Five Things To Do Before Writing Your Business Plan
Starting a new business comes with hurdles; being prepared for those hurdles—and trying to get ahead of them—can decrease the impact they have on your business. An important step in preparing for the challenges that your start-up might face is writing a solid business plan. What goes into a business plan is easy enough to figure out, but there are more abstract things to consider before you write it out.
Determine your Purpose
Making a profit is important, but it’s hardly the only thing that matters when you start a business, experts say. “Business plans … encourage entrepreneurs to focus on what they are going to do,” said Alan Williams, co-author of The 31 Practices. “This overlooks two more important questions: ‘why’ – why it exists and why employees would want to get out of bed in the morning, and ‘how’ – the values of the business, what it stands for, how people representing the business will behave.” Williams noted that entrepreneurs should take time to identify and articulate the business’ core values, which will serve as your organization’s compass for all decision-making.
Build your Vision
Experts say the key to success is having a clear vision of what you want to accomplish as a company. Before you write a business plan, you should come up with three to five key strategies that will enable you to achieve that vision, advised Evan Singer, CEO of SmartBiz. “Sometimes, less is more,” Singer said. “It’s far better to do three things very well versus 10 things not so well.” Tied in with building the vision for your business is also putting together a mission statement. The mission is the “why” you’re doing what you do From there, it is an easy transition to develop your “value proposition” statement that defines what makes you unique in the marketplace.
Clarify your Business Model
A good financial model should include many of the details you would put in your formal business plan – for example, hiring, pricing, sales, cost of acquisition, expenses and growth. As with a business plan, your model should be revisited and updated as the realities of your business start to unfold.
Identify your Target Market
This can be a tricky obstacle to get through. To help narrow down your market, Grant Leboff, CEO of Sticky Marketing Club, suggests you answer the question, “Why am I uniquely placed to solve the problem?” “If you are unable to answer the question, you either have the wrong target market of the wrong offering,” Leboff blogged. “In this case, more work will need to be done before you start targeting your potential customers.” If what you offer isn’t the most attractive option to the type of client you want, you might need to change you’re offering or define your target market differently.
Test your Business Idea
Go out and talk to industry experts, potential customers in your target market and ask for some honest feedback. What do they think about your business idea? Who, specifically, are you targeting with your business? How big is the market? Will your market buy what you are selling? Who is your competition? The act of writing a business plan will not make your organization successful, but it does give you a map to get there. The forethought put into the plan identifies the milestones with which you can mark your progress.