Crafting A Business Plan For Your Startup With Carleen Greenidge
7-Step Guide for a Serial Entrepreneur
Preparing a business plan may be the difference between your startup’s failure and success. According to the Harvard Business Review, entrepreneurs that write formal plans are 16% more likely to achieve viability than their otherwise identical non-planning counterparts. Essentially, the planning process helps entrepreneurs understand what decisions need to be made, what resources are required, and allows them to have more realistic expectations of their venture. Having a well-thought-out plan also provides founders with a better chance of raising capital, as it suggests to investors that they are serious about their business and willing to work hard. Additionally, owners can share their plans with trusted family members, friends, or mentors, who can provide them with valuable feedback. Carleen Greenidge is a successful Logistics Entrepreneur based in Cresco, PA, with more than 30 years of experience in the logistics industry. Greenidge outlines several topics that all business plans need to launch a flourishing startup.
1. State your company’s mission
Every startup needs a powerful mission statement that explains what they aim to achieve by existing. In essence, a mission statement is a summary of what your company does for its customers, employees, and stakeholders. “If you want to know if your mission statement is unique enough, ask yourself if your competitors could get away with using the same statement,” says Greenidge. Ultimately, if customers are unable to differentiate your brand offerings from competitors, your company will have a tough time surviving the marketplace. Finally, it is not uncommon for business owners to lose sight of what is important, so referring to your company’s mission statement often can help guide important decision-making.
2. Complete a market analysis
Once you have determined your company’s mission, the next logical step is testing whether or not your idea is feasible. A market analysis forces you to research the size of your potential customer base in both volume and value. This type of analysis will determine if your market is large enough to build a sustainable business and help you learn about your prospective customers. To gather relevant information consider Internet searches, industry papers, financial reports, news outlets, or connecting with experts in your field. “A detailed investigation also gives you insight into your competition and how they have positioned themselves in the market,” says Greenidge. The idea is to be able to identify your competitors’ weaknesses and use this to your advantage.
3. Analyze your competitors
If you plan on replicating what others in the market are already doing, then brace yourself for disappointment. “Selling the same products as your competition, will only lead to a price war,” says Greenidge. When the market is saturated, retailers will react by slashing their prices in an attempt to increase their market share. Instead, focus on a differentiation strategy that adds value for customers. Several benefits come with developing a unique product. For instance, you will be able to price your products higher because there are no perceived substitutes. Additionally, a successful differentiation strategy can also garner brand loyalty as long as you can deliver the quality or perceived value that made them choose your product in the first place.
4. Describe your products and services
Outstanding products and services are key to a successful business venture. There are several questions you need to consider when creating your product portfolio. For instance, will your product or service meet customers’ specifications? Does your design meet the resource and manufacturing requirements? And are you clear about what you hope to accomplish with your new product or service? In general, you want to articulate how your product(s) are going to help customers solve a problem and the inputs you need to develop your offering. “If you are unable to state how your particular product benefits consumers, then it is probably not a good idea,” says Greenidge.
5. Assess your startup costs
Investors want to know if your business has moneymaking potential. Thus, no business plan is complete without a financial forecast. First, you want to estimate your startup costs, which include one-off payments and on-going expenses. For instance, unique expenses might include permits and licenses, incorporation fees, logo design, a company website, signage, or down payments on a rental property. In contrast, continuous expenses will involve paying rent, taxes, payroll, legal services, insurance, utilities, and marketing costs. Ideally, you want to come up with a near-accurate estimate of how much money you will need from investors. For obvious reasons, outside investors will not want to spend a penny more than required to get the business up and running. Furthermore, investors will want to summarize your financials using projected financial statements, monthly cash flows, balance sheets, and annual cash flow statements.
6. Determine your management and operational structure
Your business plan should also identify the organizational structure of your business. If you are launching a small company with just a few business partners, then this should not be too tough. However, if you intend on scaling the business quickly, it is better to have your organization structure determined sooner rather than later. Your organizational hierarchy should depict who reports to whom, so it is evident who is in charge of each particular department. Finally, “Do not put too many layers of management into the mix, or important information will get lost between levels,” says Greenidge.
7. Outline your marketing plan
Entrepreneurs should be thinking about their marketing strategy as they develop their product or service. Whether you have a marketing budget of $500 or $50,000, you want to make sure you get the most out of your marketing dollars. Choosing the right marketing channels can help you get the return on investment you desire. Greenidge suggests Facebook advertising to help your business target thousands of potential customers each day. In addition to being active on social media, Greenidge recommends building an email subscriber list, developing customer loyalty programs, optimizing your website, asking for referrals, and emphasizing transparency with your clients. The most successful marketers use various tactics to increase their success, as opposed to putting all their eggs in one basket.
While the thought of preparing a business plan may sound overwhelming, it does not need to be. The purpose of a business plan is not to fine-tune your writing skills, but to get you thinking about the important aspects of your business. When you have a great idea, it is normal to want to jump right in without doing the proper research. However, using Greenidge’s simple guideline above, you can be more organized and set yourself up for success.