From Conception to Reality
You’ve thought about your business idea, considered every reason why you shouldn’t do it and why you should. You’re ready to move on to making it a reality instead of a dream, so what’s your next step?
While this idea may seem scary, time consuming, and boring, it really doesn’t have to be. Well, maybe it does have to be a little time consuming, but the idea has already been consuming you right?
Let’s use the Journaling for Entrepreneurs process, breaking the business plan down into its five simple steps and see how easy it can be!
Step One: Determine Your Purpose
In your business plan, you will need to include a mission statement and a description of the business. Using your entrepreneur’s journal will help you evaluate your ideas before creating the official business plan. to start, let’s look at creating the missions statement:
What is a mission statement?
This is the summary of what you hope to accomplish with your business. To determine your mission, answer these questions:
- Why do I want to start a business?
- Am I offering a product or a service?
- What problem will I solve for my customers?
- What are my strengths and weaknesses?
- How will my strengths help me provide what I am promising?
The answers to these questions will help you create a two-to-three sentence statement to define your goals.
How do I describe my business?
This is where you will answer some of the more practical questions about what your business will look like. You have already determined whether you will offer a product or service, now it’s time to answer some of the other descriptive questions:
- Will this be an online or brick-and-mortar set-up?
- Will I be doing this part-time or full-time?
- What type of business is this? (sole-proprietor, partnership, corporation…)
- What licenses, if any, do I need?
- What exactly am I offering? (be specific)
- What other services will I need to offer?
- Do I need suppliers? Who will these suppliers be?
- What qualifications do I have to manage my business?
Include any other pertinent information about how your business will be run. Make sure you do your research on licensing and regulations. You don’t want to get started and discover you missed an important step.
Step Two: Market Research
Once you have an idea of what the business will look like and what you hope to accomplish, you want to do a little market research to make sure your proposal will have a customer base.
For this step, you first need to decide what your target market is, and who your target audience is.
What market does your product or service fit into? Be as specific as possible for this question. This has to do with what problem you are trying to fix.
- You are creating a new app that will help organize and schedule deadlines. You want to market this to small businesses or entrepreneurs.
- You are offering a service to help edit and manage essays. You want to market to high school and college students.
Once you’ve determined your market, you want to really understand who your target audience is. Try to be as specific as possible with your description of your ideal customer:
- Age range
- Gender (if applicable)
- Financial situation
- Education level
- What about them would make your product or service appeal to them?
Try to get a real picture of what this customer looks like. This will help you understand how to market your business appropriately.
Now that you know who your target audience is, it’s time to get some feedback from them. Talk to potential customers to make sure you really would be helping them:
- How do they currently deal with the problem you plan to solve?
- What are competitors offering?
- Would your business’ solution appeal to their needs, and more importantly their wants?
- How is your option different, and preferably better, than your competition?
Listen to what your target audience has to say and use it to create a better marketing plan. They will tell you what is important to them if you will take the time to hear it.
Make sure you keep a record of the answers you receive each step of the way. Use your Journaling for Entrepreneurs process to keep up with each step. You use the journal first so you can jot down everything, then use that to refine your ideas for the official business plan.
Step Three: A Little Financial Planning
This is probably the scariest part to most people starting out, but it doesn’t have to be. You don’t have to be an accounting genius or a financial wizard to make some plans for your finances.
All you need is a simple idea for how you plan to fund the start-up for your business, and how you plan to handle things until you start to make a profit.
It is important to remember that most businesses will not start making a profit their first year!
To start your planning, determine what you will need to get the business started.
- What equipment and supplies do you need to start? What do you already have?
- How much are you willing to spend on advertising?
- Will you have employees? If so how much will you have to pay them?
- Insurance costs if necessary?
- Licensing fees?
- Rent or mortgage payment if setting up outside your home?
- What other payments will you need to plan on?
Make sure you have a good grasp of the cost to get started and maintain operations. Remember, equipment will break down and supplies will have to be replenished, so plan for this.
Once you have a good grasp of your start-up costs, you want to determine how much money you can put into the business to start (your capital). This will help you determine how much you will need from investors or loans.
You may not have to purchase everything required to get started. If you already have some of the equipment needed, like a computer, this can be considered an asset in the business and will not have to go into the cost planning. Do make sure you keep a list of your assets though.
You also want to keep a list of the debts you already owe for the business. These numbers will all go into the financial plan.
Next, you want to do a little fortune telling.
Well, not really, but you do want to make some estimates on your business’ success. This will require a little research, as you want to look at the market you plan to enter and see how business is moving. Some of the questions your research will help answer include:
- How long do you expect it to take to start having paying customers?
- How do you, realistically, expect your sales to go within the first year?
- The same question for the first couple of years?
- How long until you expect to start making a profit?
- What measures do you have in place to start paying off debts?
- What costs do you see in the future to keep your business going?
During this planning, you also want to evaluate potential risks for your business. Obviously, you can’t plan for everything, but there are some obvious potential risks you can consider from the beginning.
Take some time to determine the most likely obstacles you could run into and make some contingency plans for these situations.
For example, what would you do if a supplier is out of a needed item?
How will you ensure security for your website? Spoiler for the next section: You really do want a website!
Step Four: The Marketing Plan
Okay, now that we are done with the most boring part of the business plan, it’s time to move on to how you will make sure people know about your business.
For this section, you will want to consult your notes on how much you’re willing to spend on advertising, and you may decide to adjust that as you continue to plan.
The first question to ask yourself is: how do I plan on marketing my business? Options include:
- Create a website!
You really should plan on having a website. There are so many options out there, including free ones, and numerous tutorials on how to set it up. Almost anyone you talk to is going to want to know if you have a website.
I’m not going to go into all the benefits of a website because I’ve done that previously, but just trust me, you want a website.
- Social Media
With social media, you can create accounts for your business where you can alert customers to new promotions, products, or services. You can also become a little more personally connected to your audience through these means.
You don’t have to be on every social media platform out there, but some common ones include Facebook, Twitter, Instagram, and LinkedIn. The platforms you decide to use will largely depend on how you want to interact with your audience.
- Flyers and brochures
Anyone who has word processing software can easily create their own flyers and brochures. There are numerous templates to choose from to help you.
- Promotional discounts and freebies
This is a great way to get your audience’s attention. Discounts and freebies appeal to everyone.
With freebies it doesn’t have to be something huge. Can you offer advice or tips? Create a free e-book with this material. Or you can create a free report related to your market. There are many options here.
These are not the only options available, just some common ones. Do some research and get creative with your marketing plans.
Next, you will want to ask yourself: Will I be handling my marketing on my own, or will I hire someone to do this for me? See, you need those financial plans in hand to make this determination. You also need to be realistic about your marketing ability.
If you want to hire someone, there are many options out there for advertising agents or freelance marketers. A quick search will find you someone able to create a logo, manage your social media accounts, design your website, and so on.
Remember, you don’t have to do everything yourself, but you want to be realistic about how you can manage your marketing needs.
Step Five: Make it Presentable
Now that you have collected all your information, you want to put it together in a presentable package to present to investors or other financiers, or really anyone else who may need the information.
For this, you can find templates online, or in your word processing software, or you can do-it-yourself, breaking it up based on the steps above.
You can also hire someone else to put it together for you if you are so inclined.
The point is to provide the information in a clear-cut, easy to read manner, so you can have quick access to the information. This helps you as you re-evaluate your goals and needs, as well as when you need to present the information to someone else.
Depending on the type of business you plan to create, the business plan can be as simple as a one-page document, or for a more complex business setting, can be a more formal packet.
The process doesn’t have to involve a lot of legalese or complicated configurations. All you need to do is break it down into these easy steps, and you will find it is simple to accomplish.
Would you add anything to the plan? Let me know in the comments.
If you need more help with this process, you may want to check out the 5-Step Business Plan Journal. This journal will take you through each step to help you create your own business plan.
If you have any questions about a specific part of the process, you can comment. You can also contact me using the form on the About page.