Monday, May 24, 2010

Business planning

Beth and I were interviewed by a reporter for our local newspaper recently and he asked us for the number one piece of advice we would give to someone looking to start a new business. We told him “Have a plan”. This is probably not surprising to many people since writing business plans is a service we offer and we teach a class which helps prospective business owners write their own business plan. We picked this as our number of piece of advice because we have seen the failures and frustrations that come from a business lacking a good plan.

A good business plan is not just to give to a lender to get a loan for your company. Having a plan allows you to think through all the keys items and issues a successful business needs. I read a great article once which stated that “starting a business without a business plan is like driving on a winding mountain road at top speed wearing a blindfold.” What a great analogy! You might drive off the cliff and crash. You might end up somewhere but you don’t know where and it may not be where you wanted to be.

Today we will focus on the marketing end of the business plan.

A successful business is one that sees an unmet need in its community and fills that need. That means if you are looking to start your own business, you need to offer a product or service that meets a need in you r community-whether it is a regional community or an on-line community. Having a great product or service is only part of the equation for success. The next part is your target market: who will you be offering your product or service too? You need a specific target when you are selling and having a good business plan will help you identify this target. This will require some research on your part to determine who needs your product or service and where they can be found.

Once you have identified your target market, you need to figure out how you will find them or how they will find you. A truly useful business plan has a solid marketing plan within it. This is a specific blueprint of who your customers or clients will be and how they will find you. Are you going to advertise on bill boards, in magazines, in the newspaper, on television, on the internet? How much will each ad cost and how much can you afford? We will get into financial matters in a later article! You also need to think about how networking, referrals and testimonials will work for your business. Have you investigated all the social media outlets and determined how they will work best for you? A new business owner not only has limited financial resources, she also has limits on her time so a solid plan for networking is important.

Another key component to your business plan in laying out the metrics you will track to determine the effectiveness of your marketing. Ideally, you will be able to determine how each customer or client found you and you will use this information to decide where your marketing dollars and networking energies will be focused in the future.

Planning out who you will be selling to and how you will connect with them will help you focus your time, money and energy as you establish your new business. A good business plan will help you do just that. We will get into pricing, the operations plan, and other financial matters next…stay tuned!