Andrew Light gives a list of tips for any new venture to keep in mind when developing a new business plan. When creating a business plan, it is important to know exactly what you are trying to achieve. Typically, businesses lack focus or become too ambitious so rather than attempting to do everything yourself and be all things to all people, the best course of action is to focus on the niche you want to target and determine if it’s big enough to sustain your venture.
Identify Your Value Proposition
Before you can understand your own business, you need to understand the market. Who are the other ‘players’, and what are they doing? Once you’ve plotted where other players are, you have a better chance of understanding what your focus should be in order to compete effectively. This might be as simple as knowing what you don’t want to do.
Once you have an idea of what the market looks like, you can decide how to position yourself. How will your business fit into the competitive landscape? What do you want your business’s market segment to be – value? Quality? What are your ‘core values,’ and how will they match your business model? In general, the further from the ‘centre’ of the market you are and the more defined your plan is, the better your value proposition is likely to be.
In any case, the fundamental aspects of a good value proposition are that it is measurable (how do you know how big your market is?), sizable (is it big enough?), applicable (can you reach the market in a cost-effective way?), and desirable (for instance: is the market ‘durable’? In other words, will it last long enough to make your business worth it?).
Design Adaptive Products and Services
Simply designing a product may not be enough. The landscape of the market may change, and your product may need to change with it. Thus, you will need to know how to build what are termed ‘active offerings’ – adaptive consumer products that can change with the market’s needs.
Plan Your Budget
The most important part of your budget is your ‘peak funding requirement’ – that is, your moment of maximum exposure. Investors will need to know just how big your – and their – risk is.
Understand How to Attract Investors
Investors will want to know who you are, what your idea is, what your business model is, and who your customers are. People are actually the most important thing: investors are looking for more than just an idea or a product – they want to work with people who are honest, experienced, have leadership qualities, and have passion for what they are doing. Most investors will know that ideas can be refined, but personal conflicts or lack of expertise are more difficult to remedy. On the other hand, many good ideas never become successful businesses. Don’t assume that your product alone will be enough to sell your business. It also pays to understand your market and what you are trying to achieve. Show that there is a market by giving the examples of other applicable business plans – and how yours is different. Likewise, before you meet with investors, you should have a clear pricing strategy (competitive? Predatory? Bundled?) and understand how big the market is and how big (realistically) your share might be. Get your facts and figures right, and don’t exaggerate.
Andrew also gives a few short tips in conclusion:
– Have a tightly defined value proposition.
– Emphasise you.
– A great product on its own is no recipe for success.
– Ontario is a great place to be right now. There is a compelling story around digital, mobile, and Ontario.
In this week’s video series, Diane Davy from WorkInCulture presents information about how business planning can help the grant application process for Canadian content creators within the mobile sector. Diane’s three videos are also good primers for anyone who is in thinking about applying for a grant.
A large part of applying for a grant is having a strong and compelling business plan. It demonstrates to funders that you have strategies and objectives in place, that you possess a deep understanding of the market, the customer, and the business environment, and that you area able to deliver on that plan.
A business plan is a “description in words and numbers of your business with a focus on the future” Diane says. Seems daunting? It is the most time consuming aspect of the grant application process, but it will be the best time spent when developing your business. Give yourself the time to do the research and to write a cohesive and compelling plan. If you do, you will impress your funders.
Parts of a business plan include the following:
- Mission Statement “Why does my business exist and for whom?”
- Goals “Where are you trying to get to?”
- Strategies “How are you going to get there?”
- Outcomes and Measurements “How will you know when you got there?”
- Financial Information “What will it all cost?”
“Why am I in business?”
The first part of your business plan is your mission statement, it is the guide for your plan, helping you make decisions through each section, bringing it all together under one focus defined in the beginning. When first writing your mission statement, Diane asks business to ask themselves the question: “Why am I in Business?” It’s for you to create a clear answer, to know what you are offering and it’s benefits and how it will bring value to your customer.
Understanding your market
You need to further prove that you understand your market and be able to clearly define your potential customers, in demographic terms, and their “wants or needs” says Diane. This is where taking the time to conduct research for your plan pays off. You need to be able to define your market, its size and potential, and your value proposition to differentiate your product/service within the marketplace.
Research is where you will gain the insights you need to develop your plan. You can use various tools and techniques, such as surveys, social media inputs, past project research, and online reports that you may quote to send a strong signal to funders that you understand the market you are entering. The goal of all the research is to prove that there is a real need to what you are offering.
Funders are like investors
When creating your financial reports for your business plan, Diane suggests taking the perspective that the funder is an investor. Funders take your numbers very seriously and so should you. They are investing in the future success of your business based on the numbers and the plan you are showing them. Some of the financial statements you might need include, profit and loss statements, short-term or/and long-term forecast statements, and cash flow statements. If you’re not strong with numbers, hire a financial expert or advisor to help you with this section.
Matching up your stories
The most important part of the plan as Diane points out, and many miss when creating their business plan, is that the two main parts of your must fit together. You need to make sure that “the story you are telling in numbers matches the story you are telling in words,” Diane refers to the written parts of your business plan versus the financial statements. If you are asking for something in the first part of your business plan and it doesn’t match what you are asking for in your financial statements, then there’s a disconnect and the funders will not approve of your grant or loan. Both need to work together to create a successful plan for your business.
Your plan is there to prove you have a product or service that a target market wants or needs, and you are able to deliver if you receive the grant you are applying for.
Diane has some great examples about the parts of a business plan in her videos, check them out on our Mobile Ex YouTube channel:
Part 1: Tips for Business Planning
Part 2: Marketing Strategy
Part 3: Grant Writing
Blog contributor: Helen Kontozopoulos @helenissocial