When starting a business, you should learn about writing a business plan. It is usually observed that, despite having a great start-up idea, most businesses are not successful.
According to common statistics, within the first 5 years of operation, 90% of businesses fail. Of the other remaining 10%, only 1/10 businesses last the first five years.
So what causes some businesses to fail while others prosper? There may be several reasons including poor product, customer service, logistics, or cost management. The major reason, however, is the lack of a business plan. Business plans help define goals and achieve them.
If you take the time to set concrete but achievable goals to plan success, it can help you realize your dream and fuel your business to flourish. We have compiled an all-inclusive list of areas that need to be considered while writing a business plan. These will help you in defining your goals and the path your business needs to take to achieve them.
Step 1: Define your vision
When you start a business, you might have a clear goal in mind and know exactly what you wish to achieve with your business. However, after some time, the clarity of your vision can become blurred and you’ll forget some of your brilliant ideas. Writing down your vision for the company will help you define it as well as identify its mission. All daily activities of the business can then be aligned with your vision for the business. This should be the first step of writing a business plan.
Step 2: Set your goals and objectives
Never assume that your goals need to be small to accommodate your limitations. Think big and clearly define your short-term goals. These are the ones that you wish to achieve within 12 months. Mid-term goals are those that will take between two to three years and long-term goals are anything that will take longer.
Consider all aspects such as revenue, the number of outlets you want, the number of customers you need in your database, and target population and age groups. The amount of passive income that needs to be generated is also important.
Step 3: Define your unique selling proposition
What is it about you that is different from the crowd? Your unique selling point (USP) will make you more attractive to potential customers. It could be anything from additional services to personalized customer service. You can even offer them a better after-sales warranty and support.
While writing a business plan, you need to highlight the extras that your customers are getting from you to make your business stand out.
Step 4: Know your market
It often happens that you have a brilliant idea, but someone else has already started a business with a similar plan. This is a very common occurrence, but you should not let this stop you. Several businesses can provide the same service and still survive since the marketplace is huge! It can sustain multiple businesses.
You should know your market like the back of your hand. Research and find out how many competitors you have, what services they offer, the current and future trends, and certain benchmarks. These benchmarks can include a growth ruler over profit margin. Once you know the inner workings of the market, you can manipulate them in your favor. This is an important part of learning how to write a business plan.
Step 5: Know your customer
This goes without saying: customers are the most important part of any business. Today, customers are spoiled for choice, having what seems like thousands of choices for every product. So if you want them to buy yours, you should know what your ideal customer wants. This is the reason you need to define your target populations and research their habits for writing a business plan.
Understanding the motivation behind customers’ actions can help make your business successful. You can focus on the areas that grab your customers’ interest and stop waiting on the rest. Put yourself in their shoes and then think “What would make them choose me each time?” Write down the ideas and implement them.
Step 6: Research the demand for your business
Perhaps you have already studied the supply and demand curve. If you haven’t, however, there may already be ample demand for your product. Find out the demand before investing in the new business. The basic rule is that demand should be more than supply.
If this holds true for your market, your business will have much more chance of thriving. If the demand is less than the supply, your business will eventually go kaput. So do your homework and gather as much information as you can. You can do secondary research right from your home over the Internet or your Public Library. You can even visit government offices for this information.
The best option is to do primary research where you directly interact with your target audience. This can maximize your knowledge of their preferences and how ready they are to buy your product. So, note down all the interesting ideas you get and put them towards increasing the demand. Be smart and invest your life savings only after ascertaining that there is a demand for your product.
Step 7: Set your market goals.
Now that you have finished the research and defined your business’ vision, the next step in writing a business plan is setting out marketing goals. These are those goals that define how your product would look, what it will cost, how you’ll distribute, and in which ways you can promote it. Most businesses plan this, but they neglect the most important areas.
You should set up measurable marketing goals that will help you achieve your primary business objective. Variables like the number of products you’ll sell, your product development strategy, your price margin, delivery method, and promotion plan, should all be duly considered. When you ask yourself these questions they will help to find the goals for marketing your business.
Step 8: Define your marketing strategy
Now that you have your marketing goals, you need a plan to achieve them. How many products do you need to produce and sell and at what profit margin so as to get your desired revenue? What will be your system of delivery and your coverage area? What will be the strategies to promote your business?
Be very specific as these will translate to action and your ultimate success or failure. Plan for every eventuality while running a business plan. This is a very vital step of writing a business plan to acquaint yourself with it so you can navigate yourself with each point.
Step 9: Take action
And of course, without action, all else is a waste. This is the #1 part of writing a business plan. You can plan all you want, but unless you do the actual work and bring customers to your storefront you won’t earn anything. Even if you find that according to the business plan, your idea isn’t viable, don’t give up. There are thousands of other ideas out there and you can ultimately find one that suits you.
If you wish to be healthy, wealthy, and happy, there is a business waiting for you to grab it. Your business plan will provide the direction and focus, but you will need to take the first step. Writing a business plan isn’t difficult if you know what you should focus on. Now you have an idea of what is important and how you should tackle the task of writing a business plan.
Good luck, may you plan, and grow, a prosperous business! Give OCGnow a call today at (904) 600-3600 to help with every aspect of getting your business up and running successfully, including writing a business plan.
This post was originally published on 1/23/2020 and updated on 11/11/2021 for accuracy and a larger scope of information.