You are probably looking to start a business and are not too sure how to create a business plan. Not to worry, we have you covered. The following paragraphs will set a list of things you should consider including in your business plan to help you assess your product or service.
1. Executive Summary
Your executive summary is a concise blueprint of your company’s goals and purpose. It includes:
- A terse detail of your company’s product or service
- Your company’s objectives
- A thorough description of your target market
- A strong rationale for business success inclusive of your business competitive advantage and its competitors
- Funding needed
- Potential for growth
2. Overview and objectives
Your overview should answer these questions:
- What product/service you will provide?
- Explain what problem your product solves and how the product will solve your customers problems.
- Needs for running your business
- Who are your customers and how do you intend in servicing them?
Objectives are your business goals. A guide to the perfect objectives is to ensure your objectives are SMART (Specific, Measurable, Achievable, Realistic, and Timely). In this section, your history and vision should guide you in identifying your smart objectives.
3. Products and services
In this section, a thorough description of your company’s product or service and its competitive advantage should be given.
Questions to keep in mind when writing about your products or services include:
- Is your product or service currently on the market?
- The length of time you require to launch your product or service to the market
- What is your competitive advantage? What makes your product or service different from the ones currently on the market? If there are any competitive advantages or obstacles, how do you intend on overcoming them?
- What is your pricing strategy? Will your pricing strategy allow a profit margin?
- Are you outsourcing any part of your product or service? Is the supply chain sustainable to avoid shocks such as COVID-19?
4. Market opportunities
You can identify your market opportunities through market research. From your market research you should be able to analyse and assess consumer demographics, purchasing patterns and seasons, and eagerness for consumers to accept new products or services.
While finding your market opportunities, here are some questions you may want to consider:
- The size of your market and your market cycle. The market could be growing, stagnant or even declining.
- At what level is the industry you’re entering? Growing, stable, declining?
- What is the market segment suitable for your product or service? What is your consumer demographic: income, age, employment etc?
- Do you want to adopt a cost leading strategy or a differentiation strategy?
- How will you increase your market share? What is the trajectory of the market and its needs? How will you keep up with market trends?
5. Sales and marketing
Providing fantastic products or services is as good as useless if no one knows about them because your business objectives will probably not be met. A marketing plan to make target customers aware of the product or service and how to retain them is important. Marketing Is so important that Apple Inc once spent $1.8bn dollars on ads (Jacqueline, 2018), Amazon Inc spent $11bn a year in ads etc.
Here are some things your market plan should address:
- The strategy used by your company to promote your product and the rationale for adopting this strategy.
- Identify your target market, the value proposition if your product, marketing campaigns and assessments metrics to measure efficiency of the marketing strategy.
Remember that your marketing plan is not static and should evolve if need be.
6. Competitive analysis
Seeing as the business space you will operate will likely include other businesses, to survive and grow, you should analyse current competitors and the threat of new entry into the market.
To create a competitive analysis for your business plan,
- Analyse your primary competitors and their strengths to compare against yours. For example, prices, services etc.
- Analyse competitor’s weaknesses and turn them toy our opportunities.
- Identify your competitor’s objectives and their objectives. Is market share their priority? Do they seek premium customers?
- What is your competitors marketing strategy? How do they advertise, what is their public relations like?
- How will your competitors likely react as you enter the market?
- How do you intend to grab market share?
Analysing current competitors is important but analysing the threat of entrants is equally as important. If you are entering a market, you are most likely entering because of the feasibility of making profits and guess what? You will not be the only one thinking that way, other businesses too will want to enter the market to capture value, market share and profit. You do not want to be taken by surprise by entrants, you want to always keep up with competition.
To assess the likelihood of entrants these will likely be the characteristics of the market
- High profit margins
- Easy and inexpensive to enter the market
- Fast growing market
- Little competition in the market
- Supply and demand do not match
This section will include any processes required to run the business. To analyse your operations your business plan should answer the following questions about its operations.
- Necessary business supplies
- Initial and future staffing requirements
- Relationship with primary stakeholders
- How operations change as business growth occurs. How will the business adapt if targets are not met?
- What is the business organisational structure?
- Insurance and Patents?
- How will daily operation be run?
8. Management team
The management team is important for the success of a business. Assess the skills, experiences, duties, resources, and cost of your management team.
9. Financial analysis
Availability of finance is very important to keep a business running. It is so important that it could be some firm’s competitive advantage. Some financial documents necessary for your business are:
- Income statement
- Cashflow statement
- Operating budget
- Breakeven analysis
- Balance sheet
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