Business Planning for Success
These last months of the crisis has many people rethinking their future, and whether that future remains tied to an employer / company, going back to their job / career. Many have begun to examine whether their career is really what they want to do with the rest of their lives. Some indeed have already succumbed to redundancy programmes and are actively trying to decide if now is an opportunity to follow a different path. Others again may have taken the time to really evaluate if the business idea is something that they can realistically pursue. More again have realised that they really do not want to go back to their old job, the thought of it filling them with dread, and are now looking at how they can use their knowledge, talents, skills & strengths to build something new by themselves.
Whichever category they fall into, one thing that is certain it is not an easy thing to jump into. And jumping in without a plan is almost a sure-fire way to ensure failure. It is not an easy road to start a business, but by creating a business plan (and not just a financial plan), that takes into consideration the elements highlighted in the infographic below, creates a foundation upon which there is a better chance for a solid business to be built.
Having an idea for a product or service (whether a start-up tech type business or a traditional physical product / service) is all very well and good, but if you don’t know who it is for, or whether they would be willing to pay for it or not, who the competitors / alternatives in the market are, and how you will fund it all, then you are potentially risking setting up a business selling something that nobody wants. You could end up being in danger of having a very expensive hobby – you are working on something that you love and enjoy, but you aren’t making any money out of it (to be clear it may be quite a while before you break even/profit – but that is different to making money, as in revenue). This is not to discourage people, stifle creativity or innovation. It is to encourage them to properly make their idea have a better chance of turning in to a successful business. By having a vision, having clarity on who their customer is and why they would buy from you, knowing who your competitors are and what makes you different helps you to define clearly what your product / service is, who it is for, what value it beings to them, how much you can charge for it, and how you can set yourself apart in a world full of competing ideas (many of which are all scrambling for the attention of your potential customers). It also helps you to really focus on the finance side of things. By knowing all of the above, you have greater clarity on what it is you will need to make the business operational – production costs, marketing, will you need staff or will you go it alone, how much does it cost to develop your idea, how much will you be able to do yourself, or will you be better to pay someone else to do it (especially if you are really not skilled in an area – it is worth examining the opportunity costs). Do you have the funds yourself; do you need a loan or investors (depending on what ownership model you want)? Depending on where you are how can you fund the business set-up / licensing costs?
It is a lot to consider, there is no denying that. It takes a lot of time and effort. And it is necessary to do a lot of research, get advice from others, seek out professional services. It isn’t expected that you would have all the answers yourself. If you have a great idea but are not business oriented, maybe seek out the services of a business coach (like myself) or a SME business consultant to help you figure it all out and understand what it is you need to know so that you can be more certain in the that potential of your idea and what it will take to make your idea a reality.