Business plan for a successful business
What is a business plan?
A formal detailed written description of your business future plans and goals, ways to achieve those goals, in a certain time frame, strategies to achieve the goals and business values in a single document, is known as a business plan. A business plan may change time to time, as the business grows.
Why is a business plan important?
A business plan is like a map to success. This document helps entrepreneurs to convey their vision to give their employees a prospective, attract potential investors, apply for loans from banks, help manage business better, etc.
Who needs a business plan?
Many people believe a business plan is only important for start-ups or when a company needs a loan. But that’s not the case. The business plan is important for start-ups as well as for existing businesses. For start-ups, Business plans help to convey the new idea, why this business is important, for hiring the right candidates for jobs, for approaching investors, to know their market and competitors, etc.
The market condition keeps on changing, the existing businesses need to take all the advantages of the opportunities and be prepared for the unknown problems. Hence, a business plan helps them to manage the venture, to track growth, give them directions to achieve their goals, spot the problem, etc.
Business plans can be confusing and overwhelming at the same time. But trust me you can make your own business plan in a few hours with the help of the Lean Plan method. The Lean Plan is a one-page business plan which you can make yourself. It’s quick, easy and effective.
Here are the pointers you need to mention in your business plan, in detail, according to the Lean Plan method.
- Identify Consumers:
Everyone wants to target a large group of audience. When we directly jump for a larger group, there will be many obligations, this way we won’t be able to come up with the product and to impress the larger group is not an easy task. When a new product or brand is launched, a smaller segment of the consumers is more preferable. Once the product is accepted and loved by a targeted small group of consumers, we can expand our audience later. To run in a race, first, you need to learn how to walk first.
To know who should be your potential customer, you need to learn, who all needs this product? Who is willing to try and buy your product first? What is their age group? What is their geographical and economical condition? Is the product easily accessible?
- Consumer’s Problems:
Why should anyone buy or invest in your product?
Learn what are the top problems or discomfort society is facing.
So, to create an average demand, know how your product is helpful to the society/consumer. Many brands simply follow their competitors’ footsteps and never actually bothered to know what could help their consumers. Solving consumers’ problems, makes your product more favourable.
How to identify the top problems?
Get a major problem. Learn the reason why is that a problem, this will give you a few sub-problems to that problem. Keep asking “Why” till you get to the depth. Now pick the top 3-5 major problems.
- Our Solutions:
Here, list all the possible ways, your product will be able to solve top 3-5 problems, mentioned in the above section and make a huge difference in your customers’ life.
- List Revenue Streams:
In this section, you need to list all your sources of revenue. State your customers who are going to buy and re-buy your product in a certain period of time. This will give you an average number of sales. Mention your pricing model. For any successful business, the price of the product plays an important role. Many make mistakes by pricing their product based on their cost price, but instead, you should price your product according to the value or purpose it serves. Another thing which one should list is Monetizable pain.
Monetizable pain means a pain that makes customers return your cold calls and show interest in your product just because they are so desperate to solve the problem and only you know how to solve it.
- Unique Value Proposition:
A simple and clear message which helps unaware people into potential customers. The unique value proposition is very specific, no useless buzzwords required. Remember this all revolves around customers so it should start by pointing at a major problem and end with an amazing solution. You need to show your creativity in such a way that you stand out as well as it actually fulfils the needs of your consumers, which are mentioned in solution section, in a certain period of time.
- Connect with your Customers:
Consumers don’t know you exist. So, it’s your duty to introduce yourself in the market in such a way that is profitable to the business. There are few common ways to spread awareness among consumers like marketing, advertisements and sales. There are many other ways a company should consider in order to connect with potential consumers like cold calls and emails, blogs, direct approach on social media, attending or sponsoring events, etc. Many brands don’t opt for these options because they feel it’s beneath them and that’s where they fail.
- Key Metrics:
In this section, you need to mention your goals and how you are going to achieve them in a certain period of time. List down all the things which will help you to achieve that goal and a model to support your plan. Market situations keep on changing. Hence the goal, mentioned here, is a reasonable growth/ profit, what you are aiming for and working hard to achieve, but the result may vary. The time frame of 3 years or less is more favourable.
If you are planning to extend your existing business, you also need to mention how your business is doing aka. Current situation.
- Business’s Cost Structure:
For a bank, who is providing you loan or Investors who are going to invest in your company only bother about their share of profit. Hence, Product’s/ Business’s cost structure comes into the picture. Here you need to mention the fixed cost, variable cost and profit.
Fixed Cost: An amount which a business has to pay, without considering if the business is making a profit or in loss, working or not.
Example: rent, salaries, etc.
Variable Cost: A cost that varies with the situation or level of output.
Examples: Electricity, raw materials, packaging, etc.
Profit: The selling price of the product minus the cost price of the product, the remaining amount is called Profit.
- Unfair Advantages:
Here we need to list out the things how our competitors won’t be able to copy. It’s the advantages which no one else could have, like values, existing customers, features, secret information, unique design model, amazing team of employees, passion, SEO ranking, Endorsement, technology, patent, etc.
Anything which makes your brand/ product/ business stand out and no one else could copy your product and makes it different from your competitors.
These pointers sum up everything you need to mention in your successful business plan. I hope this will help you to achieve your goals. To become a successful entrepreneur, learn how to be productive as an entrepreneur.