One of the first steps you may take in your journey to becoming a successful entrepreneur is learning how to draft a business plan. You could think of a business plan as your blueprint – a roadmap that will lay the foundation for you to get your venture off the ground.
There are several reasons why writing a business plan should be top of your list before you take the plunge. For one, venture capitalists and small business financiers may require you to submit a business plan as part of your application for business funding.
However, even if applying for a business loan is not at the top of your agenda, drafting a business plan is a crucial step in getting to know your market and will help you understand if your service or product is addressing a gap in the market. The research you conduct to formulate the plan and the critical thinking that the process involves, will help you to evaluate the feasibility of your idea, look at what your competitors are doing, give you an idea of how much start-up capital you will need and which partnerships you can leverage to get ahead.
Here are four tips to help you kickstart the process of drafting your own business plan:
- Start with your ‘why’
If you haven’t already, do yourself a favour and look into Simon Sinek’s model of ‘starting with your why.’ According to Sinek, great leaders inspire action by communicating and drawing inspiration from their ‘why’ or their higher purpose for starting a brand or business.
Try and sum up your business’ purpose in a sentence or short statement and put it front and centre on your business plan. Then, reference it often as a way of checking that you’re on the right path and headed in the direction of something meaningful – whatever that may mean to you. This piece of information can become part of your executive summary or be used as the introduction to your business plan and objective.
- Gain an in-depth understanding of the problem you’re solving
At the heart of every successful entrepreneurial story is an airtight strategy for solving a problem. As an aspiring entrepreneur, you will have the best level of knowledge about the product you’re trying to take to market, but do you understand the problem you’re trying to solve?
This is where market research will serve you well. Use a combination of desktop research, surveys, studies, focus groups and social media listening to understand what it is that your target audience wants – no time spent on market research is ever a waste. The information you gather during this process will form part of the market and competitor analysis section of your business plan.
One of the best investments you can make as a first-time entrepreneur is getting to know your customer. Some marketers recommend segmenting your target audience into groups, characterised by different demographics like age, economic status, shopping behaviour and lifestyle preferences.
However, if you choose to learn more about the people you’re selling to, make sure you know all the ins and outs. Aspects like what their hobbies and interests are or their online browsing behaviour can give you important clues on how to market your business to them. The insights you gather for this component will become part of your business strategy.
- Explore different pricing strategies
It is exceptionally important for you to ensure that the pricing of your product or service is sufficient enough to generate a profit, but also competitive enough to attract customers. A great deal of competitor research needs to go into how you price your products. There are various strategies that you can employ to gain a competitive edge, some of which include value pricing, bundling, cost-plus pricing and price skimming. This may be a good time to enlist the services of a business development specialist to help you make the right decisions. In a traditional business plan, this information will form part of your sales strategy.