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I've come across a great starting point, but need some ideas based on the information above:
How has writing a business plan helped you?
Thanks for any insight!
Current Strengths, Weakness, Opportunities and Threats is the starting point. If you don't realistically and honestly look at these objectively your plan will fail.
To properly plan you must have some goals in mind. Many equate this to how much I want to make, but gross and net sales really can not be calculated until you have significantly more information.
Your SWOT assessment will help determine goals. Your strength obviously are tied to opportunities, and weaknesses to threats.
In general - you need to capitalizs on the first two (strengths, opportunites) and work on the latter so that next year (or a new plan term) some previous weaknesses are now strength thus opening up new opportunities.
An in depth look at competition based only on your current SWOT/Goals. Many companies fail here because they target the wrong competition. Example: industries leaders - is good to note these but if a software developer clearly Microsoft, Macromedia, Adobe are in a different league. Competition should be local (or directly related to the geographical areas you will be attempting to develop a market share. Everyone loves to believe they are a international player but if these league players are the ones you concentrate on, your Industries analysis will be paper fluff without a purpose - if you can't compete at the level of another company -- they are not your competition.
In general - your potential product/service buyers. Who can you, in the most easiest way target and produce a sale. Start small "niche" and expand out from there. It's useless to say in "Web design" any company/individual that requires a web site.
Dissection of an overall market first by business size/type, then by industry, then by industry segment, then determine geographical regions that you can realistically saturate.
Again SWOT helps (but remember this was a very basic analysis and overview). In design target specific industries & segment works well since after doing a few you have developed a certain understanding of what they (potential client want) rather than what you want to give them.
Marketing, Promotion, & Sales Strategies
Market reach, share, and penetration is based on four primary principles.
Awareness, Interest, Desire, Action
Awareness - get the word out
Interest - directly associated with need. The target company/person must have a need for you. If they don't - it does not matter how much time or free stuff you throw their way, they will not pay.
Desire - associated with benefits to the client, which are loosely associated with your Unique Selling Points. Desire however, is where many companies get it backwards. Rather than focusing on the target, companies tend to focus on themselves. (simply put -- "you and your" are good, where "I, me, us, and we" are bad for creating desire.
Get that targeted person to act on the impulse that "desire" created.
Each of the marketing consideration should be planned. Professional marketing company's like to refer to this as "creative treatment", but really all it is -- making a potential customer aware that you exist, identifying that you can meet (or exceed) their needs, showing them how by proving the benefits, and making sure that they have direct and immediate access to you before they have an opportunity to find a competitor.
Promotion, & Sales Strategies
If you have accomplished all of the above -- now you can look at "achieving your goals" which is always tied to available revenue.
Sales and Promotions strategies however should not be based solely on current available resources. Assuming this means - you're intent on:
1. not making a dime, or
2. not intending to re-invest returns into more marketing, sales, promotions.
You should assume 10 - 20% of any returns flowing back into these strategies, thus have 10 - 20% of assumed moneys in your budgets even before you start.
There is alot to cover here but - in general start small again and work up. In addition, risk management is a very important factor - if you have used previous strategies and there was fair return, likely the same will occur again. If you don't know... this is what kills many companies, -- not evaluating individual strategies on their own merits.
He who knows not that he knows not is a fool and determined to make the exact same mistakes again and again.
Forecast sales based on current knowledge and regardless on success or failure determine the cause/effect and improve upon this.
These are the basics or any plan... but ultimately if you develop a plan, work it and don't stray from it.
<Added>It's a proven fact that the most successful people in business today... gather all the facts and make their minds up very quickly and slow to divert from their initial decision. They stay the course.
In contrast -- those that dabble on specifics are commonly slow to reach a decisive action, and in turn change their course quickly, and often and much less successful.</added>
When the term is over - anlsysis all outcomes and develop a new one based on what was learned.
Please note: this is not all encompassing and really only an overview, there are many key concerns not listed. (the post was getting too long to be of any value).
[edited by: fathom at 5:19 pm (utc) on Jan. 5, 2003]
I totally concur and will add that as a business owner, whether just starting out or a veteran, you should always:
1. Evaluate how your business is doing on an ongoing basis. Use the strategic/business plans that you took the time to write up as your guide. It's what they're there for.
2. On an annual basis, sit down and outline/write up a new marketing/strategic plan.
joined:Oct 23, 2002
As always, Excellent post fathom.
For sure, thank you for such a well thought-out post.
These are great things to know.
I've developed a decent outline. The most difficult aspect so far is the fact that I don't have too much to draw on - experience wise say for financial projections and calculating possible profits down the road. I figure I'll start out defining the company, SWOT as you mentioned and markets I want to try and tap into-- then perhaps I can start to draw up numbers.
Two absolute musts:
∑Make sure that you are not undercapitalised Ė it will kill you Ė trust me Iíve been there, itís just not worth it. If the figures say it's not going to work, walk away from it or change things until it looks like it could work.
∑Get the best accountancy company you can find (chartered if poss.). They are free, i.e. they will save you far more money than you pay them! Most good companies will talk through things prior to you using their expertise and they will see financial flaws in your plan very quickly... ...so you cannot loose.
Get the best accountancy company you can find (chartered if poss.)
The smartes thing we did back in 1997 was to hire a top professional accountancy company. They have done wonders for us since the beginning of our relationship. They are of course chartered and among the leading in their field. They have helped us through all the turbulence over the past 2 years. Whitout them I think we would have been in big trouble. (Which we are not) :)
S - Social
T - Technological
E - Economical
P - Political
It's all about your "external business environment" and how well you know it and can *adapt* to it in future
Social - Changed in trends, fashion, consumer habits etc
Technological - What technology do you and your competitiors use and are capable of using (maybe in that SWOT analysis)
Economical - Is their a recession, what size of market are you operating in etc
Political - Does the local law prevent you from selling widgets in state X or mean you have to apply sales tax to state Y sort of thing......
You will probably find a better write up for STEP in a SE search :)
joined:July 3, 2002
Also, if you apply for funding in the UK from the Princes Trust, I think they have a business advisor to look over your plan.
I think it is the same if you apply for business loans from some banks too. You can also get free information packs from banks, most of which come with free software to help you construct a business plan.
I don't know how good it is, but at least you can find the basics to cover (although I think Fathom's post would give them a run for their money! ;))
At least you know if you apply for funding and it is accepted, then your plan is on the right track.
Most local communities (in the UK anyway) have business advice organisations set up, where you can go for free advice.
Im sure the Chambers of Commerce in cities/regions do it too.
They are partnered with the Small Business Administration and are a nation wide organization made up of retired business professionals that offer free business consultations to budding entrepreneurs.