So you want to start a business, but do you know how to plan a business?
Do you know the first steps to starting a business or how to implement your goals and desire to bring them to reality?
Starting a business without a plan is like embarking on an unknown journey without a map.
You could easily get lost.
Planning is important to help you bring your concept to life and give you directions on how to about it.
Overall it’s one of the essential stages of starting a business.
So, before we discuss how to plan a business, let’s explore the different stages of starting a business.
Stages Of Starting A Business; The 7 Stages Of A Start-Up
These are the stages every start-up business owner needs to pass through to establish a full-blown business that will stand the test of time.
Ideation And Research
Every business starts with an idea.
There are different ways to come up with a business idea if you don’t have any already.
However, having an idea isn’t enough to start a successful business.
You need to be sure that your idea is worth taking into the marketplace.
One way to do this is through research.
When researching the marketplace, you should aim to find out;
- If your idea solves a problem in the marketplace ( that is, do people need the product/service you’re bringing into the marketplace).
- Also, how much are people willing to pay in exchange for your product/service.
- If your business idea is unique or there’s someone already offering the same service in the marketplace.
Overall, at this stage, your primary goal is to find out what you want to do and if it’s worth investing your time, energy, and money.
Goals Setting And Planning; How To Plan A Business
Once you’re certain about what you want to do as a business and its feasibility, it’s time to move on to the next stage.
Here you need to define your purpose for starting a business and how you intend to achieve that purpose.
Many people start a business for several reasons, such as;
- For monetary prospects/financial stability.
- Also, to pursue a passion.
- For freedom/flexibility from strict working hours.
- For humanitarian service/to impact their society positively, among others.
Your purpose for starting a business will determine your business activities.
To identify your goals or purpose of starting a business, ask yourself a lot of why and what questions.
Also, identify your strongest motivation for starting a business.
After you’re clear on your goals, it’s time to visualize how to achieve them.
This is a focal point of this discussion; how to plan a business.
A business plan is an important business document.
This is because it captures your objectives, details of your product/services, and how you intend to achieve your goals within a specific timeframe.
Ideally, a business plan is a navigational map that guides you to your desired destination in business.
Later on in this post, we’ll discuss what to include in your business plan when creating one.
Financing And Implementation
This stage involves ensuring you have adequate financial resources to actualize your goals.
So, you’ll need to look into your personal savings.
If you don’t have enough personal savings, you may need to resort to external funding.
Overall, you can begin building your business when you have adequate finances.
You can start by getting a good location, hiring the right team, starting the production of goods/services, and kicking off business operations one step at a time.
The next stage of starting a business is to ensure that your business gains attention from the right people, your target customers.
This is a crucial part of the business process because it’s the only way to make sales in the business.
Yet many businesses struggle with making it past this stage, contributing to one of the reasons why many businesses fail.
So, you need to put in the effort to see that you get it right at this stage.
There are several ways to promote your new business and get it the attention it deserves, such as word of mouth marketing, paid ads, SEO, etc.
Whatever medium you choose to use;
- It should be to break into the market.
- Also, aim to attract customers.
- It should be to build a reputation.
- Furthermore, aim to retain your customers.
- More importantly, aim to build customer loyalty/a strong relationship with your customers.
Overall, whether you’ll make it past the first few years in business will be determined by how well you achieve the goals highlighted above.
Assessment, Evaluation, And Refinement
There’s nothing like a perfect business idea or plan.
You attain perfection by evaluating your performance and improving on your shortcomings.
So, this is the stage where you measure your business performance so far and make adjustments where necessary.
You’ll need to assess and evaluate your business by looking out for;
- Customer satisfaction
- Customer complaints
- Product performance
- Customer experience with your products/services
- The efficiency of business processes
- Progress/Growth rate, among other things.
Gather as much feedback as you can in the above-mentioned area.
Then, analyze the feedback to identify the areas you need to optimize further and those you need to do away with.
Above all, do a holistic and honest review of your efforts in the business so far.
Expansion Or Scaling
This stage is where you expand your business operations.
- It could be by hiring more staff.
- You can expand the business by creating a new range of products/services.
- Alternatively, it could be by expanding your outlets/office to other locations or regions.
- Finally, it could be more efforts to grow your customer base.
Identify the different ways you can grow your business and implement them.
To make things much easier for you, your implementation plan for this stage should be included in your business plan from the onset.
This way, you can simply refer to your business plan and implement your growth strategies.
At this stage, you must have scaled through the first rough years of business.
Now, your start-up has been fully established in the marketplace, and you’re recording substantial growth.
So, it’s time to focus on establishing credibility and making your customers loyal to your brand.
You’ll need to come up with creative marketing strategies and tactics to break existing market barriers.
Overall, don’t forget to review and refine your business processes for optimal performance continually.
Now it’s time to go into more detail on the planning phase of starting a business
Business Planning Tips; How To Plan A Business
1. Gain Clarity On Your Business Goals
Again, this takes the top priority in the business process.
It’s all about gaining clarity on your desired outcome in business.
- What specific things do you want to achieve in the first few years in business?
- How much money do you expect to make in the business after a few years?
- How big do you want your customer base to be?
- What’s your future plan for the business?
The clearer your goals are, the easier it is to determine the exact steps you need to take to achieve them.
Hence, scrutinize your business objectives to clearly understand what you want to achieve and how to achieve them.
2. Research Your Market
The next step to making a business plan is to research the market.
Researching the market is necessary to help you identify your ideal customers and your competitors.
Firstly, in-depth market research will reveal;
- The market segment that needs your products/services the most.
- Your target customer’s pain points and the emotions that trigger them to buy.
- Trends in your industry
- What products are already available to your target customers.
Similarly, market research also reveals who your competitors are and what they’re already offering to the market.
In all, these will give you enough market and competition insight to make an effective business plan.
3. Analyze Your Product/Service & Identify Your USP
As you may have already found out at this point, you’re not the only one with your business idea.
Chances are, someone is already doing what you intend to do, or someone will model their business after yours.
This is why having a unique selling proposition (USP) is crucial for success.
Your USP is the unique factor or mechanism that delivers value to your customers.
It’s what sets you apart from other businesses within your industry.
First, to identify your USP, highlight your products/service features and benefits.
Afterward, think of the different things your products/services does that your competitors don’t do.
Furthermore, look for the features/benefit that will deliver the most value to your customers.
After combining all the above, look for a simple and direct word, phrase, or sentence that will summarize everything you’ve highlighted.
Whatever you come up with is your USP.
Note that your USP should be more about your customers and not you or your business.
Overall, it should highlight the unique and specific benefits customers will get from your business.
4. Check Your Finances
There’s not much you can do in business without money.
This is why you need to verify your financial strength before taking any further steps.
Regarding financing in business, there are two options available to you; personal savings or external funding.
Each has its pros and cons.
Firstly, using your personal savings will allow you to enjoy full control of your business and help you avoid debts.
However, it could make you operate your business on a very thin budget and make it difficult to cater to other personal needs.
On the other hand, external funding will give you access to enough resources to operate your business optimally.
However, it may come at certain costs, such as; sharing control of your business with partners, paying high interest on loans, etc.
There are several sources of external funding for your business, such as;
- a loan from friends and family
- Private investors partnerships
- Loans from commercial banks.
- Business grants from the government, etc.
Note that, whichever sources of external funding you decide to go with, you’ll need your business plan to prove that you have a feasible business idea worth investing in.
More importantly, choose a financing option that’s beneficial and offers flexible payment terms.
5. Gain Sufficient Information On Effective Strategies In Your Industry
This is also another important step to take when making a business plan.
Now it’s time to strategize and set up sustainable frameworks for your business operations.
This process involves taking an in-depth look into your industry to analyze what works and what doesn’t.
You could start by researching your competitors, paying specific attention to their business activities.
Look into their success or growth rate, marketing campaigns, work culture, work regulations, etc.
Your focus here should be to identify specific strategies or tactics that have yielded positive results for other similar businesses in your niche.
Also, find out the rules and regulations that apply to your industry.
Whatever information you discover in your analysis will help you develop your own strategies for success.
6. Write Your Business Plan
Now it’s time to start filling in all the information you’ve gathered above into your business plan.
A comprehensive business plan will have specific sections where each piece of information will best fit into.
We’ll discuss the different sections of a business plan in a separate section.
You can use several free resources/business plan templates to guide you on how to structure your business plan.
In all, make sure to represent information accurately and clearly.
7. Proofread Your Business Plan And Finalize
The final step to making a business plan is to proofread and check for errors.
Check to see that there are no discrepancies in the numbers or misrepresentation of information.
When everything seems okay, it’s time to move on to the next step.
The next step could be pitching to investors or loan officers if you’re seeking external funding.
On the other hand, it could be implementing and kicking off with business operations if you’re self-financing your business.
Now that’s how you plan a business.
To give you a proper view of what your business plan should look like, let’s explore the components of a business plan.
Essential Components Of A Business Plan; What Should Your Business Plan Look Like
This is exactly what it says; a summary or an overview of the entire business process.
Think of the executive summary as an elevator pitch that should tell people all they need to know about the business in as little as 10 minutes.
It is the first and most important section of every business plan.
Furthermore, it’s like a tease section that encourages the investors or other contributors to read other sections of your business plan.
Therefore, you need to get it right.
A good executive summary should include;
- The business opportunity/problem you intend to solve
- The target market
- Your objectives
- Your USP/business model
- The market/competition analysis
- Management/HR team
- The source of funding
- Financial projections
Above all, you should summarize the above information in the executive summary section in a few sentences.
This section describes what the business or company is about, what it does, and how it’s different from other businesses.
It’s essential to provide sufficient insight into the business identity, size, location, processes, objectives, and expectations.
To summarize, the business/company description should prove why your company is best suited to execute the business idea.
This section of a business plan provides insight into target market size, the market segment you’re targeting, customer behavior, and loopholes in the marketplace.
It should also highlight how you intend to break into the marketplace with your new product and position yourself before your target market.
It should specify your target market and how you expect to gain their attention.
To put it simply, it should capture the specific ways you intend to promote and sell your products/services.
This is the part of the business plan where you include all relevant information on your competitors.
It’s also the part where you break down your USP and how it sets you apart from the competition.
This section should highlight who your competitors are and how you compare against them.
It should also highlight their strengths and weaknesses against yours.
This section should also provide insight into how much of the market share your competitors have and if you stand a chance against them.
Human Resource/Management Analysis
Having a great team is crucial to every business’s success.
These are people whole be responsible for bringing your expectations to life.
So, this is such a crucial part of the business planning process.
This part should clearly state who the executive team members will be and their responsibilities.
It should also highlight what skills and expertise they bring to the business.
Finally, it should specify what organizational structure you’ve decided to use, the hiring process, skills/requirements for hired employees, payment structure, etc.
This section provides more details about your products and services, what it does, and how they’ll enter the marketplace.
It should describe how you intend to produce and package your products/services.
Finally, the product and service description should also highlight the cost of production.
Financing And Revenue Projections
This is your chance to talk about how you intend to finance your business operations.
Are you using your personal savings, or you’re requesting external funding?
Furthermore, if and when you get the funding, how do you intend to use it to generate revenue for your business?
This is the part most investors would be particularly interested in because it will give them insight into the feasibility of the business and how much profit they can expect.
Overall, this part should provide details on the projected cash inflow/outflow, sales projections, expenditure budget, financial statements, assets, and liabilities.
In addition to the above, it’s also a smart move to include your growth/expansion strategies in your business plan from the onset.
This way, when it’s time to scale your business, you wouldn’t have a hard time figuring out what to do.
So, this section of your business plan should highlight the processes, systems, and resources that will be required to take the business to the next level.
Not every business owner likes to hear this.
However, savvy business owners prepare themselves for the worst-case scenarios in business.
This is because unforeseen circumstances happen all the time in business.
So, it’s best to include contingency /crisis management strategies in your business plan.
Above all, this will make it easy to identify the next step forward and quickly bounce back from the setback.
Conclusion; How To Plan A Business
That’s it on how to plan a business.
Putting all of this information together, you’re set to create an effective business plan that will set you up for success.
Best of luck in your business endeavors!.