Since BrainHive joined Quora roughly 3 years ago, we have posted dozens of very popular answers and come to lead certain threads in our field, business planning and startup consulting. In 2019, we will take it a notch further. As part of our content strategy, we will publish our first batch of answers here on our blog and proceed to move them to Quora bit by bit in the coming weeks and months.
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Whether you’re looking to launch a new business or expand your existing products and services, determining the market size is a crucial aspect of evaluating a product’s potential for future success. Market size refers to the number of potential buyers of a product or service in a given area. Determining your market size is a key part of the research stage of product development.
Market Size: Your survival indicator
Estimating the market size will give you an insight of market trends and can signal you about the essential demand drivers, as market always move in one direction or another for any given time. What’s more, those drifts often indicate whether an alternative or upgrade version of your product is on the rise that could potentially cut down your market share or kick you out of market.
Remember Kodak, for instance. Before late 90s, almost every image shot in the U.S. was on a Kodak film. Kodak was almost synonymous to photography. Then digital cameras came in the horizon, and the number of digital cameras went from 4.5 million units in 2000 to 28.3 million units in 2007. Kodak neglected the digital trend and was complacent to its position in the market. It failed to realize at the right time that its market share is falling down. When it did realize, the train had already gone. There were already well-established competitors in the market. The brand ‘Kodak’ never made its way to the digital photography and now a discussion of business case studies.
A product is always planned and developed to solve some kind of problem faced by consumers/ buyers. The higher the number of the people facing the problem, the greater the chance is for the product to be successful and appreciated. So, based on the depth of the problem and the vastness of the people encountering the problem and willing to pay to solve it, the market size of a product is determined. For instance, Facebook’s market size is all the people using internet whereas LinkedIn’s market size is all the professional people using internet and showcase their work experience and portfolio.
Most of the products struggle to survive in the market because their developers fail to determine the market size at the initial stage. Failure to determine the market size for a product leads to wrong marketing strategies and thereby loss of market at the end.
Some ways to determine the market size:
Total potential market approach: This is an easy way to determine the market size for a product if you know who your target customers are and what your product’s average selling price (ASP) is. You must be intellectually honest about your product’s sweet spot and how much your customers will actually pay for it. Once these numbers are determined, the total market size can be estimated by simply multiplying the number of customers in the target market by the ASP.For example, there are 13 million businesses in North America but only 8% of them have over $1M in annual revenue. If your product sells for $50K your total potential market is not $650 billion because you’re probably not going to sell anything to 92% of companies which have annual revenues below $1M.
The total competitive sales approach: This technique of determining market size is applicable when your product or service is targeted to replace an existing one that has already established the sales numbers. This approach is based on “how much do people currently spend on the products that you intend to replace?”For instance, VOIP is a better way for consumers to make local and international phone calls. Thus, a credible way to size the market for VOIP would be to count up the revenues of landline phone competitors, discount it based on the savings that VOIP offers and then add this figure to the existing VOIP sales of Yahoo, Skype, Vonage, 8X8, etc.
Being realistic about your estimation is really the most important aspect of evaluating the market size. That means staying objective and impartial about not just your product or service, but also about consumer need and want. Otherwise, you could find yourself doing business in a market too small to stay afloat or too tough to survive in.
Determine the group of people facing the same problem: The starting point for determining the market size under this approach is defining the number of people facing the same kind of problem. The easiest way to understand the market size is analyzing the basic parameters such as age, gender, profession, location, time etc.
If the product you are planning to launch is already in the market, you can get the market size data from competitor analysis. If it’s a new, innovative one – you will need more elaborative and qualitative approach.
For example: the target market of a digital advertising firm is everyone who has a commercial website.
Determine the mass size that needs your solution immediately: When a product is launched, the number of people that will be ready to purchase your solution immediately should be the core of your marketing activities. The factors that filter the people facing the same problem into potential market base are the affordability, easiness, age etc. If you can answer the following questions, it will help you identify the market size that will embrace your product immediately
How many people are ready to switch among available solutions?
What benefits will your product provide to the target market?
Why do people will pay for your solution and why they would choose your product over competitors’?
For example: you can filter website owners who need digital marketing services among individual bloggers, small business owners, medium and large enterprises etc.
Determining the market size is really critical as it will answer some key questions to business success such as feasible growth goals, realistic market positioning, necessary funding and the likes. Without proper information about the market and its size, you will never be able to develop a sustainable growth and revenue model. So, don’t forget to put enough (or, should I say more than enough) time to do your market research before the launching the product.
It seems you have already done your homework with the business plan and looking forward to move on to the next step. Mark it please, the first and foremost thing you need along with the business plan is your commitment. You need to be 100% committed. You cannot leave anything to chance, everything should be planned. This means apart from the actual idea, plan and money, you need passion, time and energy. You have to put your body and soul into your business, you have to believe in its success and that will make the difference between success and failure.
“In the end, every startup is different. But in the beginning every startup is the same.”
― Richie Norton, Bestselling author of ‘The Power of Starting Something Stupid’ and ‘Résumés Are Dead’
Here are a few factors that I think can help you to run a successful business:
The reason why you are doing it
Business plan is important. However, no matter how good your business plan is, you are sure to encounter some pitfalls. Only with your drive, motivation and resilience, you will be able to overcome those pitfalls. So, make quite sure you are doing what you really want to do. It doesn’t help opening a greengrocer just for the sake of money if you hate vegetable,. or a restaurant if you don’t like talking to people. If you have a good idea, and feel passionate about that idea, immerse yourself into it. Just make sure you are doing it for YOU, and not for some lost reason.
Let’s say you want to have a restaurant, have a brilliant idea to implement but you don’t have any experience about how to operate this thing. Well, go and do some research. Ask a restaurateur that you know if you can hang out in their shop for a while. They can say ‘no’ if they want to. If you’re opening a Stationery shop, chat to other Stationers and ask them if you can work for free for a day. People are often a lot more helpful than we imagine. Try and get some experience before you set up your own shop. It’s helpful and you may get a better idea of what you are in for.
Interaction with people
Your plan is brilliant and you have the finances. Still, talk people before you set up your business plan and keep talking. Talk though the finances, the marketing, the staff and the salaries. Talk through every little bit, even if it seem irrelevant. If you’re setting up an online store, talk to other people who have already done it. Ask for advice and don’t be shy to take it. Listen to what others have to say. You don’t have to pay attention if you think they are wrong, but always listen.
Well defined goals
It may sound a little ‘old age’, but honestly, writing down your goals is always a good idea. Yes, it’s already in your head. Still, write down not just your business ideas and business plans, but also what you hope to achieve. Don’t let your dreams frighten you. Write them down and they may just become reality if you go after them on the right track of course…
Everyday task lists
Lists are just the most brilliant thing. Try to schedule every working hour of your day. If you need to get advice from someone, write it down. If you need to learn about social media marketing, add it to your daily list. You will get such pleasure when you cross it off your list. Daily lists are an excellent way to keep you focused and motivated, and they truly work!
If you just have the business plan, give yourself a date to go into action. For now you’re thinking of the idea but in six weeks, you will start the operation- something like that. Give yourself a date to have a meeting with the bank or an investor, have a date if you are going to crowdfund, have a date to chat to a possible partner or staff member. If you are creating a website, give yourself a date to start and finish. Deadlines are really good to work towards, they will make you feel good and will motivate you to keep going forward.
If your business plan is something you are passionate about, you should have focus anyway. If you find yourself losing focus, well, do all the above. Make lists, give yourself deadlines, remind yourself of the goals. It’s also okay to take a break, go for a walk or a jog, and then – get back to the task. Keep your passion, hold on to the good, deal with the bad and keep bringing yourself back to the work. If you have a good idea, you should be able to be focused anyway.
The Internet is the most fantastic place to get information. Read about people who have had successful business stories. Read about what inspires them and read about how they went about turning their business into a grand success. Keep reading, even when your business is successful and never stop. For example, Warren Buffett said, “I just sit in my office and read all day.” Buffet estimates that he spends 80% of his working day reading and thinking. You should do the same and you will find inspiration in the most wonderful of places.
Smart & Efficient staff
If your business requires staff, employ people you like. You don’t want somebody who is going to drive you mad every day, even if they’re excellent at what they do. Employ people who are excellent, enthusiastic, experienced – although perhaps you are the one to give them experience – and blend them as a team. Be part of your staff and talk to them. Establish open communication from the start. Establish good relationships from the beginning and yes, you are the boss, but ensure people feel free to talk to you, and to each other, openly and honestly.
Forget arrogance and attitude. You want people to buy from you and that is the bottom line. Be friendly. Be engaging. Make sure you offer something that is special and alluring and irresistible. Make the customer feel important from the beginning. Everyone is a potential customer so treat everyone the same way – all the time!
Visibility of effort
Stretch yourself. You are writing your plan, jotting down ideas, typing it out your plan, presenting it and doing everything properly. Add a few visuals. People like looking at graphs, diagrams, projections and pictures. It makes things look good. And if you don’t think you are artistic enough, ask a friend to help, or employ a professional. Now, go and write out your business plan. Strategize, summarize, include marketing and finances, throw in a pic or two, do it professionally and perfectly. You’re on your way to running an excellent and successful business. Keep it that way! Keep motivated, focused, write lists, write down your goals and keep dreaming big. Success is just a very good business idea and a very good business plan away.
If you are not sure how to get the customers, do your research. You can do surveys, look at sales trends, growth trends and area trends. Keep researching because that is one way your business will keep growing. Be creative with your research and think out the box. And remember, talk! The more you talk to people, a wide variety of people, the more enthusiastic and passionate you will feel, and the more you will learn.
Technology is fun. Keep your business alive by ensuring your website is top quality and also, perfect for mobile. You can design your own and it doesn’t have to cost much at all. Then, embrace every kind of technology – that will definitely keep you motivated and interested. Remember, it’s not just the millennial who shop online anymore. Everyone does. Use technology for everything and use it well. You can google, you can join online forums, you can really have fun with it. And you can turn your business into something top notch through the proper use of technology.
Apart from the business plan, these are the factors that can make or break your business success!
No business plan guarantees success. But writing a good business plan with a decent idea could certainly boost the odds. Hence, a business plan needs to be well written. It needs to be researched thoroughly and then presented well. If you are considering opening a tech-startup then you should know which business plans appeal to prospective investors, and which business plans annoy the hell out of people.
These are the things that I find most annoying while reviewing tech business plan:
Bad research or no research at all
I often see this, to-be-businessmen just forget to do their homework. If you want somebody to invest in your ‘Brilliant’ startup, you need to have done the homework. You need to know what the costs would be to get the business off the ground, the running costs of the business, and when you will start making a profit. You cannot just take figures out of a hat and hope that the investors will say yes. Good investors already know what it takes to make a business profitable. You need to be ahead of the investor and have all your facts and figures ready.
Another mood slayer. Take your time in putting your presentation together. Even if this is your first draft, do it properly. Type out your text well. Use proper spacing, excellent grammar and excellent punctuation. Do not leave out a single full-stop. Show your investor that you have spent time on your business plan. Show them that you are serious. Don’t make spelling mistakes. If you are putting forward a business plan for a tech startup, use the best technology you can.
I see many use poetry and prose to make their business plan look attractive. You don’t need to do that. Just provide solid information. Be clear and be quick. Avoid adding unnecessary adjectives. Tell your audience about your business plan, not your ‘beautifuuuul’ business plan. Take the fluff out and be professional from the start. Keep your plan simple but precise.
Many of the plans I went through were completely unrealistic. Remember, if the idea feels totally farfetched to you, it probably is farfetched. If you want to bring a whole new technology to something, make sure that technology is feasible. Don’t come with ideas that are so off whack that they cannot be done. This goes back to the first point – you have to have done your research properly.
No sustainable business model
Way too many plans fail to meet a basic need: the sustainable business model. It’s very common in professional businessman but not so common among people who wants to start tech startup. Most of them offer a one-time revenue model that incurs enough cost to eat up the revenue, leaving no profit. Or they just hit straight loss. For example, they want to offer a software service for $5 per month whereas the cost of maintaining and offering the service is $ 10/per month. Everyone seems to focus on the revenue coming in, not the cost to make sure those revenues!
Eye on technology, not problem
We are talking about tech business plans, so it might sound a bit odd. Still, this is quite true. Too often I have noticed that new tech entrepreneurs focus on “what” part of their business, how much advanced technology they are going to use, how it will work, what amazing facts are there about it – leaving out the prime concern- nobody cares about your technology unless it can solve their problem. Technology is just a tool to achieve your goals, problems you are going to solve. So, you should keep your eye on the problems, what people or your customer will like about it, not what you like about it.
Not knowing projections
People suck at projection. If you cannot project for the future, nobody will want to know anything. Clearly lay out your financial projection for this month, and next month and next year. If you can only talk about the ‘now’ without presenting anything for the future, your tech startup business plan is going to be rejected. And you are going to be considered a ‘time-waster’.
No profit and enough cash
Do not present a business idea to anyone if you are not going to generate enough cash and make a profit. I know people who present a great idea, say for an app, which costs USD 10 to join but costs USD 10 each customer acquisition. Zero profit. Now if the earing from customer is recurring, you’re good to go with the app. But if the revenue is just for one time, well… you should start a charity. Everyone wants to see profit at the end of the day. If you present a plan that is not profitable, consider the door already closed.
Not checking the patents
Make sure, before you even bring your business plan to paper, that you would be legally allowed to do it. There is no point in putting together a business plan that has already been done and patented by somebody else. This goes back to research too which, by now you have already realized, is the most important part of any business plan.
If you are presenting our business plan, do it properly. Make sure your power point is working. You do not want to be fussing around while the investor waits for you. If you are handing over papers, make sure they look good, are stapled together and look more than business like.
Research reveals that people get only seven seconds to make an impression before other. Utilize those seven seconds. Be quick. Don’t waste time. Get to the point and remember to talk about the content of your plan. No need to use superlatives. Of course your idea is ‘super’ but show the investor why it is super.
Don’t start talking in the billions. Make sure you have done all your financials properly and don’t start off too big. If you start telling your investor he is going to make the ‘deal of a lifetime’ he will probably zone out immediately. Investors have heard everything before so don’t come and give them spin. Also, don’t use all the cool hipster words that millennials seem to use. You are talking to a business person so use business terminology. Keep it real all the time.
This may sound silly but if you are asking somebody for money, the least you can do is be polite. Leave your arrogance at the door, no matter how brilliant your tech startup idea may be. Say good morning or good afternoon. Offer a solid handshake. Be amenable. Nothing annoys a potential investor more than a young scruffy badly dressed and rude person. Always be on time. And even if the investor is negative and says an immediate ‘no,’ thank him for his time. There will be another time. Keep all the doors open.
It’s not about ideas. It’s about making ideas happen.” —Scott Belsky, Behance co-founder
Good business ideas can come overnight or they can come slowly over a period of time. You may have been thinking about a business idea for a while and wondering how to put it into action, or you may wake up one morning, still bolt upright and think ‘I have the best idea in the world!’
Either way, you need to take some time to develop your idea. Take some time to think seriously about your idea, if it is really viable, if you would have the time and commitment to do it, and most importantly, what you would need to turn your great idea into something real.
There are no clear recipes for turning an idea into a successful business plan, but here are a few guidelines that can help you get going in the right direction.
Write everything down
Get a notebook and a pen and keep them with you at all times. Even next to your bed. As you start mulling over your plan, write down your ideas. Every time you think of something, write. It doesn’t matter if it starts off a little bit jumped and a little bit incoherent – it will start coming together. Remember, at this point you are not writing for the bank, or for a partner. You are writing for you. It’s called the ‘creative’ part of the thinking process. Let the ideas flow, on your head and on paper, and watch how your plan starts becoming a little bit better every day.
Settle on one business plan
You may have written down a whole lot of different ideas. Now, settle on the one that appeals to you the most, the one that interests you the most and that you are pretty sure you can make it work. Start narrowing down your notes and start writing, a little more concisely, on that one brilliant business idea. This is the idea that is going to turn into a plan. This is the idea that is going to be your business.
Do your research
Check the internet and have a look at other people who are running a similar type of business. Get some ideas, very ad-hoc, from the internet. Look at these similar businesses, the products that they sell, how they do their marketing and try and identify what makes them stand out in the crowd. Find something that will differentiate you from your possible competitors and give you competitive advantage.
Take your time
This seems trite but it is really important. Yes, your business idea is brilliant and don’t let anyone tell you that it isn’t. But don’t rush. Take a few days for writing things down, thinking up new things, making lists, adding to the list, crossing off the list, making notes. The more you scribble and write – and this is what really successful people do – the more you will find you think a little creatively, out of the box and have those real brain spark moments.
Chat to people
Don’t ever give away your idea but talk to people and get a little advice. Ask friends who are already in business about what it entails, how busy they are and how hard it has been. Remember, this is your business idea and you don’t want to share the details – yet – but you do want to get a little help and advice. Talk to people who have done similar projects but also to people who would be interested in your project. If you are thinking of selling something specific, chat to potential buyers. See how keen they would be and what drives them to buy one product over another. Test your idea on your target market.
Yes, you may have thought up one brilliant business idea but remember, be flexible with it. The more you think about it, the more you will add, take away or change. This is why it is so important to take your time. Your idea may be aimed at the younger market but the more you think about it, maybe it’s for the older market, or just for mothers or just for women or just for kids. There are lots of ‘or’ so be flexible, think it through, be open to change. This means if other people give you advice, always listen. You don’t have to follow up on their advice, but be open to it.
Write down your goals
Be that person who writes down their goals. What do you want to achieve once your business idea is turned into a proper business. Do you want to feed the hungry, have a small neighborhood shop, make a million dollars or lead an empire? The more you write down your goals, the more you realize them. Don’t be scared to close your eyes and dream of a future that is fantastic. Remember fortune only favors the brave.
Think about the marketing and promotion
Think of marketing and how you will get people to support you, to buy from you and to use your services. Will you use Social Media? Can you do this yourself or do you need to employ someone to do it for you. Will you create a brochure or a magazine, advertise on radio or on aeroplanes (see, you have to think of everything) and what can you do that will make your business stand out. Remember, it is all very well to have a great business idea but you have to turn it into something viable. Think of ways of marketing that will not cost you a big fortune and talk to people who currently do marketing. Remember, Social Media is the cheapest form of marketing and everyone uses Social Media. But – is it right for your business idea? Think deeply.
Turn your ideas into a professional plan
Finally, it is time to take out your laptop and convert your idea into a professional plan. You are going to be fairly detailed. This is the business plan that you may present to potential investors, a partner if you need or want one, and the bank. Your idea, strategy, finances and marketing are super important and you need to spend enough time on each section. Remember, don’t rush. Do this clearly.
The things you need to think about and type out are:-
A business name.
A fairly detailed business idea.
A financial plan
Marketing and advertising plans.
Get help from a professional or experienced person if you don’t have enough knowledge, especially regarding finances and marketing. If you present this idea to someone else, always have your contacts highly visible. They should be on the cover page, the back page, and anywhere else necessary in between. Ask somebody who is good at setting things out to help you with the set out, any graphics that you may need, and to make sure the plan is clear, concise, professional and appealing.
Don’t give up
Turning a good idea into a feasible business plan takes time. Don’t worry if you do not get immediate support or finance. It will happen. Be confident, be sure, work on anything that needs to be changed, and more than anything, do not give up. Go back and forth on your notes and turn your ideas into a successful business plan.
Do you have a ‘great’ idea for business? Well… the best way to find out (if your idea is great or not) is to conduct a research and write a business plan. When a good, well formatted business plan is in place, you will understand whether the idea is feasible or not.
I have walked away from many ideas after writing a business plan on them – because I realized that the ideas would have been turned into a dead hole for my time, money & effort.
So, business plan is very important and you need to take your time when writing a business plan, think it carefully and do thorough research.
There are a few steps that you should follow to start off with a business plan
Read as much as you can on your potential business and any ideas similar to yours.
Write down all your ideas.
The more you read and research, the more you can add to your ideas.
Chat to people who have done similar business plans.
Ask for advice.
Formalize your plan – take it from the paper on to the computer.
Check all your figures carefully.
Keep reading and researching.
Set yourself goals and deadlines.
Present your plan when you think you have nothing else to add to it
If you are going to be opening a business, ask yourself a few questions too.
Why am I opening the business.
Do I know enough to open the business or do I need help?
What are my ultimate goals with the business?
Who are the right people to ask for help and advice?
The Key to a Good Business Plan is Good Research
No matter what your business idea is, do an extensive research. Once you have done all your research, you can take your plan and turn it into a more formalized idea.
Whether you are writing your business plan for yourself or for an investor, keep it simple. Your business plan must look professional, even if you are not going to be presenting it to anyone. You must have a business name, all your contacts on the plan, and then step by step, sections on the idea, the location, the money needed, finances and projections, the marketing, the profits that can be made and at the very end, your goals. It’s a good idea to do an excellent plan because you never know when you are going to present it.
Don’t even think about starting a business based on your plan until you know you have looked at every single aspect of the plan. Some people go about doing a business plan in the same way they would go about undertaking a military incursion. It needs to be a foolproof plan otherwise there will be casualties. You do not want to be a casualty, right?
Ask for help or advice if necessary
One of the problems with people is they think they can do everything on their own. Actually, the best business people engage with others and ask other people for help and advice. You do not have to divulge your business plan, some things are best kept private. But before you present your business plan it is a very good idea to talk to like-minded people. Talk to your friends, talk to your family and talk to colleagues if you have any. Chat to business people, even if you have to take them out for a meal. Tell them you want to brainstorm and run a few ideas by them. Talking is always the best way to sort things through in your head, to see what ideas can work and what ideas won’t work. Never be shy or scared to say something.
Your business plan must be realistic
The best business plans are those that are clear, concise, well analysed and researched and have realistic projections. Do not present a business plan with half-baked figures or with no figures at all. Do not present a business plan that has unrealistic profits. Present a business plan that has been well thought out. Present a business plan that looks clean and clear. Present a business plan that focuses on the plan, the details, the money needed, the target market, the future projections and the how and the why of making the plan work.
Keep your business plan simple
You have looked, thought, researched. You have been thorough. Now it’s time to start typing it all out. You might have your own formula – a simple business plan – and you may be using an online business plan template. Whatever you prefer, here are a few things that you cannot leave out
A cover page with a business name, your name and all your contacts.
A summary of the business idea.
A detailed proposal of the business idea.
The funds needed with an itemized breakdown.
Projections, i.e. when and how you will start making a profit.
Target market Analysis. Marketing and advertising ideas.
Location analysis, if needed.
Have all the answers ready if they are not on your plan. Your investor will ask you:-
Why do you want to do this.
Do you have any experience?
Who is your target market?
How much money do you need?
When do you foresee making a profit.
When will you be ready to start.
What are the risks.
Remember, you can do your business plan on your own. Start off by jotting down notes and gradually work towards a more formal business plan. Or you can buy a business plan outline on the internet. Whatever you choose to do, personalize your business plan, keep it simple, keep it clear and keep it concise.
Top 10 Don’ts
The things that you must avoid while writing your business plan. Don’t
Be overconfident (on the high side) in estimating future sales.
Be too affirmative (on the low side) in estimating future costs.
Disregard or discount weaknesses in your plan. Spell them out.
Stress long-term projections. Better to focus on projections for your first year.
Depend entirely on the uniqueness of your business or the success of an invention.
Project yourself as someone you’re not. Be brutally realistic.
Be everything to everybody. Highly focused specialists usually do best.
Proceed without adequate financial and accounting know-how.
Base your business plan on a wonderful concept. Test it first.
Pursue a goal not substantiated by your business plan analysis.
Keep it simple. But fill it with the important detail. And remember you may have a great idea. But turning an idea into a viable business is a different ballgame. So, you need a solid business plan to roll on with your idea.
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
― Abraham Lincoln
The same saying can be applicable for writing business plans too. Business plan is the road map to navigate a business towards its goals. If somebody comes to you with a business idea and asks you to help them write out the business plan, you need to know what is involved and how much to charge for your time.
There are many online business plan programs that people can use directly. If somebody has a business idea that they want to turn into a business plan, they have three options:-
They can write out their own business plan.
They can choose an online business plan writing platform
They can hire someone like you – the business coach or business plan consultant.
If you want someone to hire you to write out their business plan, you need to know a few things.
You need to know what makes a good business plan.
You need to know how to set out a good business plan and proposal.
You need to be able to do some research on your client’s idea
You need to charge for your writing and effort that goes into a plan.
Let’s look at why somebody would hire you to write their business plan.
People suck at explaining things! They have many business ideas flowing in their head but they don’t know how to put it into paper or turn it into something to implement. You may specialize in writing out business plans and this is where you come in. Before moving with the job, you need to ask for following from the potential entrepreneur
A summary of their business idea.
Financial information – how much funding they need to get the business of the ground.
Capital needed and monthly expenditure.
Projected profits for the business.
Marketing ideas – how will they market their business.
You also need to check that they have done all their research and have analyzed all aspects of the business plan very carefully.
You need to know the goals of the client, so that together you can go after the same goals.
What can you bring to a business plan?
Talk to your client and ask them what their business ideas are. Assure them of total confidentiality. Listen well and listen carefully. If you think the business idea has potential, then tell them you are interested in helping them set out a business plan. If you think the business idea is terrible, it is better to be honest and tell them politely to go elsewhere.
But let’s say you think the business idea is a good one. You need to assure the client that you know how to turn business ideas into plans – think of the different sections – and then you need to talk to them about your costs.
The client needs to give you accurate figures on finances and projections. They also need to understand that the quality of the plan depends on him or her. You will make the plan look good, that is your job, but they will only get investment if they have given you accurate information. And of course, if an investor likes the business idea!
You are a business plan consultant or business plan writer. Think of yourself as a facilitator. You know what your client needs for a good plan to work. They need the idea research, strategy, analysis, financials, projections, marketing plans and more. You can advise them, but you cannot do it for them. You can guide them into what they need to do. Again, you are the guide and the consultant, not the success determiner or investment granter. They do need to understand this. You are not the person responsible for them getting investment. However, your writing can help them towards getting the investment, with a great business plan.
The client must also know they need to pay you for your service. Charge for your time, and for all the time you spend with the client. An hourly rate makes sense. Remember your time is valuable and you should charge from the very first consultation right through to the last consultation. Your hourly charges will depend on your experience and expertise.
If you consider it, you will probably need this amount of time when consulting on a business plan.
One hour for an initial meeting, to talk about the business plan.
One hour to get the information from the client – the idea, the finances, the projections.
Two hours for you to do some research into the plan and to check finances and marketing ideas.
Three hours to write up the first plan.
Half an hour for a second meeting
Two hours to modify the plan.
Half an hour for a meeting.
One hour for final modifications
One hour to brief the client on how to present the plan.
That is a total of twelve hours. Of course it depends on the complexity of the plan; you may take less time but you may take much more. It’s only when you know the client’s business idea that you can put it into a business plan. And it is only when the client has done his research and all his homework on the idea, that you can put the idea into a business plan format.
If the client asks for a fixed price contract, it’s better to avoid it. Writing a professional business plan requires a considerable time & expertise and there is always something to add up to a potential business plan. So, if you work on fixed price, you may not get the money worthwhile to your effort and it may turn out to be a never ending project. Your time is valuable and you should charge based on the time you invest, not some lump sum amount.
In conclusion, if you’re a good business plan consultant, charge for your time and the expertise you bring in to the table. The more complex the idea is, the more should you charge!
“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life and that is why I succeed.” –Michael Jordan
The same is true for business, you may fail several times, but you need to succeed just one time. That will make your life forever!
One of the most exciting things in life is starting a new business. Perhaps you have been thinking about a new business for a while and you have a whole lot of ideas mulling over in your head. You want to make it work and to make it work you need to have a plan; a business plan. You need to include strategy, specifics, tactics, targets, the finances and a solid marketing scheme in that plan. You also need to have the drive – the will to get the business started and the will to turn it into something successful.
Where do you begin with a business plan?
When you’re still in the early thinking process, which is the creative process, buy yourself a notebook. Start writing down your ideas as they come to you. Jot down as much as you can; you can tone it down at a later stage. Write down your business idea, your strategy, your target market, how you will manage your finances, exact specifics, ideas on advertising and marketing, budgeting and human resource. Don’t forget to write down your dreams too! Make short notes next to each idea regarding implementation. This process is called a mini business plan. Next, you should start elaborating on and developing your working business plan.
The business plan
You’ve started slowly with your mini plan. Now, you’re going to get serious and create a working business plan. You are going to move from mini to major. Each idea that you ‘doodled’ above is going to get your time and attention. You’ve thought about what you’re going to be doing, now you need to look seriously at the plan itself. Is it a credible plan? Can it make money? Do you have the time, means and ability to make your plan work? If you don’t, who can you contact to help you? Look at the partners you may need – for strategy, finance and marketing. Start getting contacts together. Then, elaborate the plan in detail. Create a document that summarizes exactly what your business is about, where you plan to go with it and how you plan to get there.
This is one of the most important parts of any business plan. If you don’t have the money to back up your business and to carry you through the beginning (which is the hardest time) you don’t exactly have a plan. Look at the finances you need to get started. Do your homework properly. You need to calculate the expenses you would incur for running your business for the first two years. If you can source the fund from your personal savings or connections, that’s great. If you can’t do that, you should look at the banks or investors for loans or investment. Again, do your research and calculate the amounts very carefully. You need to be very clear about what your costs will be and what your returns will be. If you think, numbers aren’t something that you’re good at, feel free to get help of a financial planner and do this professionally and perfectly.
To make a successful business, you need to sell the right product in the right market. There’s no point in having a restaurant in an area where people tend to eat home. There’s no point in having a Travel Agency in an area where nobody can afford to travel. Do surveys if this helps, or employ someone to do a survey for you. If you’re opening a beauty salon, check how many are already in the area. Check how many people would be interested, if you could run specials or incentives. Analyze your market from different perspective and make sure there is a need for the type of business you’re planning to do.
It’s all very well starting a business but you must get customers and you must get them quickly. Look at the various channels of advertising and see which ones suit your business plan. Almost everyone today uses digital marketing, making use of Facebook, Instagram and Twitter. Ask yourself, do you need print advertising too? What about Radio or TV advertising? Should someone hand out pamphlets on the side of the road?
Look at the costs, chat to people who can do this for you, find out exactly what is involved. No business sells itself. You need a solid promotional plan.
Once you have carefully pondered over all the various factors, start putting together a presentation based on your business plan. If you plan to source the capital from outside like banks or investors, this is what you are going to show them. This is the presentation that you will give to possible partners or investors. It needs to be fairly simple but it must be professional and it must have all the information in it. You do need to show it to other people in the business world before you take it to your bank or potential investors. Have it checked and then checked again. You won’t want to make mistakes because that you will make you look unprofessional.
A few points about a business plan or idea:-
Keep your ideas to yourself. Your plan might be so good and you do not want somebody else to steal it.
Take your time. You’ve thought of something brilliant but don’t rush into anything. Really go through the creative process of thinking it through properly and carefully.
Don’t be impulsive. You have a good business plan . Work through all your ideas slowly. You will be surprised how many more ideas may start coming, as long as you give yourself time to think.
Make sure you are going to be happy doing this kind of business. Chat to your family and friends. Ask them questions and let them ask you questions. Go over everything carefully.
You’ve done all of the above and you have made your final plan. It’s time to present it or implement it.
What your business plan needs:
A Title Page with the name of the business. This title page should have all your contacts on it, clearly and concisely.
A Summary of the Business. This is a brief overview of the business and why you want to do it.
Company Description. This is a more detailed description of your business and what exactly it will entail and how you will make a profit.
Products and Services. If there are specifics, list them and make them clear.
Marketing Plan. It is super important that you show how you will market your business. Include social media, special deals, pamphlet drop offs, or whatever innovative means you plan to deploy to achieve your marketing targets.
Financial Plan. This is another important part. You are being very clear about your needs, budget, expected returns and profits. Remember, get the help of a financial advisor if necessary. Do not think you can do it on your own unless you are fairly familiar with the finance and accounting world.
Operational Plan. This means detailing when you plan to start operating, how you will operate and who (human resource) it will take to operate the business.
Goals and targets. It’s a good idea to end your plan with your goals. Keep it in numbers and numbers orientated. Again, be clear, be confident, be sure!
If you do all your homework in advance, and look at all the angles mentioned above, you are going to write a professional business plan. Your bank or investors will be easily impressed with it. Oh another thing to remind you, don’t forget to put your contact details clearly at the front and the back if you want to show the plan to investors or bankers. This is pretty common but many people just miss it!
You take my life when you do take the means whereby I live.
— William Shakespeare
The world is wide-open for an unemployed person. You just need to be hard working and willing to go a little extra mile to touch the fortune.
First of all, forget about ‘cheap’. There is no business that could be done in ‘cheap’ if you really want to thrive in it. You need to think of an idea/product that could be sold in the market. If the plan is good, you will be able to arrange money easily. Unemployment doesn’t matter in this case.
Being unemployed, you may not have much or any money at all. And to start any business, even a small one, you do need to have funds. Don’t panic though, because there are always ways to turn your business plan into a reality, even on a shoe string budget.
Here are a few things for you to think about if you have a fabulous business idea but not so fabulous budget.
How to get money to make a your start up real:
If your plan is solid and you are likely to make a profit, even if it takes a while, you may well get a loan from the bank. You will have to present them with a solid business plan, and I will touch on this later. Once you have your business plan, approach not just one bank but many banks. Even if you have nothing, if your idea is good, a bank could be interested. And remember, it is not just banks that can give you a loan so you do need to explore all options. There are many private investors out there too.
Crowdfunding is becoming more and more acceptable and popular. There is no harm in trying to crowd source money to get your plan into a reality. Look at websites for crowdfunding – Go Fund Me comes to mind, but there are many – and choose the one that makes most sense for you. Get help with your wording so that it looks professional and is appealing to people who may want to give you money. Offer something to people in return for their money too. Promise to keep them updated, give them first offers, a special deal or something similar.
This is an old fashioned way of crowdfunding. Hold a raffle or a fete, do something where you can raise funds and put the money towards your business. You can do this as well as crowdfunding by the way, although you should try and target different people. You need to give the people who support you something back in return – prizes are always great and if you are smart, you will get them donated.
Before you have the money for your business, you need to have a plan.
I have spoken about loans, crowdfunding and fundraising. Remember though, before you get any money, you really must have a solid business plan. This does not need to cost you any money at all. It will cost you time, effort and some research, all of which you can do for free. Here are a few things for you to think about, when putting together a business plan.
Think, write down and brainstorm
You need to think about your start-up for a long time. Write down your ideas and if you can, brainstorm them with friends or fellow business people. You don’t have to tell them all the details – you don’t want anybody to steal your ideas – but you do need to brainstorm. Ask other people how they got started, find out what inspired them, find out who helped them, and get as many ideas as you can.
Strategize and summarize
Work out what you are going to do exactly, change your notes to something a lot more concrete, strategize all the details of your business plan and then – write out a small summary and a concise plan. You are going to present both to the bank, or to whoever you are asking for money.
Come up with a financial plan
You need to work out how much money you need. Nobody is going to give you an unlimited amount of money. Do excellent research and know exactly what your rent would be (or maybe it will be a website, in which case you only pay for the domain and hosting), what salaries you need to pay out, how much your products will cost. Your financial plan needs to include any capital expenses, profit you think you will make and how long it will take to make it, hidden costs, everything! Get help from a financial planner if deemed necessary. This is the one thing you want to do properly if you want to be taken seriously.
Are there any specific businesses that can be done on the cheap?
We are in the age of the Internet and you can do a whole lot of things for very little money. Having an online business does not cost much at all. You can create a website using any of the online CMS – WordPress, Wix, Blogspot – check them out because they all have a ‘free’ option. You can do blogging, drop shipping, online bookkeeping, testing or reviewing products/services, affiliating and many more for almost no money.
Once you choose what type of business you are going to start, you can create a Facebook page for no money and you can open a Twitter and Instagram account as well. Now, you have to make these platforms work for you. Be smart with what you put on your accounts, be consistent and work really hard at getting the right readers. If you are on Twitter or Instagram, follow like-minded businesses. In turn, they will follow you. Use clever hashtags. Most importantly, do your little punts at the same time every day. Read up about Social Media, you can honestly do your marketing for nothing, and there is so much information for you online.
Be smart about what you sell
Your business is going to be selling something. It may be a product such as clothing, it may be dating advice, it could be anything. Target the right market, and in advance, do market research. Make sure there is a market for your product. If you can sell your products as an affiliate site, you don’t need to pay for the products up front. You are on a limited budget so only engage with suppliers of products where you don’t have to lay out huge amounts of money. Or get that loan from the bank or fundraise / crowdfund.
Be smart about where you work
That thing of having an office? You don’t need to do that anymore, especially if you plan to do something on a small scale. Work from home, it doesn’t cost you anything. Plus you can work in your pajamas all day! Work from a coffee shop if you don’t have wi-fi at home. You only need to pay for a cup of coffee and maybe a breakfast. And try and find a coffee shop where you can also network. There are some amazing communal work spaces today that are really low in rentals and offer lots of fun and facilities.
Finally, when planning to start a business, you don’t have to think of the negatives like ‘cheap’ or ‘unemployed’. You should work on your start-up idea and identify the improvement scope continuously. Dedicate time and effort about your start-up, be passionate about it and watch the money flow in!
There are many things behind a good successful business. It is the business idea, the people who drive the idea, and most importantly, the planning that goes along with the whole operation. This is why for anyone starting out in the business world, it actually is vital to have a business plan.
What exactly a business plan is
A business plan is a guideline that depicts a new business, its products or services, how it will generate revenue, management and staffing, financing, operations model, and other details that are essential to both operation and success. So, a business plan is never overrated but can be exaggerated or overdone.
A good business plan should be simple. It will not be long, elaborate or complicated. It should well-thought of covering all the angles.
There are many aspects to a business plan. The first and foremost is the idea. All businesses need a feasible and profitable idea behind them. Then strategy appears in the scene. What does it take to execute the idea? Is the idea feasible? Once those questions are answered, a good business plan will look at finances. How much money is needed to get the business off the ground, how much is needed to keep the business running and profitable? And then, marketing needs to be thought through and cash flow addressed. Long term goals need to be identified.
What do I need the business plan for?
You need a business plan for yourself, so you are clear about what you are doing and what your goals are. You need a business plan for your partners so they are clear about what you are doing. And most importantly, you need a business plan for prospective investors. Nobody is going to invest in your business if you do not present them with a proper and well thought out business plan.
It’s a good idea to take your time in writing up a business plan. A lot of the plan is in the thinking and strategizing. This is why some people think they don’t need an actual written business plan, but – they do. A plan needs to be put on paper. It is the very thing that is going to get your endeavor off the ground. A business plan will summarize what your business is and what your goals are. It will say exactly what you need to do to successfully execute your plan. It will show figures and projections and hopefully profits. And that is what you’d like to see. Projected profits. You need to prepare a business plan for that.
What goes into the business plan?
Based on the idea, the business plan could be anything from quite simple to quite complex. So, before you type it out, write all your ideas. Make notes as you think about things you need to do or want to do. When you think you have covered (or almost covered) everything that will be required in the operation of your business, start typing out the plan. If you need some professional touch in the plan, contact people who are already experienced in helping with business plan. Still, here is a basic guideline of what should go into your plan.
Name of business: You name your business on page one.
Contact details: You put your contact details clearly and easily for anyone to see.
Summary: This is where you write a short paragraph on what your business idea is.
Goals: You write about your aims.
Tactics: How you plan to get your idea to fruition.
Finances: What you need to get your business off the ground.
Target Market: Who you are aiming the business at.
Competition: Analysis of businesses who are already providing similar services/products you are planning to offer. Why people should buy from you instead of them.
Marketing: Ideas you have for advertising and acquiring new customers and retaining the acquired ones.
Projected Profit: What and when you estimate you will start being profitable.
The point is, if you want to have a successful business, you have to have an impressive business plan. This does not mean you have to use fancy fonts and pictures or graphs. You do need to be clear about what you want, what your goals are and what it will take to achieve those goals.
There are different kinds of business plans
Your business idea might be really small. Perhaps you want to turn your own garden into a tea-garden for the public. It still needs a plan, albeit a fairly simple one. If you are planning on opening twenty restaurants, you need a plan and it needs to be totally comprehensive. Some businesses involve more finances than others. Some will market their business themselves and others will need huge marketing strategies. No matter the size of your business idea, you need to have a plan. And the more complicated the business idea is, the more research needs to go into your plan.
What is the most important part of the business plan?
This is an important question. Is any one part of a business plan more important than another? Well… the true answer is every part of business plan is as important as others. Business is a combination of finance, marketing, HR, sales, the profits and the goals. If you just ignore one, the whole system may fail. So, you should be clear about each and every point and thought through how you are going manage them.
Where should I start?
Remember to talk to people who are already doing similar kind of business. You don’t have to tell them your business idea, but rather ask for advice. Find out what worked for other people and what was the most difficult. People love telling their stories. Don’t ever feel ashamed about asking for help or advice, it is how you will be successful and bring your whole business plan together. Make lots of notes and write down your ideas, and only when you have written down things that are starting to make sense to you, start with your business plan.
If you are unsure how to write a business plan, follow the steps above. And if you cannot do that, or you want to do your plan really professionally, use an online business plan template. This is a good thing to do as you won’t leave out a single most important step to start a business.
Think. Strategize. Be smart. Create value and then get into business!
When we think of a business plan we tend to think of a plan for a ‘new’ business. But planning is needed for both new and established in all sorts of stages because ‘those who fail to plan, plan to fail!’. To be candid, there is no definite number of for the types of business plans. Based on the business type and the stage the business is operating at, there could be a number of plans involved.
For example, if you have a business but are looking to expand it, you need to have a business plan for the expansion. In the same way, if you have a business but are looking to go smaller for some unfortunate reason, you need to have a business plan for the downsizing. If you are changing your business operation, you need a plan for that change too.
Here are some of the various business plans that we see in practical use:
Start-up business plans
For your business to work, your finances should be very well planned and executed. Let’s say you got the funding that you needed. Keep referring to your financial plans. Be very clear about what you need money for, and make sure the right amounts go to the right areas. If you need more money, draw up a new financial plan. Get advice from the bank or from your accountant. If you need more staff, draw up a new financial plan. Their salaries have to go into your financial planning. If you are moving office, or buying new office furniture, plan it all. It is all about the way you plan that will make you successful.
An annual plan offers direction and structure for a business and its staffs. In an annual plan, a company’s goals and objectives and how they can be achieved are defined for a particular year. This annual plan works as a compass for the company and its employees in terms of target and progress. However, annual planning does not have to be an elaborate and time-intensive proposition that dies of its own weight. But it should pull on the combined knowledge of the company to identify the incremental changes required to drive future growth.
Whether you’re running a startup or a comparatively stable business, you always dream to expand your business. So, you need a plan for expansion. This plan should include a projection of the time, cost and resources required for the anticipated business expansion. You should formulate this expansion plan in reference to your financial projections. Otherwise, there might be inconsistencies in your overall planning
An operation plan provides highly detailed guideline for people to perform the day to day operation in the business. This entails the activities required to perform and the work responsibility to achieve the business or strategic goals. Operational Plan provides the what, who, when and how much:
what – the tasks and strategies that must be done
who – the persons who will be responsible for the tasks to be performed
when – the deadline by when the strategies/tasks should be completed
how much – the amount of financial or other physical resources needed to conduct each tasks or implement each strategy.
Your marketing plans may well change as you go along with your business. Your initial idea may have been to have pamphlets printed but now you are going the Social Media route. Write down your marketing plans, even when they change. This is also how you can see what works and what does not work. You can also see what costs money and what is effective. Constantly re-evaluate your marketing strategies and shift the goalposts if you need to. If one marketing strategy is not working, and you have given it enough time, then try another marketing strategy. And whatever you are doing or seeing should be reflected into your marketing plan.
What do business plans entail?
Most business plans are prepared with a view to starting a new business or getting funding for it. You put together a business plan with the hope that somebody is going to invest in your business. It is why you need to include your idea, your goal, your strategy, the finances needed, your profit projections, marketing ideas and ultimate goals. A well-thought out plan and a well-planned business goes hand in hand.
A business plan, once you have your funding and finances all sorted, is then also for you, the business person, to ensure good and professional execution of the plan. You will constantly refer to your business strategy, your marketing and your financials. You need a business plan to help you stay on track and to achieve your goals. There are different plans for different things and once you have done your initial business plan, and your business is off the ground, you will want to keep planning to ensure continuous success.
Goals are a large part of your business plan
When you started your business, you had big ideas. You strategized, discussed and looked at all the aspects of your idea. You got your business plan off the ground by laying out your needs and goals very clearly. Once you have your funding, don’t forget to refer to your business plan. Remind yourself what your goals are and keep going after those goals. If you have achieved them, well done. But remember, you can always shift the goal posts. Go after more things. Keep it real and never go into anything too quickly. Keep dreaming, keep a check on your goals and keep planning.
Size of different business plans
If your start up business idea or business expansion is simple, maybe your business plan will be set out on one A4 sheet of paper. If it is complicated, then you need a more complicated plan. Do it professionally, no matter what the business is. If it is an art gallery, you don’t need pictures all over your plan. All you need are clear, considerable ideas, figures and goals. The same goes for any business. Be clear. Be simple. Be concise. Be on the conservative side while projecting and leave the flowery details behind.
Well… there is no black and white answer to this question. It completely depends on you! If you think you can DO it without a plan, you are right. If you think you can’t do it without a plan, still you are right!
For example, in a latest session at SWSX conference, Elon Musk told that he’s not very fond of business plans. He typically plans on the big picture level and spare the nitty-gritty details for his colleagues or partners.
There are many highly successful entrepreneurs or businessmen who follow the same working style as Elon Musk does. They just think that if they can do it right (with or without a business plan), success will come. Definitely, they do plan for their business, but not just the way we think of doing it or conventional wisdom says us to do it.
These type of people consider building up a big business as more like improvising jazz (begin with an idea and run with it) than performing a symphony (broadcast a plan and stick to it). To these people, a detailed business plan is an onerous overhead.
What does it mean? You don’t need to create a business plan while starting your first or next business? The answer is ‘YES ‘, you do need to create your business plan. However, the conventional business plan may not be a good fit for a business anymore.
Elon Musk or other entrepreneurs like him don’t write business plans for their businesses because they have surpassed the necessity for writing the business plans. It’s not that they don’t believe in it. Here’s how it is:
At the initial stage of a business, a business plan carries out two significant roles – one is internal and other is external.
It offers guidelines and structure so that all the stakeholders can see the same picture and work together to accomplish measurable milestones and goals. (Internal role)
It is an instrument that makes prospective employees, investors and customers believe in the company that it will stand in the crowd and will be profitable. (External role)
People like Elon Mask or your father doesn’t need a business plan because they have enough credibility to intrigue the customers, investors or employees. Furthermore, they have already developed enough companies that they don’t need the guideline anymore to notify them whether a project is on the right track or not.
According to entrepreneur, Guy Kawasaki, author of numerous bestsellers including “The Art of the Start 2.0”, “The reality is that you don’t have to write a business plan anymore,” Why?
First, for a new business, 3 years is truly a long future and five years might be in another technological or geological era. So, it’s absurd to pretend that you have an idea and you or your company will work on that over the next five years considering current tools and resources which will change completely next five years
Next, nobody seems to have time and energy to read a ceremonial document, especially one that adopts the traditional template that ruins pages on irrelevant information like corporate mission, personal background, and chart-in-the-sky projections.
Instead of a formal business plan, today’s investors like to see a 10-slide, 20-minute presentation developed around a demo or prototype. “If a picture is worth 1,000 words, a prototype is worth 10,000 slides,” says Kawasaki.
Famous entrepreneur Henry Wong (founder of CNET, among many others) suggests a similarly minimalist attitude that covers five key points: 1) team, 2) technology, 3) market, 4) customers, and 5) special connections (people who can help you). This will fit in 10 to 20 slides and good enough to start your next business.
There’s a big secret here: mastering the art of establishing or running companies. When you start learning something (in this case; running companies) you must abide by the rules to succeed at it. The beauty is, once you’ve learned it fully, you are free to tear those rules. That being said, you’d reach to the highest level only by tearing those rules apart just like your father, Elon Musk, Henry Wong or others did about business plans.
If you’re a novice in the business arena, you do need a business plan. Because what is applicable for a MASTER isn’t applicable for a novice. Once you get mastery over running a business and gather more experience about it, the less useful and less important a business plan becomes for you.
Referring to the jazz vs. symphony analogy, the best jazz musicians – who is expert in improvising– typically possess years of experience of performing music that’s by the book. Once they know rule, they can break the rule. Same is applicable for you too; you need to know the rules to break the rules.
While the traditional business plan format is out of date, business plan is now more critical than ever for a business, thanks to the continually changing business environment and consumer behavior. Instead of 100 page text, you now need a 10 page slide with the bullet points that depicts the starting line, destination and the route to destination. Everything in between should be setup based on the real time data and operation.
In some cases, the traditional business plan has still value. For example, seeking investment or getting a loan. However, these are special situations and you will need many other things along with a detailed business plan to get a loan or investment.
About your father’s statement “business plan writers have made a business selling useless processes and nothing more” – he’s damn right here as well! The preachers of traditional business plan including the business plan writers (who do it for a reason) have destroyed the general notion about a business plan. Now, when the word ‘business plan’ hits people’s head, they think of a big file comprising tortuous text and complex figures and chats.
Luckily, the notion is changing because of increasing investor demands as well as talented founders who knows where to put their time. So, you don’t need a conventional business plan anymore to get your business flying in the sky. Also, you don’t need to devote countless hours updating and polishing it. You could use that time in something more meaningful: making your thoughts work in real world!
If you put your mind to it, you can write a good business plan in one day! Well… it’s not realistic to do though, because there will be lots of loopholes if you just do it in one day.
You do need to have done lots of research first, made tons of notes, looked at all your figures and then – start typing! If you haven’t already done your research, you need to get busy. Research for putting together a business plan cannot be done in one day! You need to take your time to brainstorm, validate, understand the costs and expenses, go over marketing ideas, think some more, check the available facts and figures – and then you can write your business plan.
The first thing to do is summarize your business idea
The moment a potentially good idea pops into your head, start making notes. Get a notebook and each time you think of something new, write it down. You can edit as much as you want and keep adding on ideas or elaborating them. Once you have your notes, start all over again and break it down into sections.
Key things you need to ponder over deeply
Look at each section carefully, and then, when you are clear and have done all the research – remember, you need to get your figures right if you want someone to take your business plan seriously – then you can start typing it out properly. Can you do this in a week? Probably. Should you do this in a week? Probably not, a week may not be enough time to think everything through very clearly.
Talk to other people who are in your targeted business area already
One of the most important parts of a plan is to validate it. You need to talk to other people who are already in similar business. Find out what worked for them and what didn’t work. You do not have to give away all your business ideas but ask people how they set it up, what their priorities were, who helped them and take any advice you can get. Remember, you don’t have to listen to all the advice but you do need to listen! An important part of a successful business is to listen. Listen well.
Who are your investors going to be?
Chances are that when you start your business, you are going to be looking for investors. This is one of prime reason to write a good business plan. This is why you should not write your plan just in a week, unless you have some really good idea and enough data to support it. You are directing your plan at your potential investors. So, it needs to look professional. It needs to be simple and clear cut. You must have a summary of your business idea, and then everything that you are going to need to get your business off the ground. Investors want to know how you are going to make your money back (their money back) and when you are going to make it back. Aim your plan at investors and be concise and clear.
Review your business plan
Your business must consist of the sections that come with running a business such as finance, marketing, hr, operation and the likes. This is something that you can review and update regularly and if it needs revision, then rewrite it. It is a good idea to always look at how you are doing things, and how you can improve things. You can improve on all aspects of your plan, by the way. Keep reviewing and revising. If we go back to the original question of ‘can you do a business plan in one week?’, well, yes, as long as you have been completely thorough in every single aspect.
Course of Actions
Like with life, if you can plan a proper course of action for your business, you will succeed. So, plan it carefully. Can you do it in a week? You probably shouldn’t. As we have said, a good plan takes time and thought. If you are getting advice and assistance, and in particular if you have done your research in advance, then yes. You can write your business plan in a week, or have it written up for you. But the research that goes into your plan should take a lot longer.
You have deadline to meet: one week. What you should do?
If time is really short, make a simple plan. It still needs to have all the information in it, but you can do it concisely. Your summary is going to be short anyway, no matter how long it takes you to do your business plan. And then, if time is of the essence, use bullet points. Leave all the flowery language out, which to be honest you should leave out anyway, and keep it easy to read, do point by point, and keep it all brief.
Short business plan or long business plan?
There are different schools of thought about it. In my opinion, it depends on the kind of business you are planning to open and how complicated it is by nature. If you have a really simple idea, keep your business plan simple. If it is long and involves a lot of staff, salaries, capital and extensive marketing, then the business plan should be really detailed and thorough.
If you want your investor to invest, do not present him or her with a plan that does not have all the details. You can still write out a business plan in a week, for a more complicated business, just keep it LEAN. Keep it to the point (this is for any business plan that you are doing quickly) and keep it thorough.
Impress with your business plan
Whenever possible, and without overdoing it, include visuals in your plan. Charts, graphs and images can help bring your business concept to life. Plus, it breaks up the text and helps a plan flow better. By all means, I don’t mean that your business plan needs to be typed out on beautiful paper and come in a colored folder and gift wrapped! That is window dressing. Your business plan does need to look good, be typed out well and presented professionally.
A business plan serves as a guide for people who are at the beginning of their entrepreneurial journey. If written accurately, it will provide the perfect guideline that you can use in achieving your business goals. Aside from this, you can also use a business plan to convince banks and other institutions to provide a grant or to invest in your endevour.
The Importance of Accuracy in Business Planning
Before learning how to write a business plan, you must first understand the meaning and importance of accuracy in business planning. Accuracy is important in providing information about the anticipated profit, marketing and sales forecast. These are the vital information that will make your business plan feasible and helpful. Therefore, it needs to be presented correctly.
Doing research is very important if you want to provide accurate information. You must start with the fact that you do not have concrete information about the future yet. Everything that you will be placing in your market and sales information are presumptions. With this, you need to study the current market to make sure that you will be able to create exact estimates.
Accuracy is not about getting the exact number or the exact figure now as you are still in the starting point of your business. It is all about creating estimate that is based on actual data. You are basing your marketing, sales and profit forecast from assumptions. With this, you need to be logical and open in researching. Look for sources that can provide helpful statistics for the specific industry where you will setup your business in.
Writing an Accurate Business Plan
Now that the meaning of accuracy has already been established, you can now start drafting your ideas that will make your business successful. Here is a simplified process in writing an accurate business plan:
Present your concept and the product or service you offer
What can you offer to the market and how will the consumers benefit from it? This is the first question that you need to answer in your business plan. You need to provide factual details about your offering and consumer benefits. This will help in building authority.
The next thing that you need to do is to give the specific information about your product or service. Remember that your success in business depends on how you can make people’s lives more convenient with what you offer. In this part of the business plan, accuracy means facts. You only have to give the real information about your business.
Describe your marketing strategy
Before you can even describe your marketing plan, you need to make sure that you did your research to know if people are willing to buy your product. In this part, you can ask a certain number of prospective customers to take part in your research. Let them give their comments about your product. Learn from this and determine the necessary adjustments
How can you effectively sell your product? Business success does not come instantly. It requires an effective strategy. If you are planning to apply for loan, you need to present a solid and concrete marketing plan. This is why you need to do a lot of research on this. Look for the best promotional techniques, the different ways to deliver faster than your competitors and how you can make your employees work faster. You should consider different options and determine what will work for your product/service.
Talk about your operational plan and the structure of your company
The only time that you can consider building an operational plan is after a strategic marketing plan has already been made. This is the part where you will be determining ways on how to measure your success and how to be able to reach the top. Your company objective and vision are the foundations of a powerful structure.
The organizational structure of your company is the key to achieve the goals that were set. What positions are needed to complete different tasks? You would not know how much fund you will need unless you know how the structure of your company works. You should also add an estimated growth forecast to establish accuracy.
Present the different activities that the company will be conducting to meet specific objectives. Describe the outcome that you want to achieve and present timetables and methods to maintain quality. Transparency is very important to maintain accuracy of information in this part of the business plan. You can use graphs and spreadsheets to create a good presentation.
Illustrate a Reasonable Financial Plan
Making sure of the profitability of your products and services will give your business plan an edge especially if you are joining a competition. If you are going to make a forecast of your profit, make sure that it is realistic. Most businessmen commit the mistake of putting very high profit. This happens when you don’t conduct enough research and don’t become conservative in your assumptions.
In determining the accurate sales, you should look at the different aspects including your expenses for the development, marketing and the administration. You should also look into the factors that may affect the cash flow because this will also have an effect on your business.
Tools to Help You Create a Business Plan
If the whole process of writing a business plan is a bit overwhelming for you, there are other options that you can consider. There are tools that can help you through the step-by-step procedure. But you need to remember that this does not guarantee an easier path. You will still need to consider the different tips provided in this article.
Answering the questions
Well… if you’re confident enough in your plan that it will work in real life and people will pay you for it, you shouldn’t worry about the questions coming from the investor. You just’ show them the money’ and they will give you the money! One thing to remind you here, investors invest not only on the idea/product, they also invest in people who bring that idea into life. So, you should also sound and look as convincing as your ideas that you’re going to present.
Writing an accurate business plan requires enough knowledge about the market, the products and the movement of sales in the industry. You need to take time to learn the different marketing strategies that will work for your business. Accuracy in business planning is only possible through extensive research. If you know your market and your business well, you will also be able to create a business plan that will work perfectly to secure a grant for you.
If you have a good business idea but don’t know where to start, business planning frameworks could be a big help. A business plan is much more than a document. It is a reflection of all the thinking that goes into how a business will achieve financial success and long term objectives.
Since many people seems to confuse strategy and business planning- the former being creative and unstructured and the latter being structured – it is vital to know the difference between strategy (concerned with what/which/why) and business planning (concerned with how/when). Here I’m going to talk about the business planning that (may or may not) covers strategy as well.
A business plan framework has a few set of sections. Meaning, everyone who is going to start business should think of each of these things, individually. Think of each section as a part of the frame. When they all come together, your frame will be complete.
The business idea
The strategy needed to get the idea off the ground.
The finance needed sustain the idea.
The expected profits.
We can break it down a little more.
The business idea
Well… this is your idea. You need to write down it. The more ideas you come up with, the more you need them to write down. Think through all aspects of your idea, if it really is feasible and how badly you want to do it. You need to be passionate when you start a business. Does your idea excite you? Yes? Then you are halfway there. Now, you need the right set of actions to reach your destination
Next, you need to think about what it will take to get your business running. Do you need to rent office space or are you working from home? Will you need staff or are you going to be a one man show? Do you need equipment and will you need to buy furniture and computers? Can you pay salaries? And how will you do the marketing? What will make you different to any other similar business? Think about every aspect deeply and strategize your activities to solve the questions. If required, study similar businesses and observe how they made it work. Point is, you will need to devote a section in your plan for strategy.
This is part of the overall strategy too but you need to emphasize on financial aspect elaborately, so make it separate. Conduct proper research on how much money you need to start your business, and how much money you require to keep your business going. Everything that you have planned about, needs to be paid for. If finances are not your strong point, get a financial planner to help you. Or an accountant, or an investor, or a colleague who is also or already in business. Think through all aspects of the finances. Write them down. And when you are ready, with all the information, write out a financial section.
As per the above ‘frame’ you are going to go over your finances very carefully. If finances scare you, as they scare most people, then get a professional to help you. It’s a good idea to spend money on the things that will result in your success. Go over every aspect of your business plan, and all the money that would be involved. You need to look at when you will start making a profit, because that is what a potential investor will want to know. When ready, write out the profit side of your plan. How much cash you will generate, what will be the profit percentage, how many units/quantity will be required to sell to reach the profit etc. Have all the information for a potential investor to read, clearly and easily.
A full business plan
A potential investor will want you to work within a business plan frame. Your business plan will include your business idea, finances, marketing and advertising strategy, expected profits and anything and everything to do with the business. You need to set your plan out clearly. Some investors may skip the ‘idea’ and go straight to your financial page. Your job is to make sure that every single page is clear, clean, informative and correct. Again, important thing to note – your work must be correct. You should do a summary of your plan that will show your strategy, show all your financial planning, your marketing ideas, and your goals.
What about the goals
When you first start making notes about your business plan, think about why you are doing it and what you hope to achieve. Don’t be afraid to verbalize your goals. Talk about them and write them down. It’s okay also to shift the goal posts if you need to – dream bigger or dream smaller. Keep reviewing your goals too. Perhaps you could do better? Perhaps you started off too big or too enthusiastic. Goals should be reviewed often, and analyzed often. And if you write them down, they really do have more chance of coming to fruition.
The framework must be solid
The analogy of a frame for business plan is a very good idea. Once you have put together the four components of your frame – summary of idea, strategy, financial plan, profit timeline – you want to ensure your frame does not collapse. To keep it strong you need to elaborate on all the four main frameworks. Certainly, you will need a summary. But at the end of your business plan, feel free to write a more detailed account of your business. Investors will be impressed. Make sure that each section of your plan, your frame is complete.
A good business idea does not have to be unique. If you have a unique idea, that is great. But you may want to open a corner cafe in your neighborhood. Or a stationery shop. Or a dog walking business. As long as you have done your homework, researched the business aspects of your idea, looked at the finances and put together a good and strong business plan, you can do it. Follow the framework described above, you will know whether your business plan is solid or not.
Keep in mind, a good part of business is being fluid, communicating and being open to ideas. Listen to people, get help, think carefully, go outside of the box and turn your business into a money machine!
No doubt you’ve already heard it: failing to plan is planning to fail. Most of the entrepreneurs start to pen a business plan only when they feel the need to secure start-up financing or loan. However, your plan is far more than a document for banks and investors to read; it’s an invaluable roadmap for launching and growing your business.
The whole idea behind a business plan is to be able to get your business idea off the ground. You need to have a detailed plan so that you understand every single aspect of the business and can run it properly and profitably. A business plan can be for you, your partners and / or your investors or even for your employees.
What is the first step in a business plan?
A business plan is a written, formal statement of your business idea. Let’s say you have a fantastic business idea. You should buy a notebook and keep your notebook with you at all times. Write down your idea(s) as it flourishes in your head, write them down. Set out different sections in your notebook. Have a section for your idea, a section for your goals, a section for your strategy, one for your finances and one for marketing. If you finish the notebook, buy another one. Keep writing. Only when you feel confident about your business idea to work and implementable in real life, you should move on to the business planning.
You have a fine idea and you need to grow it, break it, fix it and modify it through research. You need to do proper research to find out if your plan is feasible. Talk to other people who have started their own business and ask them how they went about it. Ask for advice. Listen carefully to what people tell you. And research all the things that have to do with your plan. Research possible costs, marketing, strategy and potential profits.
Remember your goals
Here comes the famous quote “a goal without a plan is just a wish”. You are going into business certainly to make money. You need a business plan to help get your business going. The objectives of your business plan should be exact, achievable, realistic, smart, manageable and measurable.
Being ‘measurable’ is a very important part of the business objective. Basically, with a plan, you are highlighting what you need to make the plan work and what you will do to make the plan profitable. To reach the objectives of your business plan, you need to include:
Summary of the idea
Financial planning, i.e. what you need to get the plan off the ground
Projected profit, i.e. how long will it take for the business to start making money.
Long term Goals
A business plan needs to include your entire strategy, from the idea until the very end, the profit.
Objectives of a business plan
As per a report of the Small Business Administration, 70% of the new businesses fail in their very first two years. This failure rate makes it worthwhile for every entrepreneur to make a business plan that describes the business potential, flaws and all… By providing the facts and figures to evaluate the feasibility of a business, the plan serves as a baseline to evaluate business performance.
Guidelines for the stakeholders
One of the key objectives of business plan is to work as a guideline for stakeholders. Management can use a business plan to gain consensus on a business’s description; the market in which it will operate and its strategy to achieve different business goals.
Without the business plan in place, management may lack an effective baseline to test various theories on how to drive the business and observe the outcome from a marketing, financial and operations perspective.
Yardstick for Performance
Planning and Monitoring are critical to long-term survival of any business. As a startup starts its operation in the market, the different portion of the business plan serves as a yardstick to compare actual with planned operating results. In calculating the success of operations, an entrepreneur can detect issues easily such as delivery delays or increasing costs of production. Once detected, you can take necessary steps to fix the issues.
Everything will fall into pieces the way you’ve planned it – this never happens in business. So, a business plan works as a reference document to assess the strategies and define how the concern should move forward. Failed aspects of the strategy can be discarded or replaced based on your weaknesses or strengths. For example, you think to use social media to promote your products. You try it and see that your target market is elderly people who’re not very much accustomed to social media. So, you need to replace your social media effort with print or tele-promotion.
Securing Finance or Loan
A business plan works as an instrument to secure startup financing. Banks and other loan providers or investors evaluate this plan to conduct due diligence before offering a business their money. The plan enables the potential investors or lenders to understand the founders’ vision of the business, the company’s goals and techniques of operation, each of which deduces the comparative financial worth of the business.
Your business plan can be done simply but it must be done properly. Take enough time to formulate your business plan. If you can prepare this document thoroughly covering all the aspects associated with founding or running a business, you’ll be halfway to your success. Business plan and its objectives help you measure, control and manage the business. Without them you have no way of knowing if your business is heading on the road to success or not.
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