One of the most confusing processes for any business owner or head is business planning. I’ve helped clients put actionable business plans together and seen them achieve their stretched targets time after time. I know there are trap doors, missed steps and bumps on the road to successful planning. Along the way, I’ve discovered seven key elements that are crucial to the success of a business plan, and its ability to be practical and actionable. Here’s a brief outline of each of those action points:
1. Identify the Market Need
Begin with a concrete market need. Many entrepreneurs are focused on innovative product development and finding the next great thing. The innovation process depends on the business’s ability to identify the market need at the core of the product offering. Understanding what your market’s specific needs are is one of the first keys to cracking the business planning code. Without that, don’t even start.
2. Identify the Market Size and Niche Criteria
You have identified your active market need. Ensuring this need is of a size that allows you to grow a sustainable, long-term business that can be scaled up is key to your growth. Start first by writing down the critical criteria that define your market segment, and the active market niche you are going to target. Next, move on to quantifying that market by understanding its size, its buying power and the disposable spend it has allocated to the need your product satisfies.
3. Recognize your Unique Value Proposition
Are you setting out to create yet another “me too” company with already existing products or services? Or have you identified something that helps you stand out from your competitors? Can you clearly articulate what makes your products and services unique and how they differentiate you in the market place? Do the members of your niche market agree with you and see the uniqueness in what you offer? For your business to get to its tipping point and start on a sustainable growth trajectory, you will need to be clear on your USP. Your USP must be aligned with customer sentiment, and subsequent behavior.
4. Name Your Key Stakeholders
Have you identified your key stakeholders? What are they looking for? What is their desired outcome from the success of your business? How do the different stakeholders add value to your business and how do they extract value from it? Stakeholders can enable the growth of your organization or even hold it back. How can you energize them?
5. Devise Relevant Promotional Strategies
Identifying the marketing strategies that enable growth in your business and help you multiply your customer base at a viable cost of acquisition is key. It helps you to crack the marketing and lead-generation puzzle without plunging your capital into black holes that do not generate the results you need to grow your business on auto-pilot.
6. Breakdown Your Revenue Streams
Being able to identify and have a thorough understanding of where your revenue is coming from is vital. Which products sell better to which target market? Which products return a better profitability? Getting your revenue portfolio and the profitability of the individual streams right is essential. It’s also imperative to understand the inherent risks that may be attached.
7. Budget Capital Needs and Breakeven Plan
Finally, figuring out how much money you need to start, operate and grow your business is crucial. You also must know what needs to happen in order for you to skip through the milestones of business success, such as breakeven, return on investment, customer growth, sales revenue, and profit. This is the final key in figuring out the viability of your business and investment, and its sustainable growth and success.
By making sure you cover these seven key elements, you will have a sound actionable plan that can deliver the numbers and success you are aiming for.