Three Fs for Writing a Business Plan
Writing a real business plan comes innately only to a few. And that too after much skill. Those few may have chosen it as a career. Sometimes people in the academe write them for firms to earn a living. While the task is a chore to many for beginners it is a complete riddle. Start-ups find themselves compelled to write one for various reasons. The most common reason among them is to raise funds. People also write such plans for private investors. The aim then to get them to invest money in the firm. Another motive is to raise the stake in the firm. Also, entrepreneurs write them while seeking for new business. Even to sell the firm. Not knowing how to write one can be a nightmare. Here we give you a practical approach. We hope it can serve as a basic guideline.
Writing a real business plan comes innately only to a few. And that too after much skill. Those few may have chosen it as a career. Sometimes people in the academe write them for firms to earn a living. Even to sell the firm. Here we give you a practical approach.
Many people fail in their attempts to sit down and write a business plan. Because they face starting problems. An outline can help in overcoming the problem. Outlining involves jotting down what to write. Bear in mind the purpose of drafting the plan. Write as if you are talking to the target reader. In addition, think about who would be reading it. And draft an outline of what kind of info or data to include in it. Start writing the business plan section by section. This way provides a unified and logical flow to the rest of the content. It then becomes easier to arrange facts. Then start compiling them in a clear manner. Such a framework would appeal to the right audience.
Many people fail in their attempts to sit down and write a business plan. Because they face starting problems. An outline can help in overcoming the problem.
This stage is known as mapping scheme because it involves forming the exact order of sections. Delve deeper and write each area concisely for greater clarity. Planning stage is the muscles and flesh. It makes the content rich. Well, the target reader should find solid evidence of the business plan here. It would also enforce the standing of the plan. A few writing skills are needed here to make the concepts and ideas compelling.
This stage is known as mapping scheme because it involves forming the exact order of sections. Also called planning stage. Planning stage is the muscles and flesh. It makes the content rich. Well, the target reader should find solid evidence of the business plan here.
The draft is still rough at this stage as it needs some final touches. The next step is to edit it from top to bottom. Editing gives coherence and a smooth flow to the arguments expressed in the business plan. People write business plans to make a case. Hence it needs winning power. Repeat the main points throughout the document. For more emphasis furnish it with facts and figures. Make sure to use logic. Reasoning backed by information that was stated earlier in the plan can make arguments clearer. Edit the business plan further by paying attention to the smallest details. Fine-tuning the business plan in a detail oriented manner increases the readability of the document. If possible, let a third person review it for further refinement.
People write business plans to make a case. Hence it needs winning power.
A universally accepted and a regular business plan template is as follows:
- Executive Summary: Executive summary is the most important part of a business plan. Ideally it highlights the strengths of the company. This part briefs the reader the competitive advantage of the business. Briefly summarize why you have the best business idea. It is a snapshot statement of the program of activities as a whole. It touches on the company profile and typically runs from 3 to 4 pages in length.
- Company Overview: It should start by providing a brief history of the group ownership. It then goes on to describe the organization of the enterprise. A timeline as to when the business was founded is equally important. Information such as locations and facilities should also be included. Add the names of the key members of the management team. Profiling their backgrounds is an indicator of a well-thought-out business plan too.
- Industry Analysis: This section requires substantial research. It gives an understanding of the external factors of the playing field and how the company responds to them. Explain what the cyclical changes are, profit opportunities, and how the company fits into the industry.
- Market Analysis: The objective of market analysis is to provide a quantitative and qualitative assessment of the market. Such facts as demographics, segmentation, and market need are highly sought out by savvy investors. Market value, size, and regulation shows the investors that the business is lucrative enough.
- Competitive Analysis: Identify the competitors’ strengths and weaknesses. A distinct advantage of the firm over the competition is a prerequisite for a business plan. The unique competitive strategies will set the company apart from others. Discuss here, if any, any barriers to entry and exit into the market.
- Customer Analysis: This is a critical section that defines the characteristics of the target customer. Usually the characteristics are explained through their buying criteria and how the product typically satisfies their needs. Include also an in-depth analysis of the growth of the customer base, their average revenues, and service delivery model.
- Marketing Agenda: Emphasize the unique selling proposition of the business in this section. Along with that the pricing and positioning strategy and distribution plan should also be included. A marketing plan that outlines the steps taken to retain existing customers or gain new customers will add credibility.
- Strategy and Implementation: Insert in this segment a detailed plan of the marketing strategy and its implementation. It typically articulates how the company’s management intends to reach the products to the market. It includes the sales strategy, personnel hire, promotions and advertisement, distribution outlets, pricing, service delivery, guarantee policies and the like. Emphasis would be on past sales and a sales forecast.
- Organization and Management: Highlight who does what and their added value to the company. It is a simple but effective way to portray an organizational chart with a narrative. This section would reassure the investor that the people onboard are more than names on the organizational diagram.
- Financial Plan: Most investors are visuals. So, set up a spreadsheet with the past sales, sales forecast, and expense budget. It is also a good idea to incorporate a cash flow statement, assets, and liabilities. Some investors may require a breakeven analysis and the cost of doing business. A business planning software can be an invaluable help here.
- Appendix: In general, this section holds the entire supporting documents. All that information that was too large to be included in the main body should go in here. Any figures, statistics, charts, graphs and illustrations that augment the main points in the body must be in this section.
3F plan provides a systematic and practical approach to preparing a business plan. It has been proven to bring success to budding entrepreneurs. Bear in mind to also study the target readers. And finally tweak the plan. Stress those areas that would appeal to them. Good luck!
Title Photo Credit: Helloquence
Kickstart Your Start-up by Capitalizing on Weaknesses of Multinationals
Start-ups become fat by converting the weaknesses of multinationals into their strengths
Big firms seem to have it all. Audacious business plans that seem to span a lifetime. Intimidating logos that have withstood the test of time. And brand strategy that tells stories like fairy tales. Moreover, they have been in the business for decades. This has enabled them to amass the expertise necessary to withstand any political upheavals, economic uncertainties, and social changes. These pioneers have managed to go through the experience curve.
However, in recent years, entrepreneurial firms have also sprung up like mushrooms despite some setbacks. More often they set their wheels in motion without much planning or strategy. Although market forces have compelled them to do so for future sustenance. They did not have the political, economic or social clout that the giant behemoths claim. They still managed to become successful companies in their earnest desire to satisfy a market need in their respective fields. How did they do it?
What are the competitive advantages of big firms?
Many large corporations and multinational conglomerates consolidate their production processes to cut costs and to centralize their decision-making structure. The economic and trade policies of several governments make it easier for those companies to do so. It gives them a huge advantage. They are able to cut costs. They are able to borrow from the expertise and resources of the geographical area where they base their production activities. For instance, they take advantage of the cheap labor or tax systems, and sometimes even the weather conditions for certain products. They win the favor of labor unions and local communities in which they reside since they create jobs and stimulate the economy. And they seem to have very cozy and symbiotic relationships with peripheral businesses within the industry.
Another advantage multinational companies have is deep pockets that enable them to produce flashy television advertisements during high-profile international events such as Olympics and in popular venues backed by celebrities. Such marketing gimmicks are unrivaled and smaller firms cannot match them because of the high price advertisers demand. Such advertisements have a wider appeal, and at the end of the day, it’s a numbers game.
The social and business network that large consumer packaged goods (CPG) companies have gained due to being in the business market for a very extended period gives them access for prominent placements on shelves. In the cases of large service firms, this gives them the enviable position to gain access to huge conglomerates through providing consultancy support. If nothing, public perception favors big company brands.
What are the weaknesses of start-ups?
Start-ups on the other hand, by them being in the infancy stage, unfortunately, do not have many of the power and privileges that big businesses have. Mostly people who have either failed in the job market or out of stark economic necessity found a company which implies less financial resources. Often they are at the disposal of friends, families or fools to lend them money to scale their business operations. Although venture capitalists and angel investors have risen in recent years, the brutal bureaucratic procedures involved in getting to pitch in front of such capitalists deter many start-up entrepreneurs to abandon their efforts at a very early stage of the process.
What is then left for them to do, is to start from the grassroots level that entails knocking on the doors of prospective customers. It takes an enormous amount of motivation, ambition, and drive which are rare commodities in this age of instant gratification because the efforts take a long time to yield results, if at all. Sometimes the lukewarm response from the market can take a toll on the individual and can sap the energy level. It can lead to frustration, disenchantment and a lack of self-worth.
Hope – yes we can!
Hope is at hand. Think about the risks involved in consolidated manufacturing enjoyed by many multinational companies. In most cases, the companies have a stake in the real estate of the production system – land, factories, and capital-intensive machinery. They are vulnerable to single currency swings as well as the economic chaos that may ensue after that. Start-up companies who are smart enough outsource their production of goods and services. Any pitfalls then will be borne by the companies who own the production infrastructure. In other words, start-ups get to make hay while the sun shines and can quickly withdraw when times are rough.
Thanks to the time we live in, the Internet has made it possible for start-ups to reach out to an equal number of people using social media and digital marketing in the comfort of their dens or basements that they use to start their businesses. Hence they do not have to resort to the flashy television advertisements.
Online distribution network companies such as Amazon works as a perfect substitute to prominent shelf placement for start-up companies. It has enormous potential for entrepreneurial firms for secure delivery as well as to scale their operations to the magnitude of that of multinationals if done right.
Take a piggy-back ride
Outsourcing the production processes as well as online marketing and distribution can all be done with a fraction of the cost sometimes even free of charge. For example, the success of content marketing relies predominantly on the quality of the content. If one looks around one can find hundreds of tools and tactics that is being made possible in this day and age for a start-up company to grow and make money. So the moral of the story is to take a piggy-back ride on the times we are!
Additionally, in most industries barriers to entry are falling making it irresistible for an entrepreneur. The Internet gives us real-time information about the market thereby making start-ups more attuned to the needs of the market. What all these factors do for a start-up is give them much-needed agility, dexterity, and nimbleness in the decision-making.
Photo: Verne Ho
Dare to be Edgy for Profitable Growth
Companies looking over the competitive landscape and moving away from the arena where their rivals squabble find profitable growth. Reinventing thus a business with bold and visionary thinking comes with huge risks as well as rewards. On the other hand, some companies have a tendency to over-rely on their core business. It can lead them to a blind spot where they miss growth opportunities. Sometimes for success, we need cautious and incremental changes. In other words, an in-between strategy that is neither a disruptive innovation nor a radical transformation.
Alan Lewis and Dan MacKone articulates such a mindset through their “Edge Strategy”. The book by the same name is based on a three-year research of innovation strategies of 585 international brands. It advocates three ways in which businesses can profit by looking for opportunities that lie hiding in plain sight. It involves rethinking the edges of your company that has proven to deliver 15% higher returns.
Accessorize your product
Understanding what your core business is essential for profitable growth. Equally important is discerning what features would augment the product. Alter the elements of a core offering that would appeal to the target market. Stretching the merchandise may appeal to the target market that can lead to revolutionary results. One way is to offer value-added services to your product by way of add-ons and upgrades. Another is to include service options with the core product being offered. Also, price it correctly so that people would be willing to pay for it.
JetBlue was on the brink of collapse a few years ago due to operational failure. They toyed with the idea of mergers, alliances and code shares that are practiced by some international carriers. A thorough analysis helped them realize that their market consisted of value-added travellers. They decided to apply the product edge strategy. The company managed to revive its business and stay in the market. They reduced the fare of the core product drastically and introduced paid accessories and add-ons such as extra legroom options and additional charge for a preferred seat. Passengers were willing to pay for that extra convenience and comfort for a pleasurable air travel. It generated more than $75 million in incremental profit. All because JetBlue accessorized their core product with bells and whistles.
Smoothen the customer journey
Time to time it is imperative for company officials to walk in the customers’ shoes. Their missions differ at every step of their decision-making journey. Look out for these pain points throughout the journey the customer takes in the process right from the awareness of the product until the purchase and even post-purchase. Try to support this trip by alleviating the pain points in an innovative way. Information-sharing and educating them on how to relieve pain is an excellent way to walk them through the voyage.
Greengrocer is a case in point. Over time they have realized that customers are not only looking to buy green vegetables but they also want them washed, cleaned, chopped and even ready to be prepared. The beauty of it is that customers are willing to pay the marginal price in exchange for the convenience it offers. Whole Foods went a few steps further by offering shoppers different food stations such as pizza ovens, salad bars, and home-prepared meals and even appealing seating arrangements that they claim now on an average generates one-fifth of their total revenue. And shoppers never seemed to complain when the mundane weekly grocery purchasing turns to lifestyle family experience. Thus Whole Foods have smoothened the customer’s journey every step of the way in an impressive and innovative manner for profitable growth.
Leverage enterprise resources
Make an inventory of all the business assets. Find new ways to unlock value through putting to use the company’s under-utilized assets or untapped resources so as to create a new revenue stream that would generate more income. Industry pioneers routinely sell their valuable expertise to the outside firms while still staying in business. By exploiting such possessions and using them in different contexts, companies have diversified and have amassed vast sources of revenue.
Amazon rents out its web services, its technological infrastructure, to third parties since the company realized that it would add value to other businesses. By doing so, Amazon built added a sustainable cloud computing business to its core product and enhanced its profitable growth. The competencies it had at its disposal was valuable enough for which they could command a good price. A critical assessment of their asset inventory enabled Amazon to recognize the potential of one of its untapped opportunity, and they capitalized on it. When company resources are being put to use in different context wealth is created and not destroyed. It does not have to be at the expense of disruptive innovation or blue ocean strategy but in tandem with them. And it adds to the bottom line of the company by way of generating additional revenue.
Leverage the periphery
The authors of “Edge Strategy” reckon that pursuing any one or all of the above strategies can lead to a myriad of opportunities for extra sources of income from which companies can choose depending on the profitable growth potential and feasibility of implementation. Think harder about the periphery or the “edges” of existing businesses.
The strategy is not new. However, very too often when thinking about company growth business executives are obsessed about pursuing industry disruption or inventing the wheels that come at a huge cost. Instead, look under your noses, and you will find several opportunities to earn extra income by making incremental changes to the existing businesses. Or they stay too focused on their core offering that they miss out on the changing trends thus rendering their products obsolete and redundant. Adopting an Edge Strategy® not only unearths inherent capabilities to create wealth but can also be rapidly implemented because it is a low-hanging fruit.
Photo: Greg Rakozy
Live video streaming is critical to brand growth in 2016 and it has really taken off this year in part due to the launch of Facebook Live. Live videos are real time video posts on Facebook and they can be a great way to promote and boost your brand. You can use them to communicate brand stories, to enhance relationships and to share your knowledge and expertise.
People love watching video and Facebook Live lets you connect directly with your friends and followers and to get more interactive with a younger demographic.
Right now the easiest way to broadcast on Facebook Live is using your iOS or Android device from your Facebook page, profile, or group you manage. You can also use your desktop but that’s a little more complex.
How To Use Facebook Live Video
To go Live simply login to Facebook, go to your page and click the publish icon as if you were going to publish a post. From there you click on the red video icon. As you complete this process a couple of pop ups will show up asking you to authorize the app to use the camera and microphone on your device. When you are ready to go live then click on the blue go live button!
Getting Ready to Share Your First Facebook Live Stream
There are a few key things to think about first though:
- Promoting your Live event – tell people in advance that you will be going live. You can use your timelines, other social feeds and Facebook events to do this. Give them plenty of time to put it in their schedule.
- Get ready – prepare your outline and presentation in advance so you know what you will be talking about. Facebook live should seem spontaneous and natural, but that doesn’t mean it should be completely unscripted. Set up your location too. Choose a quiet spot with little background traffic.
- Make sure you have a good connection – video takes up a lot of bandwidth.
When to go Live on Facebook
What time you go Live will depend on your audience. Noon till 3pm is the best time to catch people at work and 6-9pm is optimum otherwise. It’s a great idea to coordinate with a popular event (industry conference) and tap into their event too (as long as you have a good connection there!).
After you are finished, your video is published as a post on your timeline so it is available for those who missed it to watch it later. Your video should be at least 10 minutes long. Broadcasts can last up to 90 minutes.
Below there’s a link to our first SMEI Facebook live event by Gregg Frederick, CSE, principal of G3 Development Group. Gregg used Facebook Live to explain how to use this powerful new social media tool to create engagement around both your personal and business brand.
What’s next with live video, YouTube live is now emerging too so make sure that’s part of your brand strategy for 2017.
Watch our first SMEI Facebook Live video on our Facebook feed.
- Starbucks’ social buzz peaks around the pumpkin spice latte craze. Starbucks has become a bit of a case-study example for marketers when it comes to creating social buzz for its products, and in no season is that more evident than fall when it sells the popular pumpkin spice latte drinks.
To measure the hype (and subsequent hate) of the latte, social media analytics company Spredfast crunched a handful of stats in the week leading up to Tuesday when the drink was launched on menus
Read more Starbucks’ Pumpkin Spice Lattes Are Killing It on Instagram
- Looking to use Instagram for your company? You should. Just make sure not to make these 8 mistakes. read more 8 Mistakes Brands Make With Instagram – HubSpot
- The Friday Five: Instagram Zoom, Facebook Page Management, Content Marketing Myths, Reposting UGC & Mobile SEO read more The Friday Five: Instagram Zoom, Facebook Page Management, Content Marketing Myths, Reposting UGC & Mobile SEO
- Instagram killing “photo maps” feature | Think Marketing read more Instagram killing “photo maps” feature | Think Marketing
- “Twitter is stupid and Instagram is Twitter for people who can’t … The success of Instagram is disruptive to marketing strategies, … Why Instagram Matters. read more Why Instagram Matters – The Huffington Post
- I’m going to lie to you and disparage my customers while posting my marketing messages on Instagram. Sounds like a clever marketing plan. Who would do that, right? Well, apparently stupid is alive and well on Instagram … read more Apparently Stupid and Instagram Marketing can be used in the same sentence | Everyone Markets
Plane Makers Make it plain for Market Share
Boeing, the US plane producer, was once the world’s biggest aircraft maker based on its global market share. It has certainly learned that one person’s poison is other person’s meat. In this case, it translates to one company’s failure is another company’s success. Sadly, it is a fail-win situation. Blue ocean strategy teaches us to look for the failures in our competitors to exploit the opportunities. And to create a niche product that would appeal to those customers that have fallen through the cracks. It is one way of making the fierce competition irrelevant. Boeing and Airbus teach us just that. Airbus rose up to the occasion when airliners felt the need for more efficient aircraft. It was a time when Boeing was too caught up in the Dreamliner program.
Boeing going gone
Recently, the U.S partially lifted the economic sanctions in Iran. It enabled the plane maker to reach a deal to sell 100 new planes to Iran Air. However, in between being considered the largest aircraft maker and the Iran Air deal it was on a downhill path. Plane makers were creating a vacuum in the industry. Airbus took advantage of the opportunity and manufactured aircraft to fill the vacuum. Airbus applied the Blue Ocean Strategy from which Sales and Marketing Professionals can learn a few lessons. To put it in context it is worth exploring the rival company, the European plane producer Airbus, and its global market share in comparison to Boeing.
Airbus in business
Europe’s aircraft manufacturer, Airbus, is passionate about aviation and designs the world’s best and efficient aircraft, and is reputed to shape the future of air transportation by regularly capturing half of all commercial airliner orders. In 1995 it became the first plane maker to allow airlines to function without the need for financing a fleet. In the recent decade at an enormous expense, it developed the A380 superjumbo, albeit not yet with enough orders, is another feather in its cap. Airbus entered into the business 50 years after Boeing began its market share domination. It had the confidence and the guts to take Boeing by its horns. What would be interesting is to analyze how it stacks up against its counterpart.
Boeing vs. Airbus
Since the 1990s, the airliner market was a duopoly one with just Boeing and Airbus enjoying the space. However, Boeing’s unassailable lead in the sector of commercial airliners came under threat from Airbus when since 2012 the European firm outpaced it with the number of orders. Boeing’s failures include pricking its pride when it could not manage to stay head to head with Airbus who has been in business for less than half its time. What most companies fail to do is to use its Sales and Marketing force to analyze the competitive landscape on a regular basis either monthly or quarterly. What did Boeing do to reach a situation where Airbus out-competed it using fifth fewer employees? It failed to look beyond the horizon at its immediate competitor.
Boeing’s Dreamliner turns to nightmare
The Dreamliner program that projectedÃƒâ€šÃ‚Â to cost $6 billion and take off in 5 years instead took $32 billion and eight years to complete due to technical failures and supply chain hassles. Boeing was the first commercial plane made of lightweight composite materials. It outsourced the production of its 787 Dreamliner to global suppliers causing mounting costs and delays. Caught up in its execution Boeing’s plans for the rest of its other fleet became. The Dreamliner Programme utilized the entire resources of the company, and that consumed the corporation for a long time. While Boeing had its head deep in the sand like an ostrich, so to speak, it created a perfect space for its rival company based in Europe, Airbus, to jump in and carve a blue ocean strategy to expand its market share.
Blue ocean strategy of Airbus
Airbus adopted blue ocean strategy by taking a lead in the production of fuel-efficient narrow-body jets. This resulted in more orders for its A320 neo planes than its counterpart 737MAX. Boeing’s troubles with the Dreamliner also helped Airbus win more orders of its jet A350. Boeing’s 777X is not due until 2020. This saga is a classic example of how Blue Ocean strategies can be created by carefully observing the gaps in the operations of competitors. Marketing then is a function of a company that finds the crack between the needs of the customers and the products offered in the market and plugging the gaps by introducing innovative solutions thus making the competition irrelevant.
Sales and marketing parallel
Drawing parallels from the Airbus-Boeing case study, Marketing Professionals can better align their market share strategies to fill the gaps in the market created by their competitors through close observance and thorough analysis. Sales revenue can be generated not only by satisfying customer needs but also by stepping in to fill the blanks in the target market. More often than not expansion plans of a rival company can be an opportunity for another company to service the customers left by the side by the expanding company who get carried away in the execution of plans.
If in a duopoly market like that of aircraft manufacturers that is highly regulated blue ocean strategy works one can be forgiven to believe that they can be set up in almost any market if one starts thinking out of the box. It requires an entrepreneurial spirit and innovative mind. Companies should encourage Sales and Marketing Professionals to think beyond or without the box so that their creative juices begin to pump in. Otherwise, it would be another case of Boeing Going Gone where a company that is half its age – Airbus – takes over within a matter of very short period.
To learn more about market share and how to dominate your market, consider the SMEI Certified Marketing Executive program.