Writing a Business Plans
Before writing a proposal, you should have done your research. Is there a viable market for the product or service you want to sell? This always involves secondary research (data already collected), but sometimes it involves primary research (data you collect through surveys or observation).
Regarding secondary research, take advantage of your competitors’ business plans. There are a few valuable online archives of business plans that feature companies that have successfully penetrated the market based on a well defined and executed business/marketing plan.
Take the time to study the market through a successful company’s eyes and consider what your company will offer that distinguishes your product or service from the rest and gives you the competitive edge.
Put yourself in the investor’s shoes. Ask yourself, “If I were going to invest X amount of dollars into a concept or idea, or even a product, what would I want to know?” Gather as much helpful and credible information as you can. Depending on your product, you may need to search long and hard for relevant information. Most importantly, do not lose heart if finding information, statistics, and graphs is more daunting than you initially anticipated. Your hard work will pay off when a potential investor becomes an actual investor!
To determine your targeted market, write down the demographics of the people who will use your product or service. How old are they? What do they do for a living? Will mostly women use your service? Is your product or service attractive to a particularethnic or economic group of people? Will only wealthy people be able to afford it? Does your ideal customer live in a certain type of neighborhood, such as a suburb with grass lawns, in order to use your lawn mower?
Answering these questions about the demographics of your prime market will help you establish the clear characteristics of the people you need to reach.
If you’re selling soap, you may believe that every dirty body needs your product, but you can’t start with the entire world as your initial market. Even if you’ve developed such a ubiquitous item as soap, you need to identify a smaller, more targeted customer groupfirst, such as children under eight for the bubble gum scented bubble bath.If your soap only works with pumped well water without fluoride, you must acknowledgeMthat your intended market has geographical limits as well.
Establishing the size of your potential market is important, too. This will be easier once you’ve completed the demographic analysis. Then you’ll be able to research the numbers: How many car mechanics, house painters or bathroom contractors are there in any given community? How many children in the United States are currently under the age of eight?
How much soap will they use in a month or a year? How many other soap manufacturers already have a share of the market? How big are your potential competitors? And where do you find the answers to all of these questions?
Identifying your market is one of the great satisfactions of starting your own business. You’re thinking about the actual people who will use your product or service and how pleased they will be buying it as you are selling it.
Define Your Company: What will you accomplish for others? What products and services
will you produce or provide? Write down all the specific needs your company will satisfy. Potential investors need to know that your business will be meaningful and marketable to people who can use your product or service. So concentrate on the external needs your company will meet.
What will your product or service enable people to do better, more cheaply, more safely, or more efficiently? Will your restaurant make people’s palates delirious with new taste sensations? Will your new mouse trap help people capture mice without feeling sick to their stomachs? Will your new bubble gum scented bubble bath revolutionize the way children agree to take nightly baths?
Think of all the positive benefits your company will provide. Write them down. Admire them.Absorb them into your consciousness. Believe in them. These are the primary motivators that readers of your business plan will respect and value.
Choose A Winning Strategy: How will you distinguish your product or service from others? Although there are millions of types of businesses, there are actually only a few basic strategies that can be applied to make any enterprise successful. The first step in selecting an effective strategy is to identify a competitive advantage for your product or service.
How will you establish that your product or service is better, cheaper, more delicious, or more convenient?
How can you make your company more noticeable than your competitors? What restraints in your business or its industry might determine which strategy you choose?
Your competitive advantage may include designing special features not found in rival products. It may entail superior service characteristics such as speedier delivery, a lower price, or more attentive sales people. Perhaps you’re establishing an image or brand of exceptional quality or reputation.
Does your product or service bestow a certain status on its users? Does it create more profits or other benefits for your customers’ own endeavors? Perhaps you want to position your mousetrap for a primarily upscale market because the best design requires titanium and manufacturing costs will be so expensive only rich people will be able to afford your product.
But maybe the mousetrap is so fantastically effective that wealthy people will want hundreds of them around their vast country homes and polo pony barns. You must have a reason why your business will succeed. This is the competitive advantage your product or service will deliver.
Once you’ve established the competitive advantage, you will be able to select the best strategy to reach your goal.
Develop a Strong Marketing Campaign: How will you reach your customers and what will you say? Entrepreneurs, especially inventors, often believe that their business concept is so spectacular that promoting their product or service won’t be necessary. Sort of a “build it and they will come” attitude, especially if what you’re building is the proverbial better mousetrap.
One of the most common flaws in plans is the entrepreneur’s failure to describe exactly how customers will be reached and how products will be presented to them.
Potential investors, staff, and partners won’t be convinced that your idea can succeed until you’ve established well-researched and effective methods of contacting your customers – and the assurance that once you’ve reached them, you can convince them to buy your product or service.
Marketing describes the way you will position your product or service within your targetmarket and how you will let your potential customers know about your company.
Positioning your company means concentrating on the competitive advantages you have identified: will your product or service distinguish itself by its superior quality, its revolutionary features or its ability to make your customers happier than they’ve ever been in their lives?
Marketing helps you focus on identifying your competitive advantage so you can position your product or service. It also establishes the best ways to reach your potential customers and what to say to them.
When you have the right marketing campaign in place, you have an operating plan to gain market share, generate revenue, and bring your financial projections into reality.