I was recently introduced to a young talented web designer / developer during my research into how rapidly people are moving their businesses online as a result of COVID-19 pandemic. James has been the bright kid who had contributed hugely to the success of the agency for which he had worked for years but, due to the high demands in websites, he has decided to start his own business. The problem is, James is a tech guru but hardly a business expert. He soon learns his shortcomings very quickly when he tried to apply for government grants available to startups.
James needs a business plan. Yes, he knows his trade inside out and he even has some clients who have paid upfront, but when you seek outside funding either from a bank, an investor or through the government, you need to articulate your business properly on paper in order to convince the person from whom you seek financial assistance. This is a skill that James lacks. This is a skill that most talented people lack, and I will try and explain to you what you need in a business plan.
The Business Idea
A solid business idea is the foundation for any business plan. You must be very clear about what you’re proposing to bring to the market. How will it bring value to your customers? What makes you different from the competition? In other words, what makes you so special about this offering or why should anybody care about it?
Business & Personal Objectives
What are the business and personal objectives behind your proposed startup? Is it for a better living standard? Is it to work from home in order to spend more time with family? Is it to be financially independent? Or is it just to be your own boss?
In today’s fast economy, you often hear someone start a business, scale it up, sell it, make a ton of money and start another business – these are serial entrepreneurs. You also hear of people starting a business just so they could travel the world. People have different reasons for going into business and no one will judge you for that, but you must know what your objectives are.
To have a fantastic business idea without conducting a market research would be naive. A primary market research will help you identify the scale of your business idea in monetary terms. Who are your potential customers? Where are they located? What their demographics and psychographics? What would they pay for your products? Who are your competitors? How do you intend to bring your products to your customers?
Many businesses fail today, not because they are not profitable, but because they lack cashflow. Cashflow is the lifeline of your business. How much capital do you need in order to start it and to run it? What are your fixed and variable costs?
What are your personal costs like mortgage or rent, car, hospitality, food, medical expenses etc. It may take 2 – 3 months to get your first customer, hence the importance of cashflow. If you don’t have access to funds and there’s a shortfall, you might run into serious trouble and this might threaten the life of your business.
Many talented people have gone into business with the hope that their talents will attract customers to them. This might work for some people who already have a high demand for their products even before such products are ready, but, even with that, you still need to create awareness for your products if you want to reach beyond your immediate family and friends. The most talented people are not usually the most successful in business, but the most marketed people almost always win, and these are the ones that end up hiring the most talented as they grow.
There are many marketing tools out there, but my advice is to find someone who is good at marketing to help you with your marketing plan. You will find life much easier in the long run.
A well-researched and credible business plan is important for any startup. Your local enterprise office will provide you with a business plan template, and a range of training programs that could help you. There’s a caveat: a business plan is what it is – a plan. In real world, things don’t often go exactly as planned, but having a business plan will always remind you why you came into this business in the first place and help you to stay focused.
Owning a business could give you some freedom, but it often comes with a huge price. You may have forget about those regular holidays for the first few years; you may not earn an income for the foreseeable future; you may even lose some close friends as your goals have changed and time is now a currency you cannot afford to waste on things that don’t contribute to your business.
The light at the end of the tunnel is, if you are focused and passionate and become successful in your business, your rewards will go beyond holidays, regular income, quality friendship and a life of independence. You would have created the life you wanted for yourself and nothing can be more rewarding than that.