But first, we plan!
Picture this: You decide it is finally time to pursue that business dream resting on your back burner. You dust off your idea and begin to brainstorm how to get serious about turning this dream into the money-making reality you know that it is. Where do you even start? Some of today’s biggest entrepreneurs will share that writing a business plan is an important early step towards cruising down the highway of success.
Not surprisingly, there is data to back-up their claims. In fact, research suggests that business owners who write a business plan are likely to experience a 30% increased chance of growth.
Though it is sometimes overlooked, a written business plan plays a key role in transforming a good idea into a great business venture. We should look at it as our personal game plan for a smooth and profitable business operation, the ultimate goal.
Your business plan will comb through and refine your idea, ultimately determining whether it is a worthwhile undertaking or not.
From saving time, money and resources, to acting as a guide and oversight for yourself and potential investors, a business plan has several benefits. While the upsides are invaluable, here’s why you should consider developing your business plan today.
Purpose and Goals
When creating a business plan, we should ask ourselves what exactly do we do/sell and what purpose does it serve? What problem can we solve in our own way? Your business plan will help assess the viability of your idea, and through careful analysis, it determines how sustainable it truly is.
All About the Numbers
Your business plan is evidence that your business is not only doable but can also be profitable.
By the end you should be able to estimate what your monthly expenses are – both to produce your goods/services as well as general operating costs like marketing, rent, internet, gas, website, taxes etc. Basically, figuring what your prices should look like to be profitable.
Financial planning also helps determine if you need start-up capital, an investor, or a plan to manage overheads more carefully. Most importantly, it identifies what you need to do to see a growth in profits and business size- this may look like securing staff or equipment to scale up within a timeframe.
Additionally, financial planning helps with money-saving decisions. With the use of any projected losses identified by your business plan, one can now strategise to minimise said loss or ultimately decide whether to proceed with the venture at all. Sometimes the effort outweighs the output as some businesses project a loss within the first 1–3 years.
We now know writing a solid business plan will cover the fundamentals all business owners should consider whether long-term or short-term. Let’s explore what yours should look like as we get started with setting up PlantQue – our pretend-small business venture. Writing one may be easier than you think.
Background
Your business plan should start with an executive summary which briefly gives your background, a condensed overview of what your business is and why it will be successful. This is presented at the beginning, but you should consider writing this last, after you’ve covered the general outline.
Vision + Mission Statement
Next should be your vision and mission statement. Stay with me here because there is a difference. Your vision statement visualises your goals, imagining what you want to be known for in the future. Your mission statement focuses on the present, expressing how you intend to achieve said vision. See below PlantQue’s vision and mission statement.
Vision – Growing our community through plant love.
Mission – To bring plant-lovers together by sharing information, knowledgeable service and offering proper plant care, creating a safe place for people to learn about and love plants of their own.
Target Customer
This is especially important to your success. From age to lifestyle, your business plan should define what your ideal target customer looks like. You must identify exactly who your product or service is for. Once established, you have a niche audience you specifically cater to.
Knowing who is your target customer, versus who is not, will allow you to reach and meet the needs of your demographic and retain their support. This can set you up for a greater chance of success.
For example, PlantQue can have 2 Target Customers:
Primary – The Average Plant-Lover. Fair knowledge in plants but may not be an expert / horticulturist. Will give unsolicited advice because they sound confident enough. Won’t go a month without visiting a plant store.
Secondary – The Freshly Green-Thumbed Grower. Has always been fascinated by the beauty of plants but was intimidated to buy their own. Finally took the leap and is now following every plant page online for info on how to keep their plants alive.
Both categories work to build the community of persons willing to share information and those in search of the information that’s easy to follow
Competitive Analysis
Sometimes competition brings out the best or worst in us. However your competitive analysis should not focus on rivalry – it is a tool for examining the market and improving your business idea. Your competitive analysis identifies strengths and weaknesses of others in the market and gives a true understanding of what already exists, allowing you to fill any missing gaps and separate yourself from the crowd. Does your business idea already exist? Does it work for the competitor? What can you do to stand out? Your competitive analysis will answer these and more about similar or existing products and services.
PlantQue’s main competitor may be a large non-experiential agro-shop that offers no warmth in dealing with customers. It’s likely you’ll get the plant you’re looking for, but only if you know what you want. Customers likely visit based on price and have no other contact with the store unless they visit.
However, PlantQue’s focus can then be to ensure each customer has access to a plant guide upon entry for consultation or notice of new in-store plants and gardening accessories. Communication is welcoming and non-condescending. Customers’ emails are obtained when cashing to be added to monthly newsletters that include tips, new items and general plant info in a personable manner. PlantQue is also likely to host garden parties once a month for mingling in a beautiful green oasis.
Product/ Service Description
There is great power in naming and identifying something. This also applies to your business plan. Your product or service description should provide a definitive breakdown and a clear description of precisely what you plan on delivering. If you can’t verbalise your business, how will you market it? In this section you should be able to answer the What, Why, Where, Who and How Much for your products and services.
For example:
PlantQue is an experiential plant hub that aims to share info and build a community among plant- lovers through their retail plant estate via mid-level to premium pricing.
Marketing + Promotion
Your marketing plan outlines the various ways you intend to market your business and reach customers. This should frame your promotion, distribution, and pricing strategies, while highlighting your unique selling points. This section of your business plan will explore the most efficient ways to communicate and engage with your target customers, in addition to distinguishing your business from competition.
The Marketing Mix or 4 Ps is a helpful guide to reference here- Price, Place, Product and Promotion.
Price– PlantQue may sell at mid-tier to premium pricing due to the greater perceived value and quality of products and services, as well as additional offerings- from information to events.
Place– The location is beautiful, clean and encourages regular visits by customers. The striking and inviting ambience prompts long hours browsing and possibly sipping a cup of tea on the patio in a peaceful surrounding. Layout is done strategically to encourage a longer stay, which may spur impulse purchases.
Product– Wide variety of plants of all sizes, colours, flora, tools, plant accessories, soil etc. Customers may also opt for delivery service if needed.
Promotion: With the other 3 Ps considered, the target customer profile, and findings in the competitive analysis, PlantQue will now choose which platforms are right for them to reach their target audience and speak to them in the language that will appeal to them the most.
Financial Projections
A financial forecast is integral to a good business plan. Here is where your idea is converted from concept into numbers. Calculating the costs to get your business up and running and the needed capital to achieve your goals should be covered in your financial projections. Budget, pricing, profits, sales and income statements, where applicable, should all be compiled in your business financials and projections.
By the end of this section, you should be confident in your ability to make a profit and commit to this venture. However, if the numbers don’t look as profitable as you thought, that’s ok – better to catch it now before you’ve gone live. Use this time to figure out what can be changed to ensure your business’ success.
If numbers aren’t really your thing, we strongly advise investing in a financial consultation from an accountant- a worthwhile step to avoiding major setbacks, especially where tax calculations are concerned.
Goal Setting
To keep your business moving forward you need to set goals, SMART goals to be exact. An acronym for specific, measurable, attainable, relevant and time based, your SMART goals are explicitly clear-cut and straightforward. This provides a comprehensive method to tracking progress and hitting targets. What do you want to specifically accomplish? How will you measure milestones and end results? How can you achieve this goal? Are your goals relevant to your vision or mission? What’s your realistic timeframe for meeting your goals? This section of your business plan unriddles these burning questions.
Once you’ve identified your goals, it is your job to hold yourself accountable. Weekly or monthly monitoring and tracking of progress gives room to adjust goals or find solutions if tactics aren’t working as expected.
This brings us to the end of our business plan checklist. By now you should understand the usefulness of a business plan and its core role in organisational success. In the simple words of senior accounting and finance expert Mr MCA Nazar; in business planning, making a business strategy develops a sense of where the business is right now, where you want your business to be in future and what you need to do to get there.
This ought to be the motivation needed to prioritise writing yours today (or pulling it out of the drawer you stuck it in).
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