p Great Business Plans

Wednesday, August 22, 2012

Business Planning for Start-Ups

Some entrepreneurs believe in detailed planning, others like to fly by the seat of their pants. The survival record for business start-ups at about 51% suggest that some planning is essential; there are no records to reflect the number of really good projects that have been still-born through over analysis.

The trick, as always, is to achieve a balance.

My own experience is that the process of thinking out my business plans has been every much as educational as the plan itself. In my pragmatic way the thinking process has resulted in an organised 'to-do' list rather than a detailed written plan.

The Business Planning process has been reduced to an aide-memoir which has always done for me in the past. It doesn't work for everyone, but it does for me.

The classic business plan structure would suggest a hierarchy:
  • Table of Contents.
  • Executive Summary
  • Company Description
  • Products and Services
  • Marketing and Sales Plan
  • Management and Organisation
  • Personal Financial Statement
  • Start-up Expenses and Capitalisation
  • Financial Plan
But it time and resources are limited we probably need to mount a triage operation on this list separating out:
  • What we 'need to know' to get started at all?
  • What follows from our 'need to knows' and has to be resolved before we launch?
  • What is 'nice to know'?
'Products and Service' and 'Marketing and Sales Plans' are definite 'need to knows'. Everything else in the plan will follow from that.

Products and Services
It's fine to start a business on the basis of 'this is what I can do' or 'this is what I'm interested' but what you like, though important, is secondary to 'what will your clients need and like' and even more important 'What will they pay me for". It is a stark fact that by going into business yourself you get rid of one boss and get dozens - your clients!

Marketing Plan
Your marketing plan requires that you think through:
  • Your Pricing Where do you stand in the market: cheap and cheerful - mid-market - top of the range? It will make a vast difference to how you set up.
  • Place Are you on the high street, on a trading estate or on the internet.
  • Promotion How will people find you?
  • People Who will you need to sell your services?
  • Processes How will you deliver your products?
  • Physical Evidence Have you tested your assumptions?