Recently I read a tweet from one of my business icons: “A new business is a lot like a baby turtle.” He goes on to explain that only one out of every one thousand turtles is strong to survive out of their nests. The lurking danger for baby turtles includes crabs, birds and the big fish.
For a business however: cash-flow, advertising, recruitment and product inferiority are the hurdles to jump to get past the beginners stage. These are the building blocks of any business plan.
A business plan needs not to be 50 pages long; keep it simple and achievable. As a new entrepreneur you need to think about three key factors before you put everything down in pen and paper.
1. Finding the right people.
The old adage says ‘no man is an island.’ In life people are imperative to the progress of an individual; once you surround yourself with good people you undoubtedly lead a better life. More so for business, valuable people on your team are greater assets than any goods you can buy.
People who share a similar passion with you about the new business can bring fresh input and perspective than ever imagined. Most people put together a team as the last thing when establishing a business, yet is should be the first thing.
Once you have a team at the initial stages they understand the goals and expected outputs from the onset. They can offer ideas herein and bring new insight even as you begin to set up.
This does not mean that you start worrying about salaries before you have all your ducks in a row. It means you start a conversation and gauge interest of identified persons. This can be through informal coffee dates, phone calls, emails and virtual meetings.
Traditional recruiting for young companies is at times tedious and time-consuming. Always start from the inner circle and ask for referrals if your circle is not appropriate for you business idea.
2. Establishing a viable brand and brand name.
The fact that you are starting out does not mean your brand does not exist. You need to think about creating visibility for you brand from the get go. You have to study existing brands similar to yours. Find out their steps while starting out, these can be both local or internationally. Borrowing ideas is the oldest trick in the book, it saves you time and expands your mind where research is concerned.
In this digital age we are lucky to have free marketing tools that are effective in getting new brands on the map. These include facebook pages and twitter profiles. You can reach a wide range of clientele through this medium. That said, the traditional “Word of mouth” is still the number one and sure way of getting word across about your brand. Talk, talk and talk some more about your brand.
3. A cushion against loss
When most people start a business they rarely think about loss. This is unhealthy, starting a business is always a risky venture however prepared you think you are. You might have the right people on your team, a hyped up brand as well as finances but when a crisis hits you immediately hit ground zero.
Imagine your business premises being caught up in an unfortunate inferno in the third month; you need to have a contingency plan to deal with crisis.
In this case your finances need to be in order such that you plan ahead of the business at least six months in advance. You need to be able to project your profits at least in the first six months. You also need to plan on investing into the business constantly at least in the initial 24 months. This provides great cushion in case of any eventualities.
There in, one needs to plan ahead to alter business processes to revert the eventuality of any losses. At the initial stages a business’ primal goal is to survive and the cushion is the saving grace when tragedy hits.
In line with the above a solid business plan should contain the sections below in the simplest form.
- Executive summary; Explain business concept, unique financial model, market analysis, existing management experience from the team in the labour force and advisory board, and plan to mitigate any risk.
- Mission; Should talk about your workforce first (building blocks of any business), your customers second and the business lastly.
- Risk factors; Plans to address cost overruns, how to address failure to meet production deadlines, tackling sales projections not made, inadequate capital, need for technological developments; facing unforeseen economic, social or political developments, unexpected industry trends and threatening competition.
- Key to success; What is the x-factor about your business idea?
- Objectives; Here we need to see the costing vs. quality argument whereby businesses need to provide the best goods or services at the least cost to achieve maximum profits, also touch on employee improvement and marketing.
- Ownership Status; To include the business structure, forecast on the investment, exit strategy and/or any licensing agreements.
Back to the baby turtles; once they get through the initial stages they can live up to 80 years. Such is the story for good business. A successful business can live for several generations as long as it is able to adapt to changing environments.
