Is there anything more American than the idea that you can start a business and get rich quick? Unfortunately, the reality often doesn’t live up to expectations. That’s why it’s important to put together a plan — a plan that will help you make the most of your business and invest in the right way.
To get started, simply follow these ten steps:
1. Identify Your Goals And Objectives
Your goals and objectives will form the backbone of your plan and dictate the direction you take. Make sure you’re clear about what you’re aiming for and why you’re doing things; this way you won’t be lost in the details and you’ll be able to keep your eye on the big picture.
For example, you can decide to launch a new product line or expand into a new city. Perhaps you’re looking to expand your customer base or you want to increase your revenue. Whatever your reasons for wanting to grow your business, they will determine the direction you take and the plan you develop.
One of the best things about this step is that it gives you a chance to identify what you don’t know. By brainstorming and listing everything you can think of, you will be able to create a comprehensive plan that addresses all of your concerns. This is especially effective when you’re trying to plan a brand-new business. It’s natural to be a little overwhelmed during this stage and having a plan helps you see the process in a rational and calculated manner.
2. Research The Market For Your Product
Once you’ve determined your goals and objectives, it’s time to dive into the nitty-gritty of your plan. The first step is to research the market for your product or service. Specifically, you will want to find out about the needs of your customers and how you can best serve them. You can do this by taking into account all the factors — including your competitors — that could influence whether or not your product or service is accepted by the masses.
For example, if you’re planning to launch a new food product, you might want to consider what the current trends are in the culinary world. Furthermore, you could study the demographics of your target audience and how best to reach them. Do extensive research on what other companies are doing in the marketplace and make a note of these competitors’ strategies. You can also examine the economic factors that could impact your product or service, such as the cost of raw materials and the price of labor. Make sure to review the international trade law regarding tariffs and quotas. Also, consider the legal and regulatory risks that could arise from the introduction of your product or service. It’s easy to get tangled up in legal and regulatory jargon, but by taking the time to familiarize yourself with the basics, you will be able to put together a compelling argument as to why your product or service is best suited for the marketplace. Furthermore, doing some research into the legal and regulatory risks that exist for your industry can give you a clearer picture of what you’ll need to do to protect your business.
3. Create A Marketing Plan
After you’ve done your research, you can move on to the next step and create a marketing plan. A marketing plan is a roadmap to get your product or service into the hands of your customers. You can use paid ads, such as Google AdWords or Facebook ads, to attract and entice potential customers. Or, you can use the famous PPC (Pay-Per-Click) method to gain free traffic and make potential customers aware of your product or service. (You can also use SEO — Search Engine Optimization — to gain free traffic from the search engines.)
Decide which of these methods you’ll use and how much you’ll spend on each one. You want to choose methods that will engage your audience and have the highest chance of converting potential customers into active patrons. This way you’ll be able to build a loyal following and establish yourself as an authoritative source in your industry.
4. Craft A Business Strategy
After you’ve established a marketing plan, it’s time to craft a business strategy. A business strategy is a set of principles you’ll use to guide your decisions and actions as you grow your business. It should be a systematic approach to your company’s mission, goals, and objectives. Every business is different, which is why you need to tailor your strategy to fit your own unique situation.
For example, if you’re the owner or operator of a small business looking to expand into a new town, you might want to consider using what’s known as the PAS (Plant, Acquire, and Scale) strategy. The PAS strategy is often used by fast-growing technology companies that need to expand internationally. (You can also use this strategy when you’re growing your business in a new market area.)
With the PAS strategy, you will start by setting up shop in a new city or town. Once you’ve acquired a decent size of audience — whether that’s local or nationwide — you can expand your reach by manufacturing or sourcing your product and launching it into other cities or towns. You’re not restricted by location with this strategy (most businesses are). What’s more, you can use the technology you already have in place to help you reach more people and grow your business.
The next step is to craft a sales plan. A sales plan is similar to a marketing plan, but it’s designed to generate revenue. This plan will dictate how you’ll go about reaching your customers and what you’ll do once you’ve reached them. In theory, this step is somewhat interchangeable with the previous step, although a little more detailed planning is required for the sales plan. For instance, if you’re using PPC to gain free traffic, you’ll need to set a daily budget and determine how much you’re willing to spend per day. (You can also use SEO to gain free traffic, but in this case, you’ll need to set a long-term SEO strategy and be patient.)
5. Develop Financials
After you’ve set your business strategy in motion, it’s time to develop financials. Financials are a little different from the other steps because they require a bit more detail and a dash of creativity. Specifically, you’ll want to develop cash flow projections, balance sheets, and income statements. (You can find a lot of help with these financial tasks in books about personal finance or small business administration.)
A cash flow projection is a fancy way of saying that you’re making a guess about how much money you’ll make and how much you’ll need. The exact amount will vary depending on your own personal circumstances, but generally speaking, you can expect to make more than you spend. (You can use the money you’ve made to improve your business or take a vacation.)
A balance sheet is a formal statement of a businesses’ financial position. It’s used to demonstrate the essential elements of a business’s financial condition. Essentially, a balance sheet shows you where your company’s money comes from and where it goes. In simplified terms, a balance sheet consists of two parts: assets and liabilities. (You can find a full explanation of a balance sheet in most business journals or online databases.)
An income statement deals with managing finances on a day-to-day basis. An income statement breaks down your company’s income and expenses, comparing the two for a period of time. The first part of an income statement is often referred to as the Statement of Revenue, and the second part is known as the Statement of Expenses. (In some cases, the income and expense items in the statement are distinguished by capitalization. The capitalized items represent recurring or predictable expenses, while the non-capitalized items represent one-time or unpredictable expenses.)
For example, if you’ve decided to use PPC to gain free traffic to your website, your income statement would look something like this:
“Online marketing and social media costs $5,000 per month. (This is the income.)
“SEO costs $1,200 per month, along with credit cards and other costs associated with running a website. (These are the expenses.)
Thus, you can see that you’ve made $4,800 per month, which is more than enough to cover your monthly expenses.