who will be drawn to your product/service?
Below are factors to consider when identifying your target niche.
After doing your Market Analysis, it will be easier to see your competitive edge, or what makes you better than your competitors.
Below are questions you can ask yourself in identifying your competitive edge.
What need are my competitors not addressing that my product/service is addressing?
What market niche do I have that my competitors don't have?
What are my competitors' weaknesses that are my strengths?
What makes my product/service better than my competitors'?
Why will a customer choose me over your competitors?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths include your skills, abilities, experience, competitive edge, and all good things about you and your product/service. Weaknesses are those areas that you are not very strong in, but which you can do something about. An example would be 'being new in the business scene'. Opportunities can include the weaknesses and threats. For instance, if being new in the business is your weakness; then the opportunity is your 'freshness' and how you can make people curious about your business. A threat can be the economic crisis, which can be an opportunity by presenting the value of your product/service to people.
Having your SWOT will help you become more creative, and therefore effective.
A marketing strategy is a business's overall game plan for reaching people and turning them into customers of the product or service that the business provides. It includes the different phases of marketing, from pre-launching to actual launch, to continuous marketing.
Below is a list of marketing tools and methods that you can utilize.
Membership in local business chambers
Tie-ups with other businesses
Operations or Operational Plans explain the day-to-day operations of the business. It includes items such as: business hours, parking, design and layout, inventory, suppliers, systems, pricing, technology, and personnel.
This is the most tedious part of the Business Plan, next to Market Analysis. This is the part where lending institutions and investors will focus on.
The Financials part of your plan will also guide you in your projections, so you can adjust it to be more realistic.
As a rule of thumb, try to be in the middle: not too aggressive, but neither too conservative.
Parts of a Financial Plan
How much money do you need to start your business?
Itemize everything you will need, including rent, utilities, supplies, equipment, personnel, licenses, etc.
Remember that a business does not take off right away. Give yourself some buffer.
These include everything you need to purchase before you start the business.
This includes the day-to-day expenses.
It is always good to make a three to five year projection.
From these calculations, you can come up with your projected Gross Profit.
Gross profit is the total revenue minus the expenses directly related to the production of goods for sale, called the cost of goods sold.
Derived from gross profit, operating profit reflects the residual income that remains after accounting for all the costs of doing business.
Net income reflects the total residual income that remains after accounting for all cash flows, both positive and negative.
Your Business Plan is your blueprint. It doesn't matter how small or big your business will be. Even if you won't need to borrow money; and even if you will be working from home, having a Business Plan will set you and keep you on the right track.
Yes, it can be overwhelming, which is why you need to start NOW.
I can help you dial-in your Business Plan.
I have different Business Coaching packages that you can choose from, based on your requirements and budget.