• Developing a business plan is an ongoing process, especially after your business is up and running. Always keep it up to date. Things change. So SHOULD your business plan.
• You will make mistakes. Having a plan won’t make you the Man of Steel, but it will help you make better decisions with the ability to adapt and bounce back.
• It will take longer than you think. So what? Time is going to pass anyway so you may as well get started now.
• It won’t be easy, but it will be worth it. Hey, it beats working for someone else, you know?
• Don’t listen to naysayers. They’re usually people without dreams.

Above all else, have fun! You’re taking control of your life. Congratulations!

1 – Product Vision and Potential

Start your plan by thinking of the end. Why? If you don’t know where you’re going, how will you know when you get there? You have to know up front what you want to do with your business to set the tone for your plan. Do you want to grow this business then sell it for a profit later on? Do you want the business to be a legacy that will last your lifetime? Do you want to be such a household name that you become the fifth face on Mount Rushmore? Your vision should summarize that.

Let’s consider three key questions that basically become the essence of your plan and are critical to your business success:

• How are your products/services different?
• How will you communicate this difference to your target audience?
• Do enough people care about this difference to change their behavior and use your products/services instead of the ones they already have?

These are important questions. Write them down, think about them, and then modify what you’ve written until you feel that you have clearly answered the questions. This may all change over time, but you’ve got to start somewhere.

So let’s get started! 

2 – What is your brand and who is your competition?

A brand involves all the products/services you offer and the only things that count are your customers’ perceptions of those products/services and your company in general.

Brand, like beauty, is in the eye of the beholder.

In addition to brand, differentiation—setting yourself apart from your competition—is equally important. You’ve got to stand out from your competitors. But you can’t do that until you know who your competitors are and what they’re doing. That means research.

I know. You still have nightmares about term papers that are late. Well, if you think doing research is painful, try losing your business—your dream— because you didn’t want to do any. You’ll find yourself working for someone else, cutting back on cable channels, wearing a tie or high-heel shoes to work (or both). Now that’s a nightmare!

Developing Effective Market Research

Define Your Target Customer/Client

Who are your customers/clients? Identify the particular areas of the total market you are targeting. Are you appealing to builders? Chefs? Quantum physicists?

Understand Your Industry, Sector, and Niche

Clearly identify the general industry for your products or services. For example, apparel. Identify the sector within that industry for your products or services, such as t- shirts. Identify (if appropriate) your niche within that particular sector for your products and services, like say, t-shirts featuring stars of major league curling (if this is the case, we’d suggest broadening your niche).

Understand Your Competition – Find out exactly who your competition is. Compare them to yourself.

Who are your competitors? How big are they? What are their strengths and weaknesses? How do your products/services compare to theirs? Some simple research tools to use are Google and Amazon to ensure you are competitive.

Once you have this kind of information, update it regularly. This will help you continue to strengthen your brand and set yourself apart from your competition.

3 – Do you have a plan to make money?

Well, of course, you do. That’s why you started a business. Actually, it runs deeper than that. You need a “pro forma income statement.” I know what you’re thinking: “A pro forma income statement? Wow! Is it Christmas already?!”

What it does is allow you to change your estimates and see the impact on profitability. In particular, price, marketing, sales and profit interact, rather than being independent, as in most statements. This is not to say that that’s what they will be. It’s a model for you to manage.

The pro forma is what investors read. Unfortunately, few entrepreneurs understand the importance of realistic forecasting, and offer up ridiculously over-blown projections. Naturally, you can’t know for sure what those numbers are going to be. By using our unique template process, however, your projections will be realistic, doable, and, therefore, refreshing in the eyes of investors.

The forecast starts with specifics that help you develop an understanding of some key components of your business early on:

• What are your sales volume goals?
• What is your average selling price?
• What does it cost to produce one unit?
• What are your marketing costs?
• What are your labor and administrative costs?
• What will your profit be?

The Operating Profit Model Template in the Financial Statements link below is a valuable tool to help you figure all that out, and it can be tailored to each individual situation. Its flexibility allows you to input various financial scenarios and to evaluate the results. It is also a critical tool in understanding and developing your plan as you acquire actual information and proceed with the next steps.

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4 – What is your marketing plan?

What is “marketing?” Is it advertising? Yes. Is it promotion? Yes. Something newsworthy? Yes. Public relations? Yes. Is marketing just about anything that gets your brand out there for the public to consume directly or subconsciously? Yes.

Your plan must start with a positioning strategy. In other words — seeing where your business fits in the overall marketplace:

What parts of the marketplace are you targeting? What are your key selling points? How are you selling your products and services? Via the internet? In a store? Direct selling? What is your pricing and package policy regarding promotions, service, delivery practices, warranties, etc.?

5 – What is your Internet Plan?

In the earliest days of the web, a company’s “internet plan” was that they had a plan to be on the internet. Today, you can get just about everything on the internet. You can even buy a spouse for $20 a month. Uh, let me rephrase that. For $20 a month, you can belong to a dating site and look for a soul mate.

With the increasing usage of cell phones as tools for buying, the internet has become the “mall” for mobile consumers. For business owners, it’s far more than a place to promote yourselves and sell your wares. The internet has at last become what it was once touted to be—an information superhighway. Look:

Market research and information are easily accessible for any business

A website defines your business and provides information

Tools like social media, advertising, email, SEO, P.R., PPC (Pay-Per-Click) attract and inform customers>

Selling via your website, retail sites like Amazon, or flash-sale sites like Groupon and Gilt.

There are few tools in your toolbox that are more vital than the internet which is why you need to tap into its unlimited potential and power to enhance your business. Truth is, if you don’t have a website, you’re not really in business.

6  – Do you have an operations plan to deliver what you sell?

Logistics and operations. What they mean is the complete step-by-step process of taking raw materials and turning them into finished products that your customers buy by the millions, making you so rich and famous that you’re now dating one of Hollywood’s A-list stars whom you will marry and divorce within six months. Or something like that.

Because of the number of steps in getting a product or service to market, each one of them is a unique, ongoing chance to improve sales, profit and your competitive standing. They also present great opportunities for your business to increase efficiency and to further differentiate itself. You need to think about and explain (even if you are a service business) how you will integrate the following:

Who are you selling to and what are your plans for distribution? Product sourcing and services? Forecasting, merchandising and service planning. Customer service practices.

7 – Do you have the right organization to execute your plan?

Experience and expertise are probably the most important factors in successful startups. Well, that and drinking a lot of coffee. To get your plan to work, you don’t need to be a five-time Jeopardy® champion, but you do need to surround yourself with people who have the skills you lack (Be smart; learn from them).

Virtually every success story in startups involves great people and great energy. In contrast, every failure usually involves poor performance… and a lack of coffee. So:

• Balance your organization. If you’re a creative, right brain thinker, you probably hate everything financial. If so, hire an accountant. (If you’re an accountant looking for work, check out creative, right brain companies.)
• Empower both your staff and outside resources. Let them be all they can be without joining the Army. Happy employees = happy customers. Respecting and helping staff, suppliers and customers can go a long way.
• Things like best practices, guide books, incentives, workshops, and systems can all show respect for your organization and improve its effectiveness.

8 – How can you develop, test, measure and adapt your idea?

This is a process that needs to be done from time to time to keep you current in the marketplace. You should consider small tests as much as possible. These methods will give you regular feedback that will help you better understand your potential for success and should be included in your plan:

Small product runs. Testing your marketing tools. Using different pricing. Market research tests. Listing on places like E-Bay, Amazon and Etsy, demonstrations, etc.

The only caution we recommend is not asking your mother to be part of your test. If you argue with mom, you’re either going to lose or feel guilty about winning.

9 – Modifying the plan for various users

While the business plan is designed for you, its built-in flexibility allows data you show investors, suppliers or others to be easily configured and printed for each party’s specific viewing needs. This unique feature means information that is not appropriate for certain parties to see can be excluded for their viewing. However, if the IRS or FBI shows up, you’re on your own.

We offer a free hands-on initial consultation to evaluate your business and review any information you have developed. The outcome of that effort is suggestions for next steps.

A sample of your ideas will help us tell you not only what’s good, but more importantly, we’ll tell you how you can make it spectacular. We will also provide you with a roadmap or proposal of how we can help you with the process. Developing a business plan is not easy and takes lots of effort. But remember the following quotes: