What’s the first thing that should enter the minds of your prospects and customers when they read or hear your name? Perhaps you want them to think of quality, service, convenience, helpfulness or expertise.
To help direct the position you want your business to fill in the minds of customers, consider developing a detailed business plan, suggests Monica Braun, a rural development specialist with the Nebraska-based Center for Rural Affairs.
Often, a business plan is developed at the request of a lending institution primarily for financial reasons – to project cash flow and expense. But Braun says walking through each step of the business planning process – whether you already have an existing business or are dreaming of starting one – can have real value in identifying business’ potential.
“A business plan requires that you’ve thought through your business idea and have set a direction and established goals,” says Braun. She adds, “For an existing business, developing a business plan may help explore expansion potential. It allows for asking the ‘what if’ questions.”
Braun says components of a business plan should include:
- Explanation of your business (or business idea)
- Describe your customers
- Identify your competitors
- Identify your competitive advantage – why people will buy from you
- Introduce your management team – identify people who help with your business
- Outline goals and direction
- Show financial projections
In putting together the plan itself, she also offers this advice:
Monitor market trends. Pay attention to the industry, what’s happening, and what the future predictions are. Also, ask customers what they want. Use this information to help establish goals.
Research your target customers. Braun says, “It is key to know who your customers are and why they buy from you. A common business mistake is to think that everyone is your target market. But, find the niche you fill.” She adds that it is important to think of your marketing and product in terms of this question: "Who does my product solve a problem or meet needs for?” For instance, do people buy from you because you are local, because they like your quality, because of your service, etc. The answer to that question helps better identify your competitive advantage as well.
In making your annual business financial projections: be realistic – if not conservative. Braun also recommends monitoring your expenses closely and reviewing your financial status regularly, so business decisions can be made wisely.
Consider putting together a management team that can serve as an informal board of directors. Braun says she knows of business owners who seek out 3-4 people whom they respect and meet with them annually to get feedback and new ideas. She says, “These people don’t have to be paid. Usually you can buy them a nice dinner and get their input. It’s also an opportunity to learn from other people’s mistakes.”
Braun advises seeking ways to distinguish your business so it stands apart from others. Perhaps you do this through service, such as finding ways to reward loyal customers. She adds, “People who are treated well will tell others.”
Lastly, she says, always listen to feedback and fix any bad experiences. “One person’s disgruntlement can be the first step toward causing a business to fail,” she concludes.
Once you have a business plan put together, review it regularly. Braun says, “The plan should be a dynamic document that is constantly changing as your business grows.”
For more ideas on putting together your business plan, read Business Plan in a Day or Six Week Start-Up, both by Rhonda Abrams.