The following is adapted from “Think it Thru: Business Planning,” available at select bookstores and on Amazon. The book has a corresponding Learning Management System (LMS) with additional tools and resources. “Think it Thru” proceeds go toward funding assistance for small businesses.
The first step to becoming an entrepreneur is realizing how much you do not know. The second step is realizing how much you need to know.
Planning is a vital step in the journey to creating a new business venture. You think through the pros and cons. You consider the enormity of the effort. You think about your resources, such as time, money and expertise.
You ask yourself:
“Do I have the time to dedicate to starting a new business? Do I have the financial wherewithal to fund the enterprise? Do I have the expertise or skills to support this initiative?”
These are all good questions to pose before taking on a new business venture.
With any startup, questions are best answered through the more formal process of business planning. This effort forces you to focus on finding answers in a constructive manner. It makes you face your fears, think through your dreams, and ponder the what-if scenarios.
A business plan can seem like a daunting task that can easily be overwhelming. The goal is to break it down into small, easy to consume steps that you can then walk through.
Let us roll up our sleeves and discuss the elements of building a business plan:
The crucial steps to business planning
- Create a vision for your business
- Research the industry
- Identify your customer
- Build a market analysis
- Specify the products and services
- Produce a marketing plan
- Generate an operational plan
- Structure the management and organizational teams
- Formulate the startup expenses and capitalization
- Establish a financial plan
- Reflect on all the exercises to craft an executive summary
Here, we’ll break down the first three steps even further:
Creating a vision is an exciting part of the business planning process. Dream big, because you can always scale back. The fundamentals of a vision include mapping out the details of the services, products and environment you plan to offer your customers.
You need to ask yourself what your goals are. Are you starting the business to make money, to achieve a dream, or to offer a product or service not readily available today? Are you fulfilling a personal goal of achievement and self-satisfaction?
Often, you will find that your vision is a mixture of many of these goals.
All businesses belong to a specific industry. Industries evolve over time and have trends that should be explored. It is important to describe your industry, the history, important influences, and current trends that are shaping the industry.
The purpose of this exercise is to gather a general description and basic information that allows us to better understand the industry we are entering.
It’s time to identify your customer more in depth. This customer represents your target market. Having clarity about who your target market is will allow you to properly create and execute targeted marketing efforts.
You should clearly identify the following customer traits:
- Demographics: Age, social status, gender, education
- Lifestyle: Activities, interests, values, needs, opinions
- Location: Proximity and environment (city, suburbs, or country)
- Demand: What is their pain point or what need are you trying to fill?
Describe your customer in detail, not just generalizations.
Ask yourself, who is your target customer? What kind of person are they? It is also very helpful to describe the type of customer you do not want. Try to describe these customers and put yourself in their shoes. Explore their demands and desires that your company can fulfill.
Business planning is a journey that requires you take several steps in order to get to your destination, and these crucial steps makes sure you follow these phases in a logical sequence on your journey to business ownership.
“Think it Thru: Business Planning” is available now and can be purchased via StartupNation.com.