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Business plan prep

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

Monty Edson

on 27 February 2017

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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"
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:
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:
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
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
Full transcript