If you want your business plan to deliver results for you, then you have to get involved in creating your plan. Writing a business plan has been discussed in detail in a series of two articles titled ‘Essential Business Plan for Start-ups – Individual Hoshin Plan’.
But even before starting to writing a business plan, there are a few things which one should have completed. In this article, let me share with you those which are basic and needs to be surely considered.
Assessing the external environment
– Have you found out what products/services are available in the market?
– Have you tried competitors’ products/services?
– It’s good to have a table of what features are offered and missing in all your competition.
– What competitor moves create opportunity and what moves create threats? – You must have already done a price-benchmarking of your competition
– Try to research industry specific literature, forums and internet on trends and commentaries from established players and experts. It certainly gives you a perspective
– If there is a trade union or formal group in the segment you are targeting, then its good for you to speak to their President and understand his perspective
– Try to get the size of the market from industry reports, research studies or from the balance sheet of your listed competitors If you have some budgets allocated for market research, then you can get an agency to do some work in this direction, but if you are starting new, I would recommend you try this out yourself. Believe me, its worth the effort. The outcome of all this research should help you define what is market offering and where are the opportunities and threats.
Listening to your customers
– Do you know who your potential customers are?
– Can you segment their demography? More often than not, I have found people say that, my product is for everyone. While that could be true, which segment would it be most beneficial to?
– Have you bothered to speak to few customers of your idea?
– Target to formally interview few customers and in the interview try selling competitors products to them. This will help you gauge their reactions about products and services that already exist in the market.
– Where do future needs of customers match your strengths?
The outcome of this step is to validate the need for the service or product you are creating and understanding prioritizing of your customers.
Assessing the internal environment
– Have you assessed what skills are needed to run this business? Many times people take it for granted in assuming the vast variety of skills needed in a business. For example, if you are setting up a IT business, you may need business development, HR, commercial & legal skills apart from IT technical knowledge
– Assess if you would acquire these skills, hire people or contract them and when?
– If you are creating a business plan to expand your existing business line, consider gathering information on past performance
– What obstacles do you face?
The outcome of this step is to ascertain your (organization’s) strengths and weakness
Complete the SWOT analysis
– Use the information from the above 3 steps to summarize your strengths, weakness, opportunities and threats
– Identify the strengths and weaknesses first, then opportunities and threats
– Identify the 2-3 key strengths, weaknesses, opportunities and threats that have the greatest impact on your ability to achieve benchmark and execute your strategies
The purpose of a SWOT (Strengths/Weaknesses, Opportunities/threats) analysis is to isolate key issues in order to lay the foundation for developing a strategy. It pulls together the key learning’s from prior year performance, the Voice of the Customer and Voice of the Business and an external environmental scan. The Strengths/ Weaknesses dimension is used for internal elements, the Opportunities/ Threats dimension is used for external elements. The results of the SWOT are typically laid out in a grid.
When you are done with all this, you are ready to start working on your business plan!
[Guest article by Nilakanta Srinivasan of Collaborat.]
Recommended Read: How to Write a Business Plan?