Starting a business is no easy task. You need to plan step-by-step and action accordingly to make it happen. Paying attention to minutest detail in your business plan is very important. So what is this business plan which according to most of the experts is the first step towards setting up a business. Contrary to what many people believe, business plan is not a simple document prepared for lenders and other investors. It is a guide that describes how the company will be formed and managed. It requires the person who starts a business to review and understand all aspects of the organization and operation, and it is therefore an important management tool.
Many new business operators, carried away by the euphoria generated by creating their own business, drop this essential planning pretext that it is not as interesting as the design of a product or the sale of a service. However, since about 80% of businesses fail within five years after their creation, largely because of a lack of planning and sound management, we can say that planning greatly improves the chances of success.
Research and design of a business requires a thorough analysis of the business in the following areas.
This important function is, in a sense, the “brain” of the operation of your business. All potential business operators should develop vision and mission to understand what they want to accomplish, how and why.
In addition, you should analyze the competition and the market to determine where the business opportunities of the company lie and how they can be exploited.
When developing a strategy, determine what type of market you plan to cater to and then perform a SWOT analysis of your main competitors and your own business. This exercise will give you a good idea of your place in the competitive market. It will also help you determine your marketing strategy, including positioning, compared demarcation of competition and the establishment of the brand.
As most of the income of a business goes into new customer acquisition, it is important that you know your potential customers and know how to reach them, beforehand. Most of the new business operators adopt a marketing approach wrongly, called “the inside out”, in which they plan their product or service first and then seek a way to sell to a loosely defined group located “somewhere in the market.”
However, this approach of “making in the hope they will buy” usually leads to a waste of energy, a fierce struggle on the part of competitors who had the same idea and, often, bankruptcy. Before designing a product or service, business operators must study the market and assess the needs of the clients. They must find market niches not filled, and then shape the marketing of the product or service, and sometimes the product or service itself, to meet these needs.