Starting your own business from scratch can be an exciting and rewarding experience, however it isn’t as easy as some may think it is. Before you begin building your start up, you need to complete some important planning first to work out whether or not your business can survive your competitive industry or whether your business niche is popular enough amongst your future audience. If you’re wanting to start up your very own business, this expert guide will give you the run down on the top key areas that you need to plan first before you even start your new business enterprise. Let’s get started.
Planning 101: Things You Need To Plan First For Your Start Up
1. Research Your Competition
Before you enter the world of business you must first really research and analyse your competition. Analysis of your competition is very important as you’ll need to work on surpassing your competition in order to gain traction in your industry as a leading company for customers to purchase from. When researching your competition here’s some things to consider:
- Research their website and their marketing channels to see what they’re using and which ones are the most successful overall.
- Work out who their customers are and the ways they generate interest from customers to buy their products.
- If possible walk into their brick and mortar premises to see how their customer service is and how they perform as a business unit.
- Check around to see what suppliers they use and whether you can gain better deals with these suppliers, or their supplier’s competitors.
- Investigate their social media channels and see how they conduct themselves on social media with their customers and prospects.
- Analysing your competition is the first step to work out what they’re doing and what you can do better to surpass their position in the market.
2. Analyse Your Potential Customers
If you have a new idea you’re looking to bring to your industry, it’s important that you analyse your potential customers to see whether there’s any demand. A successful business works because there’s a demand for the products or services they provide. When analysing your potential customers, consider the following:
- Leverage social media channels to find out what your customers want and where they hang out the most.
- What are their demographics; age, location, nationality, profession, gender etc?
- Do they share any similar psychographic qualities, such as; concern for the environment, an interest in health and fitness, art, music or other attitudinal characteristics?
- What are their purchasing behaviours?
- What are they looking for in a product or service? Can you exceed their expectations?
Really analysing your potential customers can help to improve your overall ability to plan your business accordingly before you begin building it. You need to know you have potential customers out there with the demand so your business can thrive.
3. Plan Your Marketing Channels
In order for your business to be successful you need to be able to market it effectively to your target audience. You need to decide on which type of marketing channels will be the best options to choose for the best exposure and engagement. This can be done by:
- Researching where your potential customers hang out and socialise the most. Is it social media, in front of the TV, on the road, or listening to the radio etc.
- Work out the goals of using each marketing channel. Is it to gain brand awareness, generate enquiries, build a better reputation etc.
- How much money can you afford to place into your marketing channels?
- What marketing channels are your major competition using?
4. Work Out Your Finances
You’ll need sufficient funds to get your business up and running as well money to see you through an initial slow period while your business gains momentum. Creating a business finance plan is essential to your overall success. When building a business finance plan you need to consider the following areas:
Calculate Setup Costs
Setup costs can come in the form of many different things. These include:
- Equipment and fit-out
- Initial working capital
- Licences and registrations
- Accounting fees
Profit and Loss Forecasts
To work out your profit and loss forecasts you need to:
- Compare potential revenue from sales to the cost of your overall goods that are sold and any fixed costs that are also involved in completing the sale.
Cash Flow Forecast
You need to also be aware of your cash flow when running a business. When planning your cash flow forecasts you need to remember:
- Customers may be slow when it comes to paying you for your services.
- Gaps in payment can leave you vulnerable if you’re not properly prepared.
Balance Sheet Forecasts
Balance sheet forecasts are what you’re hoping to expect after 12 months of operation. This should be based on:
- Your profit and loss forecast results.
- Any purchases you anticipate in your setup costs.
Once you’ve completed your forecasting for the next 12 months, you can then calculate how much in revenue you need to break even. When you’ve worked out your pricing margin, you can then calculate how many sales you would need in order to turn a profit.
Powerful planning before the initial setup of a start-up is crucial to its overall success. By taking the time to make a detailed plan before you begin, you’ll find you’ll have a deeper foundation that you can build upon and direct your company towards a successful and profitable outcome. So are ready to plan for your next start up business?