Are You Building a Small Business Plan That's Bulletproof? 5 Successful Strategies to Try
A survey of 116 businesses launched between 1985 and 2003 found that there was no difference in business success between start-ups with a formal business plan and those who winged it without one. However, they did conclude that if there was any external capital needed then a business plan was needed too. Author and small business consultant Rosalind Resnick says that even if you are not using other people's money, a good business plan will help you "make sure you don't throw your own hard-earned savings down the drain."
Are you building a business plan with the hopes of success? We have five successful small business strategies for you to try now to take it to the next level. Read on to bulletproof your plan.
1. Collaborate When Building a Business Plan
Your business plan will be all the stronger for incorporating ideas from a broad range of sources. Many perspectives can be helpful for creating an effective plan. Customers, employees, owners, your community, and suppliers can all contribute usefully to the plan.
Engaging your team is especially important. If you are planning a start-up, involving employees can help get their buy-in. You might need extra commitment and motivation if things are tough to begin with.
If your business plan is for an existing business, involving your people not only helps with their engagement, but they also may have information that you need. They may be closer to customers and the day-to-day challenges than you.
Involving your people in the planning process will help with their understanding of the business goals and objectives. This will help them understand how they can best contribute to achieving the plan. If your people know the vision for the business and their part in achieving it, you are well on your way to a bulletproof plan.
2. Include a Marketing Plan
A business plan that does not center on the customer or market is a plan without a focus. The marketing plan is where you answer key questions about your customers, products, positioning, pricing, and communication strategies.
Define your target customer. Sometimes start-ups describe their business in terms of the business sector they are in rather than by the customers they are seeking to serve. They say "we are in the bookselling business" rather than "we aim to sell to people who love reading".
It's this sort of error that leads businesses to miss opportunities like offering e-books and e-readers. Ever wonder why there are so few bookshops around?
The marketing plan is the place to be specific about what your product is. What's special about it? Why should a customer buy it?
Think through the location of your business or what channels you will use to sell or distribute your product. How will you price the product? Are you about low price or premium quality?
Lastly, how will you communicate with customers? This is not just advertising but also what messages will you communicate through a web presence, packaging, and public relations.
3. Competitive Strategy
Think through why your customers should buy from you rather than a competitor. This may be a challenge but try to see it from the customers perspective. Be critical of your business proposition and really test it out.
If you expect people to pay more for your product than a competitor's product, think through what reasons they would have for doing so. It's not enough to say you have to sell your product at a higher price because your rent is high or your materials are going up in price. The customer has to perceive some value in your product that is not in your competitors in order to pay more.
The added value may be great after sales service, confidence in your returns policy, an amazing buying experience or a unique product feature. Is the added value really there? If it's not, build it in or work at reducing your price.
If your competitive strategy is to be the lowest price around can you sustain this? Any fool can sell a product or service at lower than it costs to make or deliver. A low-price strategy has to have a low-cost strategy to support it.
A low-cost strategy means buying better than your competitors, economies of scale, better use of technology, or greater efficiency. What is your source of competitive advantage? If you can't operate more cost-effectively than the competition then you will be priced out of the market or fail to make profits.
4. Execute Your Plan
The number of Business Plans that have been worked on lovingly and then abandoned at the last minute must be huge. When the going gets tough it's natural to revert back to what you know. That means not facing up to the challenge of executing the plan.
It does take an effort to execute the plan, but if it's going to be useful, it needs to be done. A bulletproof vest left on the hanger is as useful as a chocolate teapot. A business plan offers no protection or support to your business if it is not used.
Make sure everybody knows the reason for the business plan, specifically what it will do for the business and for the people working for the business. Be clear about the vision and help people share it.
Build capability to deliver the plan. This means resourcing it, training and developing people, and giving them time to deliver it. Set out the first few steps so your team can put your plan into action.
5. Align the People
Businesses often say, "people are our greatest asset". These businesses might say it but often they don't act as if this is the case. The truth may be that people are not their greatest asset.
It's the way some organizations empower their people that make them their greatest asset. Having a clear alignment of people's’ interests and the business’s interests is one aspect of this. Giving people a stake in the businesses success goes a long way towards doing this.
Involving people in the business planning process gives them a psychological stake in the success of that plan. Nobody wants to see their own plan fail. People work harder to deliver it simply because it was at least partly their idea.
Find ways of encouraging a shared interest in delivering the plan. Shared incentives do this so much better than competitive ones do. This way people share information, knowledge, and skills.
Just Go for It
These strategies can help make your marketing plan more successful. It takes you to initiate it and to commit to the process. What are you waiting for?
Get started building a business plan. Get some ideas down. Involve people and go for it.
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