Business Startup Strategy
by Greg Balanko-Dickson
I strongly suggest that would-be entrepreneurs do a business plan. As a result of completing the plan you will be much better prepared and know whether or not your business idea is feasible. Try the following article for a short-cut. However, I caution you on following a short-cut unless you have substantial experience or knowledge about your area. Proceed with caution without a business plan!
How is your business unique, and why will your goods or services appeal to customers? What are the primary differences between your company and your competitors? What are the driving factors to choose your business over another?
In other words, what is the underlying reason a customer would do business with your company?
1) Define Your Business and Vision
Defining your vision is important. It will become the driving force of your business. Here are questions that will help you clarify your vision:
- Who is the customer?
- What business are you in?
- What do you sell (product/service)?
- What is your plan for growth?
- What is your primary competitive advantage?
2) Write Down Your Goals
Create a list of goals with a brief description of action items. If your business is a start up, you will want to put more effort into your short-term goals. Often a new business concept must go through a period of research and development before the outcome can be accurately predicted for longer time frames.
Create two sets of goals:
- Short term: range from six to 12 months.
- Long term: can be two to five years.
Explain, as specifically as possible, what you want to achieve. Start with your personal goals. Then list your business goals. Answer these questions:
- As the owner of this business, what do you want to achieve?
- How large or small do you want this business to be?
- Do you want to include family in your business?
- Staff: do you desire to provide employment, or perhaps, you have a strong opinion on not wanting to manage people.
- Is there some cause that you want the business to address?
- Describe the quality, quantity and/or service and customer satisfaction levels.
- How would you describe your primary competitive advantage?
- How do you see the business making a difference in the lives of your customers?
3) Understand Your Customer
It is not realistic to expect you can meet the needs of everyone, no business can. Choose your target market carefully. Overlook this area, and I guarantee you will be disappointed with the performance of your business. Get this right and you will be more than pleased with the results.
- Needs: what unmet needs do your prospective customers have? How does your business meet those needs? It is usually something the customer does not have or a need that is not currently being met. Identify those unmet needs.
- Wants: think of this as your customer’s desire or wish. It can also be a deficiency.
- Problems: remember people buy things to solve a specific problem. What problems does your product or service solve?
- Perceptions: what are the negative and positive perceptions that customers have about you, your profession and its products or services? Identify both the negative and positive consequences. You will be able to use what you learn when you start marketing and promoting your business.
4) Learn From Your Competition
You can learn a lot about your business and customers by looking at how your competitors do business. Here are some questions to help you learn from your competition and focus on your customer:
- What do you know about your target market?
- What competitors do you have?
- How are competitors approaching the market?
- What are the competitor’s weaknesses and strengths?
- How can you improve upon the competition’s approach?
- What are the lifestyles, demographics and psychographics of your ideal customer?
5) Financial Matters
How will you make money? What is your break-even point? How much profit potential does your business have? Take the time to invest in preparing financial projections.
These projections should take into account the collection period for your accounts receivables (outstanding customer accounts) as well as the payment terms for your suppliers. For example, you may pay your bills in 30 days, but have to wait 45-60 days to get paid from your customers.
A cash flow projection will show you how much working capital you will need during those “gaps” in your cash position.
I recommend thinking about these six key areas:
- Start up Investment
- Assumptions
- Running Monthly Overhead
- Streamlined Sales Forecast
- Cumulative Cash
- Break-even
6) Identify Your Marketing Strategy
There are four steps to creating a marketing strategy for your business:
- Identify All Target Markets: define WHO is your ideal customer or target market. Most companies experience 80% of their business from 20% of their customers. It makes sense then to direct your time and energy toward those customers who are most important.
- Qualify the Best Target Markets: the purpose of this step is to further qualify and determine which customer profile meets the best odds of success. The strategy is to position your business at the same level as the majority of the buyers you are targeting. It is critical to figure out who your best customers are and how to best position your company in the marketplace.
- Identify Tools, Strategies and Methods: a market you cannot access is a market you cannot serve. Marketing is the process of finding, communicating and educating your primary market about your products and services. Choose a combination of tools and strategies, that when combined, increase your odds of success.
- Test Marketing Strategy and Tools: the assumptions we do not verify are typically the ones that have the potential to create business problems. Take the time to test all business assumptions, especially when you are making major expenditures.
I would like to start up a business on milling. How best can you help with business plan.
Thanks for your question. We have several articles and resources on business planning here on bplans.com. You can look through our free sample plans and free business resources.
Palo Alto Software also offers business planning software which helps you, step by step, through the process of building your business plan. You can get more information about Business Plan Pro by going to our consumer website.
I need to do a business plan for the Startup for an Apple Orchard. How can you help me, please?
Im trying to Start A small beauty supply store do i need a business plan or should i chance it. The building is between three salons And my competition is On the other side of town. Rent is reasonable and getting supplies i wont know how much they are until i get lease
I am thinking of starting a gas station in a fast growing area of the city as of now the nearest station is about 8 miles away, also I would like to start a storage unit business in the same area I’m not sure which one to start first and how do I go about this, if I do not move fast I am afread some one else will start them
I am thinking of starting a cleaning service. Targeting residential and office cleaning. I have done a few small jobs and they were very profittable. The demographics is rural Southern IL. I have done some research and the competition is nearly none. I would like to grow into a full time cleaning service. Any suggestion?
I want to start a clothing store in the neighborhood I grew up in. The nearest clothing store is 10 miles or more.How do I go about getting a business start up plan?
Averi: how do you get a business start up plan? Write one. Use the steps above, in this article, and do it in your own words. Your business is unique and your plan is unique. You can do it.
I am needing someone to help me put a business port folio together. I do not have the first clue on how to do this. Can you help with this?
i am from india and planning to start an online travel agency…as the penetration level is very less by the competitors at the same time the major players in the industy are 5-6 in number…
How can you help me in getting funding from a VC
I will like to start a up business on printing press.How best can you help me with a plan
My name is Khashi and originally I am from Somalia, now I am a Canadian.
Not long ago I went to Ethiopia for a vacation and found that people there they really have the problem of drinking water, so I decided to start a small busness in water well drilling, to help those a need and of course my self.
Please B-Plan can you help me to make a project or a business plan in this.
Thank You,
Khashi
hi bplan,i would be really pleased if you help me on these one.I would like to start a magazine business.
i wan hair salon in our college
I was thinking of starting a beauty supply store. African american women by hair and hair products every other day this would be a great business to go into.
I am an african american woman and I myself by hair products like crazy.
I WOULD LOVE TO GET A business plan on my in home child care center to expand it so that I can better serve and educaticnal the parents of my community on resources that will better services them.Happpy kidz feel that Providing support helps dream come to reality.
hey bplan i think this is wonderful how your giving us, the ones whom are a little less knowledgeable of the business world the advantage of learning about it. But I am in the process of starting my own entertainment company it will deal with fashion and singing and alot more. So can you please get back to me with some advice. Thanx
how are you doing we can use each other to our advantage because i have many connect and im sure you do to email me
The Windows software package Business Plan Pro is an excellent tool for developing a professional business plan.
You may choose to write a simple or a standard business plan. It customizes outline topics, tables, and charts depending on whether your business is retail, a service or product provider, manufacturer, for profit or non-profit, ongoing or start-up, etc… We haven’t yet heard of a business that couldn’t complete a business plan using Business Plan Pro.
Business Plan Pro will guide you through the process with a flexible outline of about four dozen topics organized into chapters, topics, and subtopics, with links to the proper tables and charts. Each topic has a split screen (if you choose to) that explains what should be covered, and where to find the information. With the click of a single button, you may view an example of what that topic will look like in the finished business plan.
We also have online tutorials which will walk you through several sections of Business Plan Pro.
You may order Business Plan Pro online at our website.
Please let me know if you have any additional questions.
Best regards,
Casi Deatherage
Palo Alto Software
Customer Care
Im 16 and i really want to set up my own buisness i just dont know how to do that…how can i set up my own buisness
the bplan samples are very good.
i need more of identifying the need or how to identify the need of startup a business at a particular area.
The article is very educative, I plan to open up a bookshop in my area and i am in the process of developing a business plan. Your advice will be appreciated
Hi Greg,
I’am a semi retired small bussiness owner have you ever thought of going out and actully holding seminars on this in different cities ? Just wondering because I have a pretty good Idea how to do it . we can talk if you would like. Thanks for your time
Doug
I am a male Ugandan with a vision of starting a restaurant in one of the busy towns in Uganda. I have read samples of business plans and they have given me the courage to go ahead. But how best can i raise initial starting capital? Thank you.
I am a male Ugandan with a vision of starting a restaurant in one of the busy towns in Uganda. How best can i raise initial starting capital? Thank you.