Beata Leyland
Business Owner & Author of this article
What will your company be doing on the market on a daily basis to generate revenue?
Intrigued ?
Every person who wants to become an entrepreneur at certain point creates a business plan which describes a business idea, market research and analysis and financial plans.
Such a document describes what the company plans to do,
what is the offer,
how the offer will be promoted,
sold,
what’s the target audience,
financial plans and goals.
Two decades ago, creating a business plan was a common practice for any type of business but now I wouldn’t say it’s that common, mostly because of the number of external factors which cannot be predicted ( wars, global pandemic , unexpected political moves) but also because many LLCs are formed to so-called “test the ground “.
When I speak with LLC owners, the majority of them have a draft of the plan with research and the rest is a matter of trial and error.
Is it right or wrong?
Well, I would say it truly depends on the industry, however, what I know for sure is the ones who have a bit more than a rough draft give themselves more tools to navigate difficult situations.
What I mean by that?
Analysis of your competitors and market is something which at the beginning only you can do as someone who has a rough idea.
First to see what is on the market, and what is available plays with your idea and what you should modify.
As a comparison, 20-30 page business plans in the past were absolutely normal for startups; now such plans are rather prepared for a corporation not an LLC, or LLC with a few years on the market.
The first business plan is rather incorrect no matter of external circumstances as your idea will evolve while testing the waters to see what works and what doesn’t.
I am a big fan of business plans/editable drawing boards which can help you to understand more where you are and what kind of moves you have in a given environment.
Let me show you step-by-step what can help you to build a better starting point.
Treat creating a first business plan as a tool which can help you to put all puzzles in your head together so you can see if this makes sense, what should be modified or postponed, and what is not negotiable.
You don’t have to follow the order in terms of filling in all points!
Executive Summary.
It’s a part which will headline what is your goal and how you plan to achieve it.
This part should be written last as based on all research as you might modify it many times during the whole process.
Information about company: Name, domain name, address and what owners bring to the table in terms of competitions.
Location, catchy name of the company (or not), and address all matter when you think already a few steps ahead how you will sell your offer and how you position yourself on the market.
Part about owners’ competition is crucial for a fair assessment what is real and which areas are to be improved.
For instance, in my example what was real was 10+ years hands-on business experience, stress resilience, a few foreign languages, and negotiations. Areas for improvement were: marketing, sales and dealing with bureaucracy in general.
Market Analysis and Competitors.
To be frank with you I like starting business plans from this point as without confronting how your idea fits on the market there is no point to waste time and money in the first place.
Try to do first analysis on your own as only you know what you need and how capable you are to adjust your idea.
If you want to launch a dog snack look what is available on the market.
Why will your product stand out from the crowd?
Who would like to buy it?
How do you want to sell it?
Who will be your customer?
Where do your customers gather?
What do they do for a living and even how do they dress?
The goal is to truly understand and position yourself in the new environment.
Do you feel comfortable doing what you plan to do?
Although this question might sound silly you would be truly surprised how many people don’t.
This point will help you to define your gaps, what should be improved, and what are areas in your mindset which require polishing or reconstructing.
Mindset is so important to keep going, that’s why as honest as you are with yourself the better.
Your offer.
After analysing your competitors now is the time to define your product.
What do you plan to sell; products or services or both?
How will your product look like?
Who will be your client?
Partially I’ve mentioned already that in the previous point.
For me, once you analyse the market and competitors immediately jumping to “what I can do better?” and “who is my client” is a natural way of thinking.
Try to break down as much as possible who you want to target with your product.
Marketing and Sales.
How do you want to sell your product?
Where are your sales channels?
Should you start advertising now to create better visibility?
Website, shop, advertising strategy, maybe an assigned person to run the social media accounts?
Come back to your competitors and see what works for them as this might inspire you at the very beginning.
What is crucial is to be yourself as you can only excel being yourself long-term. If you have gaps here, read books, listen to a few podcasts and find a person who resonates with your idea of business and think how to build your brand as brand recognition is the key for sustainable long-term existence of your company.
Finally, what is your target price or rather price range.
Where can you compromise?
What is important?
What kind of story your price will tell?
What’s your pricing strategy?
How do you want to build your position on the market having in mind your pricing strategy?
Daily activities of the company.
What will your company be doing on the market on a daily basis to generate revenue?
What are your distribution and logistic channels?
Who are the people working there?
Here you will also easily spot what should be done on a daily basis to make sure you generate income, like for instance for solo entrepreneurs, marketing and sales.
Financial Strategy.
How much will all of that cost?
What can you afford to do and where do costs have to be cut?
A revenue forecast for a new product will inevitably be a rough estimate, but it’s still essential.
Many companies fail to reach their break-even point because they move forward just to test the ground and do not clearly understand the true cost of generating revenue.
A close friend of mine is a financial advisor for companies and 90% of small companies come to her with debts exactly because they never defined the real costs of making money and profit.
In the world of so many unknowns it is important to stay alive on the market but if you clearly don’t break even then changing the strategy or product is important.
That’s why an honest review or perhaps maybe a consultation with a 3rd party could help you to better understand if the idea which you have in your head financially makes sense.
And it’s better to do it now on the stage of pre-formation or early formation of the company than a few years later with huge debts on the accounts.
Calendar
What will you do when to achieve your goals?
Here I would rather put a conservative approach as especially at the beginning with a new company you gain “know how” which takes a while.
What the market brings, and what kind of suppliers are on the market can be very volatile.
What is possible and what not? Do you have samples of your products? Landing the first clients simply take time and you need to be prepared for it.
Most likely you will also modify your idea as a product-market fit is something which takes a while to identify properly.
Have your mind open for suggestions, ask lot of questions and be critical towards responses.
I hope that I convince you to create a business plan, as by putting all these elements together you will see faster and easier what doesn’t work and how your initial idea should be modified.
It’s not a waste of time, rather a tool to help you to respect your time.
If you need help with creating your first business plan,
putting all your thoughts together,
brainstorm together,
then let us know.
We can help you with
business planning,
forecasting,
market analysis
and supplier sourcing
Call us,
Text us,
Book a Consultation
We work on the global clock 