Having a solid business plan is crucial when you're getting into business. Beyond the drive of impacting the world or making large sums of money, the right plan is the determining factor for success. There is really no universal way to create a business plan, some people think it's not that necessary. Part of the reasoning is because of the ever changing business landscape. With innovation and technology, old models keep been replaced by new ones.
However, the fundamentals haven't gone through any disruptions, they are still what they are. All businesses should aim to keep their eye on the fundamentals despite the changes happening.
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In this post, I share with you the steps that make up the fundamentals of a business plan.
Solve A Problem
There's nothing wrong with copying and executing better than your competitors but if a business wants to gain a stronghold in any market, It must solve a problem and provide value. Anything else other than that is just building on quicksand.
The first step in a business plan is determining the problem it is going to solve. How will it be providing value in a market? To be of value and substance, the answer to this question must be very clear. Right from the beginning, it will act as a guide on what to focus on and how to get things done. You don't want to be asked what your business does and you start reciting a long essay. Apply the K.I.S.S model; Keep It Stupid Simple.
Avoid going too broad and/or complexity as much as possible. The world already has enough of it. Now, people crave for simplicity.
Delivering The Solution
After you've determine the problem you're going to solve, the next step is delivering the solution. Will it be in the form of a product, service or both? What will the process be like and what's it going to cost?
Here, the focus is on production and distribution. The methods or channels you're going to leverage to deliver your product/service. If you can come up with more than two methods then that's a blessing. Less than two, that is good. None, then you're not ready yet.
Business isn't only about hype, it's about action too. You must be able to deliver on what you say you're going to do at step 1 (Solve a problem).
This is an important step in the business plan which is often overlooked by many. If you don't deliver, you don't get paid.
Getting Paid For It
The final step is how you'll be rewarded for the problem you're solving once you deliver the solution and got the job done. Being in business means bringing in revenue. Businesses exist to solve problems for a profit.
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There are many revenue models out there and it is important to choose the one(s) that suit your business. It's good to start with one revenue model. When you achieve scalability, it becomes easy to add more as long as you have a strong customer base. For example, YouTube is known for advertising but they're also in the subscription model through their tiered accounts.
Most businesses don't get the pricing right when they're starting out. This has to do with not being able to fully calculate the expenses and/or pricing the product/service based on the cost of producing it rather than the benefit or value it provides.
Remember, a business doesn't exist to be 'liked' or to serve all people. Even governments can't do that. So figure out who your customers are and go serve them. Being cheap rarely helps in business.
In Conclusion
Understanding this simple steps could proof to be a valuable asset in your business and investing endeavors. You'll also find it easier to spot in what area a business is struggling with and how to solve it. When it comes to investing in businesses, you won't be fooled by the 'slick talk', you'll just dive into the fundamentals and know what it is really about and based on that you can predict it's future valuation.
With this, writing a business plan can fit into a single page instead of it being a mini book. However, if you want to go the traditional route and receive funding for your business, venture capitals will want to see a mini book before they sign the check. So for the sake of protocol, make one for them too.
Thanks for reading!
Profile: Young Kedar
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