Today, people expect more than just a decent paycheck at the end of a 40+ hour work week (especially millennials). They want to feel that their work and effort is valued and is truly contributing to the growth and success of a company, and they want to be recognized for a job well done.
So, when an employee isn’t satisfied with their work environment, it’s no surprise that some of them decide to opt for the more exciting small business route. In fact, some entrepreneurs claim they’d rather work 20 hours a day for themselves instead of working 8 for someone else.
Yes, being your own boss does sound really appealing. But on the other hand, you’re also choosing to carry 100% of the responsibility, which can be quite intimidating, especially if you’re unprepared.
According to a study, 50% of small businesses fail within the first five years. It’s a rather drastic stat, and yet people react to it differently: some get scared, others see a challenge. The truth is, there are many factors that will determine your company’s success or failure. Recognizing what’s in your control will give you the upper hand and help you prioritize and focus on activities that will make a difference.
When you’re starting a business, the first thing you should do, before anything else, is creating your small business plan. If done well, it will be a powerful foundation that will make every future decision easier, relevant and more effective. Let’s focus on the key steps you’ll need to take in order to create an impactful small business plan.
Small Business Plan Step 1: Company description
The key to a good plan is starting with what you already know and building around that theme.
For starters, you don’t need to write elaborate depictions and envision every single detail. A short description, a.k.a “the elevator pitch”, will do the trick. Imagine you have 30 seconds to explain what your company is all about, ideally reflecting your company’s vision and mission. What would that concise message sound like?
If you’re not sure about what you want your company to be, a good trick is to turn the tables and start with what you don’t want because sometimes we’re more aware of what we dislike. By doing this, and writing it all down, piece by piece you’ll start to paint a picture of what you want.
Small Business Plan Step 2: Product/service depiction
Now is the time to get real specific. Describe exactly what you plan to offer to the market in great detail. Whether it’s a product or service, there needs to be a reason why you think people would be willing to pay money for it. Try to pinpoint what makes your offer special and unique, how does it satisfy a specific need of the market and why do you think people will choose it over anything else that is available to them.
A SWOT analysis might be pretty handy at this point as it is a great framework for brainstorming the strengths, the weaknesses, the opportunities and the threats related to your product or service.
Small Business Plan Step 3: Market and competitor research
At this point, you should have let go of the idea that your entire business plan is already in your head and it just needs to come out on paper. The true value of your business plan will come from market research of 2 main things: your target audience and your competitors.
Usually, as you acquire information about one, you’ll learn more about the other. This is such an important step. So much so, you probably might choose to make an entirely separate plan in order to perform it more efficiently.
Take Groupe Dynamite for example. For years now, they’ve been using an invented target customer to whom they cater their whole experience, from merchandising to their brand, staff training, and website. Garage’s target is Alexa, a 16-year-old girl who loves spending time with her friends and being active, and Dynamite’s was Rachel, a late 20’s fashionable professional who enjoys the occasional 5a7 with her friends.
Small Business Plan Step 4: Organizational structure, team, and core processes
Here you’ll need to define your needs in terms of staffing resources. Once you’ve made an educated assessment on how many employees you’ll need (or can afford to hire), the next step would be to put everything down into what is called an organizational chart.
This chart serves as a visual aid which shows your organizational structure, basic information about your staff (like their purpose) and the relationship of your company’s core processes.
While bigger companies usually go with a hierarchical structure, often rigid and built around explicit sets of rules, smaller businesses have a tendency of choosing a flat structure, which gives them a competitive edge because of its added flexibility.
Small Business Plan Step 6: Marketing and sales strategy
Up until this point, you’ve defined what you’re going to sell and to whom you’re going to sell it to. Now, use this information to plan exactly how you intend to sell it.
Keep in mind that the more work you put into your research phase now, the easier it will be for you to determine the best processes (and eventually software) to assure you work efficiently and that your product or service will reach a relevant and sizeable portion of your market.
Starting a small business usually implies fairly limited resources so you’ll need to get creative and use a lot of marketing hacks to reduce your expenses.
On the bumpy road to becoming a self-starting entrepreneur, your business plan will be one of your closest allies. On top of providing a guiding direction for your company, it can also be used as a tool to secure funding.
Your business plan doesn’t have to be written in a specific order, and if you want, you can’t go back a step before starting a new one. All of these segments are naturally interwoven and you need to make the most out of those connections.
Your market analysis will shine a new light on your product, and your business model will help you pinpoint your most relevant competitors. Each piece of the puzzle will reshape your perspective and affect your outlook, but you need to maintain coherency between these sections so don’t be afraid to adjust accordingly.
Remember, your business might be small, but your dreams don’t have to be.
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