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- 11 Questions to Help Your Business Start Off on the Right Foot
- Publications & Business Guides
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- A Business Plan Checklist: Key Questions To Answer
11 Questions to Help Your Business Start Off on the Right Foot
This article provides a detailed business plan outline as well as a step by step guide to writing a business plan. I encourage you to read this article in relation with our series of articles on how to write a business plan. Below is our recommended business plan outline.
Every company is different and the business plan needs to be tailored to reflect that, therefore this is more a guideline than a strict template. Our business plan outline is structured so that each section answers a specific set of investor questions about your business. It also offers a natural progression making it suitable for both the investor who wants to read the plan cover to cover and the one who wants to simply jump into specific parts to clarify particular points.
Let me walk you through each section and get into the details of what to write and where to find the information. The first section, the executive summary, is the most important one. It is only if they find this section attractive enough that potential investors will dive into the other sections of your plan to get more details.
The executive summary is all about getting your investor excited in 5 minutes. Do not try to tell everything about your business. Keep it short and to the point. The objective of this section is to introduce the company and its management. The content of this section will vary slightly depending if you already have a business or if you are starting a new venture. If you are writing a business plan for an existing company this is where you would present the key highlights to date.
The idea here is to build your credibility and show to your reader that you have a viable business. The main points you want to touch on are:.
If you are writing a plan for a business for which location is important for example a shop or a restaurant or if you are managing a large business with multiple stores or factories this is where you would describe ideally using a map the main location s of your business. This is one of the most important section of your business plan.
You must demonstrate that your team has a strong experience in your sector and the skills to run this business. If there are any important skill gaps in your team, you need to address them and mitigate them here.
It could be that you are looking for someone with these skills or that you have a board member or a non executive director that can fill the gap. Try to put some pictures if you can. It is always better when one can put a face on a name! And it helps if you are due to meet your investors at some point. The key to writing a good product and services section is to be precise about the product or service you sell, the client you are targeting, and the channel you are targeting him through.
After this section your reader will start thinking about how big, how crowded and how profitable your market is and try to guess what the overall strategy is going to be. You want to send him in the right direction! So be ultra precise, don't say for example "I sell shoes" but "I sell leather boots targeted at women aged who buy online".
By now your reader knows who you are and what business you are in. It is time you show him why this is a good opportunity.
This part is a summary of our article on how to do a market analysis , please refer to the article for more details. The way you look at the market will depend on your type of business. If it is a small business, such as a coffee shop for example, then you need to look at the market on a local basis your town, your street. If you are targeting a wider audience, then you need to evaluate the market at a national or an international level.
When assessing the size of your market, you need to come up with two variables: the number of potential customers and the value of the market. The idea here is to get a sense of how atomised your market is. If you are in a market where there is a small set of high value customers then it might be complicated to compete against more established players and your business is likely to be dependent on a handful of customers meaning that losing one would potentially threaten your business.
Now if you are in a market with lots of low value customers it might be complicated and costly to reach enough of them to get to the minimum volume for your business to be profitable. Ideally you want to be in a market with a high number of medium value customers meaning that there is enough customers to leave room for a few players and that each customers bring a decent amount of revenues.
Once you have estimated the market size you need to explain to your reader which segment s of the market you view as your target market. The target market is the type of customers you target within the market. You need to identify the different segments in your market and explain who you are going after and why. One way to identify the segments is to group customers by buying pattern or demographics.
For example in the fashion market you could have:. This section is where you demonstrate that you have insight on your market. You know what makes people buy! You need to describe the buying pattern of your target customers.
What triggers a purchase? Is it something they need such as food? Is it a value associated with the product or a brand perception? Here you have to explain who your competitors are, how they are positioned on the market, and what their strength and weaknesses are. Some of the items you need to cover are. You should write this part in parallel with the Competitive Edge part of the Strategy section, as the idea here is to find a weakness in your competitors' positioning that your company will be able to use in its own market positioning.
Here, the objective is to show to investors that the risk of having new competitors entering the market is fairly remote.
Hence if you are writing your business plan for a start-up then this section is a bit tricky as you need to show that you will succeed where others will fail! Once again, you can find more details on this section in our market analysis article. In this section you need to details which regulation is applicable to your sector and how you are going to comply with it.
Until now all the sections of the business plan outline we covered were very descriptive, this is where things get a bit more interesting. Strategy is a big word for what is really just explaining your view of the market, how you want to attack it, and why it should work. The first part of the strategy section is the Competitive Edge sub-section which is where you explain your market positioning. The competitive edge part is where you answer investors' favourite question: "what makes you different from the competition?
Hopefully you will have laid the ground work for this section in the previous ones and orientated your analysis of the market in a way that prepares the reader to embrace your positioning. In order to explain and justify your pricing strategy you must touch on the following points:. I won't touch on the two first points which are pretty obvious but I think the third one deserves a bit more explanation.
Setting a price is not easy but there are a couple of techniques you can use to guide you. The first thing to do is to assess if you have control over your prices. It could very well be that you have limited control over your prices.
Now if you have control over your prices you then need to come up with a figure. Here are the two main strategies that you can use to do so:. Cost plus pricing: this consist in adding a percentage margin to the cost of the good or service you are selling. The advantage of this strategy is that you are guaranteed to earn your margin on every sale. The disadvantage is that your price could be below or above what customers are willing to pay for a product or service.
Benefit driven pricing: this consist in estimating the gain procured by your good or service to the customer and set the price as a fraction of this gain.
It is easier to do when your product or service procure a hard benefit i. The advantage of this technique is that it allows you to maximise the price of your goods and services.
The disadvantage is that it usually requires to try different price points in order to find the right market price. It is always a good thing to test different prices. Do one week with price A and one week with price B and compare the results in terms of sales and volume. Ok, so now we know who you will target and how you will price your products.
It is time to explain how you are going to reach those customers. This is the first section where we start to leave aside the helicopter view of the market to really dive into the implementation and execution strategy of your plan. Therefore you need to show your investor that not only you know your market inside-out but that you also have a credible plan to conquer that market.
The best way to show that your business plan is realistic is to get into the specifics of the implementation. Your reader needs to feel that you are ready to go and that he just has to push on a button write you a check to make it happen.
In the marketing plan section you need to show that you have identified the best channels to use to target your customers. By channel I mean both the distribution network online, owned stores, third party network, door to door, etc. You want to start by listing all the different options and then start diving into the ones you picked and explain why you think they are the most relevant in terms of:. This section is where you set the goals for your company.
This is a commitment you are making to your investors and you will be judged on your ability to achieve these goals. It is therefore important that you take time to identify goals that are:. Here you will be judged on your ability to identify and focus on the key objectives to bring your business to the next level.
This will help build your credibility towards your investor and ultimately play a part in his investment decision. From a relationship perspective, being able to over-achieve these objectives will be key if you are to raise more money in the future.
The risks and mitigants section has one key objective: enable you to anticipate any objection or doubt an investor might have on your plan or your ability to deliver it and give you an opportunity to show that:. It is very important to be transparent in this section. If an investor spots a key risk in your plan that you haven't disclosed he is going to think "well I am not sure he knows this market has well as he claims", and that looks bad.
You want to do everything to build credibility and trust with your investors because the moment they start doubting you they will start doubting the investment. This section is where you get into the details of how your company will operate.
Publications & Business Guides
Every business needs to have a written business plan, whether creating or expanding a business. Formulating a business plan should be one of the first things done when starting a new business , because the primary goal of most business plans is to raise outside-investor capital. The business plan is the tool to convince others their investment is worthy. Although a comprehensive and well thought out business plan is important to the success of your business venture, many people drag their feet when it comes to preparing one. But if you are serious about creating a successful business, you need to be serious about creating a good business plan.
You can simply answer the questions using this template and make your own business plan. wifusion.org
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Business plans guide owners, management and investors as businesses start up and grow through stages of success. A business owner or prospective business owner writes a business plan to clarify each aspect of his business, describing the objectives that will anticipate and prepare for growth. Savvy business owners write a business plan to guide management and to promote investment capital.
A Business Plan Checklist: Key Questions To Answer
Which is great, except too many people jump into entrepreneurship without any preparation. Starting a business takes a lot of preparation, and you have to do the work. So many entrepreneurs have great ideas, yet what they need is an actionable plan for getting to the next level. Answering these 11 questions will help your business start off on the right foot and give you a jumpstart on the business planning or Lean Planning process. Entrepreneurship is incredibly enticing because all we hear are the success stories. We read about a year-old who created a million-dollar gummy bear brand , or about a few college guys taking the eyewear industry by storm , and we want in on the action! It makes sense; money and success certainly know how to inspire.
Business Plan: Questions & Answers
This article provides a detailed business plan outline as well as a step by step guide to writing a business plan. I encourage you to read this article in relation with our series of articles on how to write a business plan. Below is our recommended business plan outline. Every company is different and the business plan needs to be tailored to reflect that, therefore this is more a guideline than a strict template. Our business plan outline is structured so that each section answers a specific set of investor questions about your business. It also offers a natural progression making it suitable for both the investor who wants to read the plan cover to cover and the one who wants to simply jump into specific parts to clarify particular points. Let me walk you through each section and get into the details of what to write and where to find the information.