Can you imagine taking a 6 month holiday – the holiday of your life – without first giving thought to where you would like to go, where you would like to stay, and what attractions you would like to visit? Whilst it may be fun and exciting at first to just set off into the sunset without a plan or care in the world, it would begin to wear a little thin when you get lost and don’t enjoy the towns or cities you’re visiting.
This is why it is important to plan first.
Your business plan gives you the opportunity to objectively look at your options, analyse your market and competitors, devise appropriate strategies, and set your goals so you can hit your targets and have success in your business.
With thousands of people starting and failing in business each year, your business plan will be your blueprint to staying on track and, importantly, saving yourself time and money in the long run.
Why Research Is The Backbone To Your Business Plan:
Consider your research as the backbone to your business plan. The research you conduct now will form the basis of your plan and allow you to objectively analyse each key component of your business plan, namely: the industry; your target market; your competitors; and your operational requirements.
Once you have researched and defined these areas, you can then begin to develop your business plan.
But before your begin your research, take time in thinking about the questions you would like answers to; in alignment with the industry, target market, competitors and operational requirements.
- What do you need to know?
- What problems must be solved in each area?
- Who are your customers? Dependable on the what you wish to be involved with and how you intend to market, there will be certain customer characteristics that need defining such as: geographics, lifestyle, age, gender, customer requirements, motivations, brand loyalties, and so on.
- What type of people would you like to attract
- What type of marketing channels will work best for you?
- What type of product do your customers buy and why?
- What do your competitors do to attract those customers?
- What have been the trends in the industry; and what are the forecasted trends?
- What are the legal or regulatory requirements in your industry / niche?
- What are the costs to starting your business?
- How should you structure your business (i.e. sole trader / company / trust / etc)?
Prepare your questions beforehand so you don’t waste valuable time in re-visiting your research sources to gain additional information.
Your research can be conducted via a number of different methods, including (amongst others):
- Reviewing the competitor websites and marketing material.
- Reading third-party reviews.
- Accessing statistical data by Government agencies and other independent bodies. This is also important to define industry trends.
- Gathering information from trade or industry associations associated with your niche.
- Contacting educational institutions to access research projects.
- Examining the competition: opt in to lists, talk to leaders from competitor companies, and research competitor websites.
- Consulting with a qualified accountant.
- Networking with other people and leaders who are already involved in your industry.
The 6 Key Parts (or Elements) In Your Business Plan:
- Executive Summary: This is an outline that may describe such matters as your background, goals, assets, financial returns, vision / mission, and so on.
- Business Description: Outline your business name and structure and describe your product (or service), industry, your market, customers and so on.
- Competitor Analysis: Outline your strengths, weaknesses, opportunities and threats (SWOT) in accordance with your own business and competitor analysis.
- Sales & Marketing Plan: Outline your sales and marketing strategies, which should also link to your financial plan.
- Financial Analysis: Include an income statement, cash flow statement and balance sheet which also provides a break-even analysis and ratio analyses to determine stability of certain aspects of your business.
- Appendices: Include references, examples, case studies, spreadsheets, etc.