Thats Right
Newbie
- Nov 3, 2016
- 4
- 2
For anyone, that may need some help drafting up their own business plan.
I have decided to share my own step by step guide,
which I drafted up myself to help me structure my own
( i still did not get around drafting my own business plan lol) however
I am still sharing, GoodLuck to all that finds this helpfull.
Note: I copied and pasted from word document exactly how I drafted the template/guide
Days of research and of course hours of typing was put into this. (Please feel free to correct thread where I may be wrong,) Each one Educate Each one.
12 key to consider
1) Executive summary
ü A summary of a business plan which is designed to give my/your investors and clients a flavour of what the business is about.
ü a typical business plan is 2-3 pages long To explain my/your product or service to seek venture capital (VC)
ü With this you help the reader to understand what im/you are offering and a little bit
About my/your vision of the product/service and business
A good executive summary should consist of a.
· Header:
Should mention company’s name, address, website url, contact
Try your best to not use your home address for your business
It can appear to be unprofessional, if needed get a po box from local post office
And use address for business.
· Management section:
Included (team size, names and qualification) of your team members
(Convince investors) Try your best to prove to your investors that this is a qualified and successful team
(Mention required finances) Include the amount of financing you sought and how careful you and your team are about funding.
(Summarize managing and spending money), remember who your investors are and try to appeal to the investors
· Business description
Company background
List of possible challenges and suggested solutions
Products and/or services you offer
And what makes your business different for competitors.
(Business description)
Work really hard on your business section. This section must show confidence and must be convincing.
Must be exceptionally good, short, effective, and precise
If you were asked to explain your business plan in 30 second and it is not clear then you are not sure or confident about your own plan.
Be clear and precise about your when doing your business description this is what the investors are looking for
· Marketing section
(Is what investors love) investors want to know your market and promotion plan
Show that you understand your market size then discuss your competitors briefly
(NEVER think or mention in the business plan that you do not have any competition) Never say that your business has no competition there will always be competition if it is not now then in the future.
Show the investors that you can handle the challenge.
How will you make money?
Describe what channel that will be used to promote your business, internet marketing? Distributors? Other methods? You can think off
Use market research and project monetary numbers and any other data to show your business has a successful future, if you follow this guide line mentioned correctly then your venture capital is just waiting for you.
· Market
· Products
· Industries
· Customers
· Venders
· Competitors
2) Product or service i want to offer
ü This is the section to clearly be precise about your product or service. Clearly mention you’re offering, are you designing a website a smart phone app or a physical store.
ü Ask yourself this why should this company exist? Does it provide entertainment?
Does it provide a needed of service? Does it solve an existing problem?
ü What are the benefits of this company? Is there a need for your company to exist?
ü In your business plan help the reading understand why your business needs to exist.
Product strategy tips
Your product or service must achieve two things:
1) Sufficient usefulness – no matter which are your area your business belongs to service, entertainment, or education, if you offer something of no value then no one will want it. So be critical in asking yourself and your executive team is there a sufficient usefulness for this company.
2) Sufficient quality – Usefulness alone is not enough the product or service must accomplish what its meant to do with efficient quality, quality control is extremely
Important if you want your business to compete in the market, the better the quality the more you can charge for it and be able to charge a good amount for what you offer will generate revenue for your company.
Product and Service Strategy – Making money (optional section)
Because very few company makes profit at the beginning
But a successful companies keeps getting better and better
A well planned business earns a greater of profit faster of course
At the beginning the focus of the executive team should be quality
And that will lead to currency.
Products and Services – Further considerations
When thinking of planning your company Consider how this product or service is necessary to your potential customers.
You must be able to explain why your product and service should exist in the world
And how much value it really provides to your target users.
Not having a good answer to this is a sign that your product or service does not have
Much demand.
If you do have an answer to this question it must include why? how? And how much
It is helpful to your target user.
Understanding who your target customers are and their behavioural pattern is a must, if you do not understand your target user it makes it harder to build a great product for that market, this will also cause you difficulty when you are trying to advertise to your targeted customers.
3) Start-up stage
Are you in the in the idea stage, have you started a prototype or have you already made some revenue in a team. Do not get too specific here, but help the reader understand where you are in the process of building your company.
It is okay to be in any stage, even in the planning stage. Some of the biggest
Companies in the world today were in planning stages before. The purpose of this section is to give the readers context and perspective.
Here are some important questions to consider when evaluating a concept company or a company idea.
1) What is the product and who needs it?
2) Who are the target customers and how are they going to use the product or service?
3) Can the target customers easily be marketed to?
4) How can you make money from this business? Is it a viable business model?
5) Do you as the founder of this business add any competitive advance to the business? Expertise or connection etc.
6) Is the product or service necessary? Can you raise investment funds if needed?
7) Is the target market big enough to satisfy the investors?
(The goal is to gain deep understanding of your company and strategy
Foresight it is the key during planning phase = 100% total success!
Validating the idea (VTI)
Opinions: talk to many people and get their opinion about the business idea.
Reach out: reach out to people who work in the industry, or even competitors
But do not give away too much information.
Research: market, industry projection and competitor research
Trail run: try out your business idea at a small level.
For example if you have a physical product, try to sell it to small stores
Before you have tens and thousands manufactured.
This will give you real world sales metric on which you can base due to decisions.
Minimum viable products – (MVP)
This is a strategy for avoiding the development of products that customers do not want. The idea is to rapidly build a minimum set of features that is enough to deploy the product and test key assumptions about customer’s interactions with the product.
Basically bring the product or service to the market sooner than later, while focusing on the minimum viable part.
If user love your product or service, that will be perfect
If users don’t like your product or service, you can find out why and then start
Improving the product or service, until they like it better
Accepted MVP means investors are more likely to invest in your company.
4) Market size
Understand the addressable market and its size
Show due diligence
Four market size - marketing
· Cost of marketing
· Scale of people you want to reach
· Precision of targeting – meaning how accurate you will reach your target market
· Conversation
Marketing channel common ways, not all work for every product or service, so you have to thing which one will work best for your specific product or service.
· Social recommendation
· Public relations and blog
· Easily discoverable
· Paid advertisements
· Direct sales approach
· Users from a bigger platforms, sites or companies
5) What is my Target market
My target audience
· Students
· Creative people
· Craftsman
· Graduates
· Middle-aged
· Working class
· Designers
· Kids
Try to understand who the best target users will be makes it easier and cheaper to reach them with targeted advertising and outreach.
It also makes it simple to create a product that better fits their needs
And is used in a manner that is most convenient to them, it also help you to better
Understand you market size which enables you to make a more accurate financial estimate.
Targeting a specific demographic is not limiting as people may thing, this actually focus your marketing efforts and optimise your product or service.
You can make your target bigger as you expand your business by adding more Demographics.
6) How would i market to target users?
There are many way to market a product or service
Research a marketing strategy that is best fit for your product or service
Marketing is the lifeline of your business to get more customers
Go beyond Flyers, business cards, Facebook and twitter
10 ways to get press coverage for your business
1) Get press with help a reporter out (HARO)
2) Create a press release and send to publications using (PRWEB)
3) Use your connections ( people who may know journalist)
4) Make friends with journalists and bloggers ( build relationship with them) social media to find them twitter
5) Hire an agency
6) Get press from blogs (reach out to bloggers in your niche)
7) Get PR with podcasts and radio shows
8) Get PR by guest blogging
9) Stand out and be extraordinary
10) Speak at events ( for immediate exposure)
7) Monetization (most important)
Every business needs customers to bring in revenue
Business model
The entire score of the business operations of your business from marketing to revenue to creating and providing the product or service
Type of revenue models
1) Best fit for your company
2) Can sustain your company
Ad revenue model example
Monetize at low rate – which is not the best
Forces your company to go big before it can
Scaling a company too fast can be damaging.
Cost per thousand (CPM) for ad revenue model is $10/£7 on average
This means site owners only earn a penny which is very terrible
Not to mention how many thousand page view your site will need to generate in order to gain revenue to pay yourself and employees a salary, The ad revenue model is one of the easies model to implement , but al so the lease attractive revenue model, Due to its poor earning potential.
Transactional revenue model earns more revenue for a smaller target market
Subscription model makes smaller amounts but at a repeating time interval
Note: The more effective your business model is, it makes it easier to keep your company in profits.
If you have a weak business model it can definitely damage your business
Monetizing –Timing structure of revenue
Small companies upfront cost (Rent, Licences, Lawyers, etc.) Risk involved examples (restaurant, real estate, Physical store.)
Creating conference – Pay upfront and earn too low risk (use money to pay upfront cost)
Subscription model – Predictable revenue
Selling goods and service to other companies
Long wait time to get paid.
How many revenue streams for a business?
A perfect one main revenue stream is easier because you can put most of your plans in action and focus to make the best use of it, even though to put all of your eggs in one basket is not the best option, it is always good to analyse/watch what will happen in the future.
For a young company going after too many revenue streams at one time can be dangerous because it can confuse and defocus effort and direction away from company, this is not to say you should not have multiple revenue streams
But do make you identify your main revenue stream.
Not every business has a business model
For many reasons, for example
Focusing on developing a great products
8) Economics over view
Never start a business without really thinking through this section
Upfront Costs
1) Before business open, what are your upfront costs?
· Leasing a facility
· Remodelling
· Buying equipment
· Buying liability and insurance
· Hiring and training staff
· Getting permits and licensees
· Legal costs
· Website
· Management
2) After the business opens, what are your on-going costs?
· Salary
· Equipment replacement
· Maintenance
· Legal fees
· Electric bills
· Insurance payments
· Rent
· Marketing cost
· Extra expenses
· Taxes
This list goes on not to worry if you plan for them then you will be ready to meet the challenge.
3) Unit economics
Example – Gym
Fee £50/ month or £50 Activation fee – on average a user remain a member for 12 months
Cost to open £100,000 on-going cost £50,000
To break even you need 1000 registered or 1000 new registrations monthly
There will be a lot to consider, many people will want to work out outside during summer which will lower your user.
4) Conclusion and summing up
Physical constraints can’t grow after certain numbers of users were reached
People may not want to be in an over crowed gym, you will have to spend more money to open a new gym.
9) Current and future team
10)
Give a background and discuss the team’s current and potential size.
Bonus points are gain to discuss how big you want to grow.
11) My competition (who will i compete against in the market)
It is important to understand and note who are the other players are in your space
They are your competitors.
Respect them, understand them, and learn from them.
Learn from their success and shortcomings, where ever they fail maybe an opportunity for your business to pick up and differentiate from the competition.
You do not need to be better but you need to understand how different you are from them, you also need to have strategy to compete with moving forward.
12) Investors & funding options
Funding from friends and family
· Simplest way to raise money even though it’s not the best of idea to do business with close family members and friends
Donations
· You can get Crowd funding from, Kickstarter.com, indiegogo.com, gofundme.com, leading crowd funding platform.
Loans
· Banks only lend money to companies already in business
· So does non-bank loans
· Micro-lending site- prosper.com gives loans to businesses in early stage
· Funding your business with a loan is almost not a good idea for.
Investments
· Investors look for big markets, proven team and traction
· Some only invests in niches
· Getting an investor is difficult- only top 0.5% companies get it.
· Angellist.co- List of investors and where they invest
Alternative
· Simplify your idea to require less money
· Market to get clients and grow your revenue
Grants
· Government and non-Government grants available
· Not enough grants exist
· Prefers non-profit organization
· Long wait time
· Gov.co.uk for more on grants and guide lines
Expectations
· Most companies never raise money, get loans or grants
· Fundraising risks time and resources
Hold off funding
· Spend the effort on quality, marketing, sales and other tasks
· After growth, funding will come easily
Less money
· Adopt a cheaper strategy
· Example- instead of a restaurant, start with a food cart or truck
Own revenue (self-funding)
· Best way to fund your company
Job
· Your own revenue, the best way of raising money
12) Business plan goal
When you are raising money there should be some reasonable goal in mind
• Revenue milestones
• Profit or number of customers
• Get the product out in market
• Buying equipment
• Company growth to raise money
Calculate the amount of money you need to reach your goal
How much you needs?
What is the goal of my business plan?
am i raising money?
am i hiring employee's?
: State in my business plan what it is i am seeking.
I have decided to share my own step by step guide,
which I drafted up myself to help me structure my own
( i still did not get around drafting my own business plan lol) however
I am still sharing, GoodLuck to all that finds this helpfull.
Note: I copied and pasted from word document exactly how I drafted the template/guide
Days of research and of course hours of typing was put into this. (Please feel free to correct thread where I may be wrong,) Each one Educate Each one.
12 key to consider
1) Executive summary
ü A summary of a business plan which is designed to give my/your investors and clients a flavour of what the business is about.
ü a typical business plan is 2-3 pages long To explain my/your product or service to seek venture capital (VC)
ü With this you help the reader to understand what im/you are offering and a little bit
About my/your vision of the product/service and business
A good executive summary should consist of a.
· Header:
Should mention company’s name, address, website url, contact
Try your best to not use your home address for your business
It can appear to be unprofessional, if needed get a po box from local post office
And use address for business.
· Management section:
Included (team size, names and qualification) of your team members
(Convince investors) Try your best to prove to your investors that this is a qualified and successful team
(Mention required finances) Include the amount of financing you sought and how careful you and your team are about funding.
(Summarize managing and spending money), remember who your investors are and try to appeal to the investors
· Business description
Company background
List of possible challenges and suggested solutions
Products and/or services you offer
And what makes your business different for competitors.
(Business description)
Work really hard on your business section. This section must show confidence and must be convincing.
Must be exceptionally good, short, effective, and precise
If you were asked to explain your business plan in 30 second and it is not clear then you are not sure or confident about your own plan.
Be clear and precise about your when doing your business description this is what the investors are looking for
· Marketing section
(Is what investors love) investors want to know your market and promotion plan
Show that you understand your market size then discuss your competitors briefly
(NEVER think or mention in the business plan that you do not have any competition) Never say that your business has no competition there will always be competition if it is not now then in the future.
Show the investors that you can handle the challenge.
How will you make money?
Describe what channel that will be used to promote your business, internet marketing? Distributors? Other methods? You can think off
Use market research and project monetary numbers and any other data to show your business has a successful future, if you follow this guide line mentioned correctly then your venture capital is just waiting for you.
· Market
· Products
· Industries
· Customers
· Venders
· Competitors
2) Product or service i want to offer
ü This is the section to clearly be precise about your product or service. Clearly mention you’re offering, are you designing a website a smart phone app or a physical store.
ü Ask yourself this why should this company exist? Does it provide entertainment?
Does it provide a needed of service? Does it solve an existing problem?
ü What are the benefits of this company? Is there a need for your company to exist?
ü In your business plan help the reading understand why your business needs to exist.
Product strategy tips
Your product or service must achieve two things:
1) Sufficient usefulness – no matter which are your area your business belongs to service, entertainment, or education, if you offer something of no value then no one will want it. So be critical in asking yourself and your executive team is there a sufficient usefulness for this company.
2) Sufficient quality – Usefulness alone is not enough the product or service must accomplish what its meant to do with efficient quality, quality control is extremely
Important if you want your business to compete in the market, the better the quality the more you can charge for it and be able to charge a good amount for what you offer will generate revenue for your company.
Product and Service Strategy – Making money (optional section)
Because very few company makes profit at the beginning
But a successful companies keeps getting better and better
A well planned business earns a greater of profit faster of course
At the beginning the focus of the executive team should be quality
And that will lead to currency.
Products and Services – Further considerations
When thinking of planning your company Consider how this product or service is necessary to your potential customers.
You must be able to explain why your product and service should exist in the world
And how much value it really provides to your target users.
Not having a good answer to this is a sign that your product or service does not have
Much demand.
If you do have an answer to this question it must include why? how? And how much
It is helpful to your target user.
Understanding who your target customers are and their behavioural pattern is a must, if you do not understand your target user it makes it harder to build a great product for that market, this will also cause you difficulty when you are trying to advertise to your targeted customers.
3) Start-up stage
Are you in the in the idea stage, have you started a prototype or have you already made some revenue in a team. Do not get too specific here, but help the reader understand where you are in the process of building your company.
It is okay to be in any stage, even in the planning stage. Some of the biggest
Companies in the world today were in planning stages before. The purpose of this section is to give the readers context and perspective.
Here are some important questions to consider when evaluating a concept company or a company idea.
1) What is the product and who needs it?
2) Who are the target customers and how are they going to use the product or service?
3) Can the target customers easily be marketed to?
4) How can you make money from this business? Is it a viable business model?
5) Do you as the founder of this business add any competitive advance to the business? Expertise or connection etc.
6) Is the product or service necessary? Can you raise investment funds if needed?
7) Is the target market big enough to satisfy the investors?
(The goal is to gain deep understanding of your company and strategy
Foresight it is the key during planning phase = 100% total success!
Validating the idea (VTI)
Opinions: talk to many people and get their opinion about the business idea.
Reach out: reach out to people who work in the industry, or even competitors
But do not give away too much information.
Research: market, industry projection and competitor research
Trail run: try out your business idea at a small level.
For example if you have a physical product, try to sell it to small stores
Before you have tens and thousands manufactured.
This will give you real world sales metric on which you can base due to decisions.
Minimum viable products – (MVP)
This is a strategy for avoiding the development of products that customers do not want. The idea is to rapidly build a minimum set of features that is enough to deploy the product and test key assumptions about customer’s interactions with the product.
Basically bring the product or service to the market sooner than later, while focusing on the minimum viable part.
If user love your product or service, that will be perfect
If users don’t like your product or service, you can find out why and then start
Improving the product or service, until they like it better
Accepted MVP means investors are more likely to invest in your company.
4) Market size
Understand the addressable market and its size
Show due diligence
Four market size - marketing
· Cost of marketing
· Scale of people you want to reach
· Precision of targeting – meaning how accurate you will reach your target market
· Conversation
Marketing channel common ways, not all work for every product or service, so you have to thing which one will work best for your specific product or service.
· Social recommendation
· Public relations and blog
· Easily discoverable
· Paid advertisements
· Direct sales approach
· Users from a bigger platforms, sites or companies
5) What is my Target market
My target audience
· Students
· Creative people
· Craftsman
· Graduates
· Middle-aged
· Working class
· Designers
· Kids
Try to understand who the best target users will be makes it easier and cheaper to reach them with targeted advertising and outreach.
It also makes it simple to create a product that better fits their needs
And is used in a manner that is most convenient to them, it also help you to better
Understand you market size which enables you to make a more accurate financial estimate.
Targeting a specific demographic is not limiting as people may thing, this actually focus your marketing efforts and optimise your product or service.
You can make your target bigger as you expand your business by adding more Demographics.
6) How would i market to target users?
There are many way to market a product or service
Research a marketing strategy that is best fit for your product or service
Marketing is the lifeline of your business to get more customers
Go beyond Flyers, business cards, Facebook and twitter
10 ways to get press coverage for your business
1) Get press with help a reporter out (HARO)
2) Create a press release and send to publications using (PRWEB)
3) Use your connections ( people who may know journalist)
4) Make friends with journalists and bloggers ( build relationship with them) social media to find them twitter
5) Hire an agency
6) Get press from blogs (reach out to bloggers in your niche)
7) Get PR with podcasts and radio shows
8) Get PR by guest blogging
9) Stand out and be extraordinary
10) Speak at events ( for immediate exposure)
7) Monetization (most important)
Every business needs customers to bring in revenue
Business model
The entire score of the business operations of your business from marketing to revenue to creating and providing the product or service
Type of revenue models
1) Best fit for your company
2) Can sustain your company
Ad revenue model example
Monetize at low rate – which is not the best
Forces your company to go big before it can
Scaling a company too fast can be damaging.
Cost per thousand (CPM) for ad revenue model is $10/£7 on average
This means site owners only earn a penny which is very terrible
Not to mention how many thousand page view your site will need to generate in order to gain revenue to pay yourself and employees a salary, The ad revenue model is one of the easies model to implement , but al so the lease attractive revenue model, Due to its poor earning potential.
Transactional revenue model earns more revenue for a smaller target market
Subscription model makes smaller amounts but at a repeating time interval
Note: The more effective your business model is, it makes it easier to keep your company in profits.
If you have a weak business model it can definitely damage your business
Monetizing –Timing structure of revenue
Small companies upfront cost (Rent, Licences, Lawyers, etc.) Risk involved examples (restaurant, real estate, Physical store.)
Creating conference – Pay upfront and earn too low risk (use money to pay upfront cost)
Subscription model – Predictable revenue
Selling goods and service to other companies
Long wait time to get paid.
How many revenue streams for a business?
A perfect one main revenue stream is easier because you can put most of your plans in action and focus to make the best use of it, even though to put all of your eggs in one basket is not the best option, it is always good to analyse/watch what will happen in the future.
For a young company going after too many revenue streams at one time can be dangerous because it can confuse and defocus effort and direction away from company, this is not to say you should not have multiple revenue streams
But do make you identify your main revenue stream.
Not every business has a business model
For many reasons, for example
Focusing on developing a great products
8) Economics over view
Never start a business without really thinking through this section
Upfront Costs
1) Before business open, what are your upfront costs?
· Leasing a facility
· Remodelling
· Buying equipment
· Buying liability and insurance
· Hiring and training staff
· Getting permits and licensees
· Legal costs
· Website
· Management
2) After the business opens, what are your on-going costs?
· Salary
· Equipment replacement
· Maintenance
· Legal fees
· Electric bills
· Insurance payments
· Rent
· Marketing cost
· Extra expenses
· Taxes
This list goes on not to worry if you plan for them then you will be ready to meet the challenge.
3) Unit economics
Example – Gym
Fee £50/ month or £50 Activation fee – on average a user remain a member for 12 months
Cost to open £100,000 on-going cost £50,000
To break even you need 1000 registered or 1000 new registrations monthly
There will be a lot to consider, many people will want to work out outside during summer which will lower your user.
4) Conclusion and summing up
Physical constraints can’t grow after certain numbers of users were reached
People may not want to be in an over crowed gym, you will have to spend more money to open a new gym.
9) Current and future team
10)
Give a background and discuss the team’s current and potential size.
Bonus points are gain to discuss how big you want to grow.
11) My competition (who will i compete against in the market)
It is important to understand and note who are the other players are in your space
They are your competitors.
Respect them, understand them, and learn from them.
Learn from their success and shortcomings, where ever they fail maybe an opportunity for your business to pick up and differentiate from the competition.
You do not need to be better but you need to understand how different you are from them, you also need to have strategy to compete with moving forward.
12) Investors & funding options
Funding from friends and family
· Simplest way to raise money even though it’s not the best of idea to do business with close family members and friends
Donations
· You can get Crowd funding from, Kickstarter.com, indiegogo.com, gofundme.com, leading crowd funding platform.
Loans
· Banks only lend money to companies already in business
· So does non-bank loans
· Micro-lending site- prosper.com gives loans to businesses in early stage
· Funding your business with a loan is almost not a good idea for.
Investments
· Investors look for big markets, proven team and traction
· Some only invests in niches
· Getting an investor is difficult- only top 0.5% companies get it.
· Angellist.co- List of investors and where they invest
Alternative
· Simplify your idea to require less money
· Market to get clients and grow your revenue
Grants
· Government and non-Government grants available
· Not enough grants exist
· Prefers non-profit organization
· Long wait time
· Gov.co.uk for more on grants and guide lines
Expectations
· Most companies never raise money, get loans or grants
· Fundraising risks time and resources
Hold off funding
· Spend the effort on quality, marketing, sales and other tasks
· After growth, funding will come easily
Less money
· Adopt a cheaper strategy
· Example- instead of a restaurant, start with a food cart or truck
Own revenue (self-funding)
· Best way to fund your company
Job
· Your own revenue, the best way of raising money
12) Business plan goal
When you are raising money there should be some reasonable goal in mind
• Revenue milestones
• Profit or number of customers
• Get the product out in market
• Buying equipment
• Company growth to raise money
Calculate the amount of money you need to reach your goal
How much you needs?
What is the goal of my business plan?
am i raising money?
am i hiring employee's?
: State in my business plan what it is i am seeking.
