What is business plan and how it works-Describe your business:Now it’s time to describe your business. Before describing your business, you need to keep several things in your mind. The very first thing is that you will start your business as a small business, and you will grow this business step by step so that it can transform into a big business in the future. Secondly, your business must be sellable. You may or may not sell your business, but it is a very important thumb rule for any business. Third, you need to keep these things in your mind: scalable infrastructure, effective marketing, and effective leadership.
Identify your business type(What is business plan and how it works-Describe your business)
Now I will describe five types of businesses, and you need to confirm your business type as per the description. It is not necessary that your business will be the same as per the description, but you have to identify which business type is similar to your business.
Retail: Retail business is the business in which the business owner buys products from wholesalers and sells directly to the consumer. Most of the time, retailers purchase goods from wholesalers and sell directly to the consumer at thick margins. Some retailers also provide services and repair facilities occasionally to their customers. But most of the time retailers do not provide any service or repair facility.Some examples of retail businesses are General Store, dress shops, Big Bazaar, V-Mart, Walmart, etc.
wholesale:In the wholesale business, a business owner buys products from the manufacturer directly or from a broker and resells the goods to retailers. normally wholesaler maintenance and inventory of a number of lines Wholesalers do not sell products directly to the customer; they have low margins and high investment in inventory. Wholesalers buy in large volumes and sell in small lots to retailers. Wholesalers are not well known to the consumers because it is of no use for them.
Service: People with some specific skills, whom we call experts, sell their services to customers or other businesses. The end product of a service business may be some advice, some completely on-task,some information, or some software as a service. occasionally a service business physical product or good.Some examples of services are accountants, consultants, building contractors, architects, SAAS etc.
Manufacturing:In manufacturing, manufacturers either do assembly or process raw materials to produce products that are usable by consumers or other businesses. The most challenging part of any manufacturing business is to find a product or to find a series of products that have potential in the market so that generating a steady sales volume of the product or series of products is possible. Many times I have seen that when people want to start their own business, the first mistake that they make is to invest their money in manufacturing, which I do not recommend doing, at least in the beginning years of your business. I write books, but I do not manufacture books. No matter how much volume of sales I generate, I will never invest my money in the manufacturing of my books because manufacturing is hard; it’s tough. Even if you try to start a manufacturing business, it will take you years to understand and do manufacturing in a cost-effective way. Even when I was trying to get into the business, I tried to do manufacturing, which was a big mistake of mine, and finally my idea of a manufacturing business failed before starting.
Project development: In this type of business, developers create and finish a sellable commodity for a one-time project. Developers know the value of their project in the market before they begin the project, and then they sell the project directly to consumers.
Problems(What is business plan and how it works-Describe your business)
As an entrepreneur and a business owner, I love problems, and if you want to grow your business, then you have to love problems because a problem is not a problem; it’s an opportunity. You will earn money if and only if you can solve the burning problem of your customer. In other words, you may say that your customer will pay you to solve their burning problem, and if you try to take the customer towards pleasure, they will not pay you, and if you take your customer from a burning pain towards the pleasure, then the customer will pay you. This is a thumb rule that your customer will pay you to solve their burning problem. If you want to solve any small problem, then you may not earn money. What happens generally is that whatever burning problem you have faced in your life, you solve that burning problem of other people, and in this way you are money, and you create a successful business. So please remember what burning problem you have failed in your life and solve those problems for your customers. In this way, you will become their guide, they will respect you, they will give you money with respect, they will understand your value, and they will understand the value of your products and services.
Business Discription(What is business plan and how it works-Describe your business)
Now that you have identified the burning problem your customer has, you are going to solve it. Now you will describe how you are going to solve that problem. In the first attempt, it may or may not be good answer, so you shall take multiple attempts to write down a good description. Even if it takes good amount of time, still you will not hesitate because writing a realistic plan is far better than investing a good amount of money.Suppose you invested good amount of money to find out the good description, and it was not realistic; then it will turn into a loss for you, so writing a description is cheaper and better.
General Business Questions (What is business plan and how it works-Describe your business)
These questions apply to most businesses. Feel free to skip any questions that don’t pertain to you.
1. What problem do I solve for my customers?
2. Who is my dream customer?
3. How will I communicate with my target customer?
4. What products and/or services will I provide? Are there any products or services my customers may expect me to provide that I don’t plan to provide?
5. Where will my business be located?
6. Where will I buy the products I need?
7. What hours will I operate?
8. Who will work for me and how will they be paid?
9. Who will handle critical tasks like selling, ordering, bookkeeping, marketing, and shipping?
10. How will I advertise and promote my business?
11. What are the competition’s strengths and weaknesses?
12. How am I different from the competition, as seen through the eyes of my customers? (Make sure that you answer this question from a customer’s perspective and not from an owner’s point of view.)
Specific Business Questions(What is business plan and how it works-Describe your business)
Retail
1. How will I keep abreast of fashion and taste in my field?
2. Does my location have enough driveby or walk-by traffic to support my business, or must I rely on heavy advertising for sales?
3. Is it better to be in a shopping center with high rents and operating restrictions, or in a separate location with lower costs and less drive-by or walk-by traffic?
4. How much inventory will I buy in comparison to my expected sales revenues? (This is a critical question in the retail fi eld and deserves your close attention.)
Wholesale
1. Which product lines will I carry in inventory and which will I order as required?
2. Will I carry accounts for my customers or work on cash only?
3. Are there any exclusive distributorships available to me?
4. Will I have to market all the products myself or will the manufacturers have marketing programs?
Service
1. Are my credentials and skills equal to or better than others in my field?
2. Can I sell my service as well as I can perform it?
3. Will I take work on speculation or will I insist on cash for each job?
4. Do I have a client list to begin with or will I start cold?
5. Am I better off associating with others or being independent?
Manufacturing
1. Does my manufacturing process create toxic or polluting materials? If so, how will I deal with them and what regulatory agencies handle them?
2. Is there a pool of readily available, affordable skilled labor where I want to locate?
3. Will I make products for inventory or per order?
4. Will I make one product only or a line of products?
5. If I succeed on a small scale, do I plan to sell out to a larger company or try to compete nationally or internationally?
6. Is my competition from small or large firms ?
Project Development
1.Am I sure of the selling price of my project?
2. Am I sure of my projected costs? What will happen if my costs are higher than estimated?
3. Am I sure of the time factors? What will happen if it takes longer than expected to complete and sell the project?
4. What portions of the work will I contract with others to perform?
5. Is there a definite buyer for my project? If not, what costs will I incur before it’s sold?
Leave a Reply