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By Jay Maharjan
Starting a business is a major commitment that will consume 24/7 of your life with no end in sight. It is always good to know what you are getting into before you take the plunge. From my experience writing business plans for large and small companies alike for the last 8 years, there are basically two reasons why you need a business plan – the first reason is to re-assure yourself that this wild dream that you have in your mind is actually attainable. And, the second reason is to convince a lender or a venture capitalist. More than likely, you are writing for the second reason. Whatever your reason may be, as the legendary management guru Peter Drucker would bluntly put – always ask yourself what your business is, who your customers are, and what the customer considers value.
In my opinion, here is a list of pointers that will save you headaches later.
a. Be clear about what you are selling.
Spend as much time as you need to define and clarify what you are selling. From the gettgo, come up with a 15 second elevator pitch. This will come handy later on. If you need professional help to come up with a pitch, companies like – 15secondpitch can help. This is a great resource to help you discover who you are, what your company does, and what others perceive of you and your verbal and written messages.
b. Come up with Mission, Vision, and Objective statements for your venture.
Mission, Vision, and Objectives – They may all look the same at first glance, but they reflect different rationale.
The mission statement represents the underlying operating philosophy and the values of the company – ‘The mission at Company ABC is to provide a reliable, yet affordable XYZ technology for residential customers.’
The Vision statement represents a long term plan – that provides a direction to make significant impact – ‘Our vision at company ABC is to become a global niche leader in XYZ technology by the year 2009.’
The Objective represents definitive goals for different purposes within the company. Peter Drucker first popularized the term “management by objective” in his 1954 book ‘The Practice of Management’. Objectives can be set in all domains (services, sales, R&D, human resources, finance) – ‘The main objective of company ABC is to understand the target market, to implement the most optimized form of logistics, to include a series of efficient fulfillment processes and to provide an unmatched form of customer service.’
c. Be honest with your Strengths and Weaknesses.
You can conduct a simple SWOT analysis on your venture. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Create four quadrants and fill up with honest lists of answers. This simple test allows you to assess your compatibility with the venture that you are getting into. This test will also indicate opportunities, threats and barriers to entry that exist in your vertical market.
d. Conduct a thorough research on your vertical market.
Leverage on new Internet research tools to conduct comprehensive studies. At every stage of your research, be open to adopt new directions based on your findings.
e. Make sure there is a real opportunity.
or move on to a different venture.
f. Make sure your product or service addresses pain point (s).
This goes back to the point (a). Understand and address your customer needs.
g. Conduct a thorough research on your competitors.
Create a matrix and conduct a thorough competitive analysis. See what your competitors are offering.
h. Make sure your product or service addresses pain point (s) better than your competitors.
Its all right if your competitors got in the market before you did. But, focus on doing things little bit differently that you address the customer needs, pain points better than them.
i. Be realistic with the revenue projections.
Don’t fall for cliches like – ‘According to Forrestor’s research, our market will be $ X billion by ___’, ‘We will drop our product in China and we will make billions.’ There is nothing wrong with wanting to become another Google or Microsoft, but make sure you have unique product or services. If you have a patent on your innovation, that helps. If you already have an angel investor on board, that gives you credibility. If you have a veteran management team in place, thats going to help you a lot! Always be ready to explain to lenders and Venture Capitalists how you are going to reach the big numbers – and never ever use cliched answers.
j. Surround yourself with people smarter than you. Do not be afraid to ask for help.
Always reach out to people smarter than you. Big ideas take right people to bring them to life. You want to do things smartly and not give your idea away, but at the same time you need to be open to sharing with right people. One rule of thumb is – it is better to team up with people with complimenting skill sets. If you are an engineer, you don’t need another engineer to support your point of view. You need a professional sales partner to sell your product, and a sharp finance guy to keep the numbers in order.
k.. Seize the opportunity to scale up – quick.
Big deals don’t happen on their own. Big deals happen because of right people, right product, right momentum in the market among many possible variations. If you have everything in order and luck is in your favor, seize the opportunity to scale up – and do it quick! Otherwise, good entrepreneurs know when to pack up their bags and move on to another opportunity. I advise entrepreneurs to get out of business if the venture doesn’t take off within two years.
More to follow on this topic.
If you need help with business planning, please contact Jay Maharjan & Associates @ 877 466 2360 ext 1
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Tags: business plan basics, business plan keys, business plan secrets, keys to a good business, secrets of a great business plan, what is a business plan, why bother a business plan, why spend time to write a business plan
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That was a well thought out and well written article. There are some jewels there for those of us not about to embark on starting a new business. thanks for sharing!
Best Wishes,
D4L
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Thanks for all the posts
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Your blog have refreshed my mind. With this good refreshment thoughts, I hope, I would be able to manage my business more effectively.
Thank you very much for post.
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I totally agree. I go into a lot of this in my site as well! Great job.
One of the biggest killers of success for entrepreneurs is when they go out and they pick up one project, and two projects, and three projects, and four projects.
Jay, I really like your article, it can save me alot of time and money when I open my Check Cashing business, you will be my coach, thanks your friend Juan Cortes.
Great article. I enjoy hearing about entrepreneurs who triumph potentially devastating situations and rise from it with a leaner, more efficient business and go on to achieve everything they desire.
Regards/-
Jason Webb
Great Post!!!!! thanks for sharing