Starting a venture is the ultimate self-challenge, so give yourself every advantage — be prepared! You already likely know that you’ll need a basic business plan, but do you know why?
One of your first steps as an entrepreneur should be building a business plan, a map of action, which allows you to think through four fundamental questions as guideposts along your journey.
Every basic business plan should cover: vision and focus, customers and market, finance and resources, and the implementation/action plan.
Part 1: Shaping the Vision and Focus of Your Business
A concise statement of your vision lets your customers and business partners know what your venture focus is and what your objectives are.
As an example, Nike’s vision statement is: “To bring inspiration and innovation to every athlete in the world.”
Tory Burch’s vision statement looks like this: “Tory Burch is an attainable, luxury, lifestyle brand defined by classic American sportswear with a diverse sensibility”; and its mission is “to create clothing and accessories that are affordable yet stylish and wearable for women of any age.”
Be concise and to the point.
Who you will be, what you are trying to achieve and how to focus.
Part 2: Connecting to Customers, Identifying Markets, Differentiating from Competition
Who are your customers and what do they care about? In a noisy marketplace, what makes your products and services the customers’ preferred choice? What are the features and benefits that will differentiate you from the competition?
In other words, what is the fundamental value proposition of your business? What combination of marketing techniques including traditional and digital marketing, as well as social media, will reach your customers?
When I started my real estate company in Nantucket, many competitors were designing and building homes for visiting tourists and the employees who worked in the businesses on the island. I knew I had to focus the design of my rental apartments to suit a particular group of customers better than all of my competitors. By talking to a wide range of potential customers, I found an underserved niche of customers — management employees of resort businesses. These managers wanted comfortable, reliable housing close to their businesses, a cut above standard employee housing. The result — long-term contracts with repeat business customers!
How will you identify and delight the best customers for your venture, how will you differentiate yourself from the competition, and how will your customers find you?
Part 3: Financials — Revenue and Cash Will Drive Your Business
Decisions about how and when you create revenue, manage cash flow and build capital fuel your business.
For help building your first financials, see the U.S. Small Business Administration’s (SBA) “Start and Grow Your Business Guide.”
What are the sources and uses of funds for a simple run-through of your needs? Do a walk-through of a month to a year of business activity, based on your customer research, estimating how many customers you will attract, how many sales you are likely to have, and what prices you can charge.
What cash resources you will need, how you will build revenue and whom you will rely on to help build your business including employees and business partners.
Part 4: Implementation Plan: Taking Action
What are the next three things you need to do?
Remember that timing is everything in launching a business. Planning when you begin is important. Do you have customers lined up and waiting to buy? Do you have “Open for Business” events and marketing efforts ready to go? Are your operations ready to take orders and distribute your products/services?
You will want to organize a wave of announcements and events over the year and have gathered as many customer contacts as possible before you open. Once you open your business, give it your all! You will find ways to improve and shape your business every day.
Plan out the action steps for the first three months of your business. Then the following six months. Then what you want to accomplish in the first year. Set targets, measurements and goals.