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Business plan prep

3 Essential Things to Do Before Beginning to Write a Business Plan
by

Monty Edson

on 26 February 2013

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Transcript of Business plan prep

Who / what are they?
List your target markets or niches
Identify them using
Demographics (OK)
Psychographics: think/feel (better) What to do before you start Need a business plan? Problems you'll face Before you start, use a different approach Grab the attention of your target market! Borrowing for your new or existing business?
a bank loan?
a SBA loan?
Approaching potential investors for a new business?
Getting the business ready for sale?
Convincing your partners (or yourself) that you know what you are doing?
Revising your plan because your business' environment has changed? Get a business plan template
"Business Plan for Dummies"
Download an outline from the Internet Pieces don't connect 1. Identify your target market and the "job to be done" USP Need to Write a Business Plan? At the end, you can be certain about one thing ...... Nothing will ever happen the way you spell it out in your business plan! So, what to do? What's the job to be done? Is it: Functional?
Social?
Emotional? Functional Help me get something
done I don't know how to
do or can't do by myself A Functional Job Help me do something I don't know how to do, can't afford to do or can't do without some help. An Emotional Job Help me feel better about myself A Social Job Help me get other people to feel good about me 2. Develop a clear Unique Selling Proposition 3. Create a plan to test your assumptions at the lowest possible cost Clearly Identify Your Target Markets Create a "bold promise" (often includes a guarantee) Make it clear why your target market should do business with you.... and not anybody else Numbers don't add up Lots of unanswered questions, untested assumptions Pro forma is a single-point estimate, but lots of stuff could happen that could change what actually happens in the future Where are they?
Where will you find them in the highest concentration?
What are they likely to be doing or looking for when they are ready to buy? Without a clear USP.... You won't be on track to attain a lasting competitive advantage, because.... You won't have a consistent message to include in all of your marketing materials:
Brochures
Signage
Advertising
Business cards
Other marketing initiatives You won't have clarity about who your audience is and what the "job" is you are doing for them, so... Use the "Unique Selling Proposition and Guarantee Workbook" to build your USP A 12-page guide to developing a dynamite USP Use it to build a solid foundation for your business, for your marketing and for your business plan Never, never start working on your business plan until you have nailed this down Try your USP out on people in your target market. Refine as needed until you get it right! Reverse Income Statement Example Reverse Income Statement Developing a Reverse Income Statement Start with the end in mind How much money do you want to make pre-tax? What's a reasonable pre-tax profit margin to expect? Calculate the sales you need Figure out the allowable total costs Key Assumptions Document the sources for these assumptions Create a plan to test your key assumptions at the lowest possible cost! Which are the most important assumptions to test? Test these early in the plan so you can learn, adjust plan and conserve your cash Create "milestones" at which you will validate or modify the assumptions based on what you have learned Map all assumptions to milestones Don't commit more funds until plan is revised - or project is terminated A way to "learn at the lowest possible cost" Start writing
Get lost in the numbers Get writer's block
Get frustrated, give up Pay somebody else to write it for you Construct the income statement, noting assumptions as you go Finally, summarize as "customer personae" _________ OK, NOW you're ready...... You've focused on your target market(s), know how they think and feel, given them life by creating and naming personae, and know where to find them You've developed a compelling USP, backed by a "bold promise" that give your target market a reason to do business with you (and no one else) And you've created a plan to test, validate or revise the assumptions on which the plan is based. Now what? Suggest you use LivePlan.com Questions or Comments
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