SO YOU WANT TO START A BUSINESS?
Although planning is common in the start-up phase, it is also a valuable exercise during the operating and growth phase of the business.
This involves asking yourself:
1. Why are you in business (your 'why'?). What is your vision?
2. What are your strategic objectives?
3. How will you structure your business? Sole trader, partnership, company or trust?
4. What are the regulatory requirements associated with a business like yours in that industry and country?
5. What are the latest trends in your industry?
6. Who are your main competitors? What competitive advantage do you have over them?
7. Who are your target customers? Consider both demographic (e.g. age, gender, income etc) and psychographic (e.g. values, attitude, lifestyle etc) factors. Is the overall market big enough for you to enter?
8. What does your day-to-day staff organisational structure look like? Consider both functional and administrative reporting lines.
9. How will you operate your business? Consider location, supplies and distribution.
10. Have you got a good accounting system in place to manage cash flow and help you review your real-time financial metrics and other information? Will the system produce accurate and reliable books, records and management reports? Have you got a budget in place? Do you have enough capital?
11. How can you articulate and formalise steps 1 to 10 into a business plan? .
A 'Strengths, Weaknesses, Opportunities & Weaknesses' (SWOT) analysis exercise can help in forming the basis for your business plan. Strengths and weaknesses relate to internal factors while Opportunities and Threats relate to external. .
The benefits of having a business plan include:
1. Provide greater control of your business
2. Can assist to secure external funding
3. Understanding and evaluating SWOT to assist with business priorities .
Some common mistakes with business planning include:
1. Underestimating the time and cost involved for certain activities
2. Pricing too low
3. Overly optimistic about demand and volume
4. Not taking into account worst case scenario
5. Excluding and not planning for regulatory obligations