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.