So you have a great idea about a particular product or service, but don’t get swept away in the emotional high. Examine the marketplace that provides the context for what you’re offering. Are there competitors? How many? How are they performing?
Also, research the process of your product or service. Where will your product be manufactured? How much will that cost? What hardware do you need to offer this service? Do you need a brick and mortar storefront, a mobile unit, or an online store? How will you effectively market your product?
Find the Right Crunchy (Numbered) Peanut Gallery
It’s important while considering these questions to analyze hard numbers because numbers cannot lie. Feelings and intuitions, on the other hand, can be misleading. Find pragmatic but positive people to discuss your idea with. Negative people don’t feel like anything will succeed, so their opinion may not be helpful. At the same time, people with big dreams but little interest in practical details might also give misleading encouragement.
Executive Summary and Description
The opening part of your plan will outline what you’re looking for and describe your business in concise terms. Describe the industry as well, so the reader can position your business. It’s important to clearly introduce your business so your reader won’t get lost in the specific details.
Market Strategies and Competitive Analysis
Analyze the market. How will you enter it and compete with established businesses? What type of clients are you targeting? What are the strengths and weaknesses of your competitors? What barriers will you face when attempting to enter the market?
D&D and O&M
No, D&D does not refer to rolling twelve-sided dice and moving small figurines around a fantasy landscape. It stands for Design and Development, which entails describing your product and the various stages of its development, including manufacturing, sales, delivery, and implementation. The Operations and Management component will detail each department’s role within the company, and how those departments function together.
Financial Analysis
Now is the time to crunch numbers. What will your expenses be for materials, labour, management, marketing, and any other miscellaneous areas of business? What are your expected profits over the course of the first year and beyond? This is the section that can make or break your business plan when setting it before a banker or investor.
Reality Check
Once you’ve assembled your plan, return to your peanut gallery and see what people think. We can often become biased when it comes to our own ideas, so running your proposal in front of new eyes is an excellent way to do a reality check on your thinking.
Also, if Australian, the following figures may interest you. There are very few businesses that survive the first 2 years. The SBA states that only 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10.
The main reasons for their failure are many, but failure to plan properly rates as the biggest problem.
