Business planning is supposed to be the first step in getting a new venture off the ground, and many find it easy to understand the necessity. However, in our experience, the real surprise tends to be how much complexity this kind of planning and preparation involves. Where does a business owner – aspiring or otherwise – start with business planning?
Here are the steps, all laid out:
Define and Set Goals
First, reflect on what your goals are for your business. Business goals provide an overall direction for your business, set benchmarks by which to evaluate progress, encourage rapid growth, and prolong your momentum.
Note that “turn a profit” is not specific enough here. When setting goals for your business, think S.M.A.R.T.: specific, measurable, achievable, relevant, and time-bound. “Turn a profit” is measurable, achievable, and relevant. However, it’s not specific enough, nor is it time-bound. How successful would you consider your business with an annual profit of one dollar?
Conduct Market Research
You may have extensive experience in your business’ industry already, but it’s good to do your due diligence – there is too much potential for unforeseen gaps in knowledge. Doing proactive market research is crucial to understanding your consumer base and reduce risk, potentially before you’re open for business.
When doing market research, consider the following:
- What is the demand for your product or service?
- How large is the market for people interested in your product or service?
- What are the income and employment rates like within your industry?
- Where do your customers live? How would your business reach them?
- How much direct competition would you have? How saturated is your market?
- What is pricing like for the kinds of goods or services you will be providing?
You can gather this information by going directly to consumers as well as other professionals in the industry. Additionally, the U.S. Small Business Administration has a table of resources that may help you get started.
Resource Identification
There are four primary resources every business needs to function: financial, human, education, and physical. Your business will require funding, employees, industry knowledge, and facilities (amongst other things), so it’s important to consider how these necessities will be sourced.
We’re also going to highlight a fifth resource that is often overlooked: emotional. Starting and running a business is difficult and complex. Small business owners have a high degree of potential to burn themselves out or overexert themselves to disastrous lengths.
Sources for emotional support can come from a variety of places. The most notable, of course, is family and friends, but ideally includes the team of professionals you choose to help support you. Having the right business partner, employee, or even a financial advisor with the experience needed to help you stay organized and on top of everything can make a crucial difference.
Develop Strategies
With the errata of your business goals, industry, and resource needs ironed out, it’s now time to develop a business strategy. This strategy will be how you integrate all these variables into initiatives that give your business a competitive edge. There are six core considerations when developing your business strategy.
- Defining your organization’s purpose as a starting point.
- Assessing your market’s competitive landscape.
- Understanding how your business creates value for customers.
- Understanding how your business creates value for suppliers.
- Understanding how your business creates value for employees.
- Creating a roadmap for actionable tasks and KPIs.
Best practice is to implement a value-based strategy, also called value-based pricing, by using a value stick framework. A value stick framework has four core factors: willingness to pay, price, cost, and willingness to sell. This helps visualize the principles of value-based strategy and how firms can maximize profit and create more value for customers and suppliers.
Create Your Business Plan
The next step is to compile all your business planning into a business plan. A strong business plan outlines short-term and long-term goals, core business activities, budget, and resources needed to get started. This formalized document should contain an executive summary, company description, marketing strategy, and an appendix for sourcing data that supports the main sections.
Implementation
Once you’ve formalized your business plan, the next step is to act on it. All the preparation you have done should help you make purposeful, planned decisions when getting your business off the ground. Remember to stick to the strategies and tactics you’ve outlined and use them to stay focused.
Evaluate and adjust:
Finally, as you begin moving towards your business goals, remember to regularly evaluate your progress and adjust as needed. Reflect on the goals and benchmarks you set going in and compare them to where you are. Informed decision making is key.
Starting your own business can be a daunting process, but having financial experts at your back can help you feel confident moving toward your business goals. Our Wilkinson Wealth Management team can help you navigate your financial challenges and opportunities with confidence. We prioritize building long-term relationships with clients and aim to be the person you call when life throws a curveball or questions arise. To learn more about our 2023 outlook and how we can help you, reach out to us at 434-202-2521 or use our Contact Us page to schedule an appointment.
About Susan
Susan Wilkinson is founder, president, and financial advisor at Wilkinson Wealth Management, a financial services firm in Charlottesville, Virginia, providing customized financial planning and strategies with a personal approach. With over 25 years of experience, she has a passion to come alongside her clients to help them fulfill their dreams and grow their wealth so they can be financially independent. Susan is known for listening to her clients, digging deep into their values, concerns, needs, and goals so she can build a financial plan tailored to their unique life. She prioritizes building long-term relationships with her clients and being the person they call when life throws a curveball or questions arise.
Susan is a CERTIFIED FINANCIAL PLANNER™ professional and has an MBA from Webster University and a Bachelor of Liberal Arts in Economics and Sociology from the University of Mary Washington. When she’s not serving clients, you can find Susan outside, either gardening, biking, or hiking. She’s a homebody at heart who loves music, especially playing the piano and cello. One of her favorite things to do is spend time with family, including her husband, Terry, her children, and her twin granddaughters, whom she affectionately (and appropriately) calls the “twinados.” To learn more about Susan, connect with her on LinkedIn.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.