One of the most confusing business processes that any business owner or business head usually goes through on an annual basis is, of all things, the business planning process. While confusion and planning should not co-exist in the same phrase, it is unfortunately the truth of many business owners that I meet; they covet a streamlined approach that can help them put a plan that is actually actionable and realistic to the business conditions of the sector and the market.
Through years of helping clients put actionable business plans together and seeing them achieve their stretched targets time after time, I can tell you that there are a lot of trap doors, missed steps, and road bumps that pave the road to successful planning. I have also discovered seven key elements that are crucial to the success of the plan, and its ability to be practical and actionable.
Here is a brief outline of those seven keys to successful business planning.
- Identify the Market Need
Begin with a concrete market need. Most entrepreneurs are focused on innovative product development and finding the next great thing. Innovation may have even become the hallmark of entrepreneurship, as one cannot exist without the other. The innovative process depends on the business’ ability to identify the market need that sits at the core of the product offering. Understanding what your market’s specific needs are is one of the first keys to cracking the business planning code. Without that, don’t even start. Without a thorough understanding of your market need, all the product innovations that you have worked on, and the key success factors that your business will depend on may be aimed in the wrong direction. You will find yourself making great efforts and moving forward by leaps and bounds only to realize that you have been moving in the wrong direction.
- Identify the Market Size and Niche Criteria
While you may have identified your active market need properly, ensuring that it is of a viable size to allow you to grow a sustainable, long term business that can be scaled up is key to your business growth. Building the specific criteria that allows you to expand and contract your niche market accordingly, in order to ensure its viability is a major key exercise. Start first by writing down the key criteria that define your market segment, and the active market niche that you are going to be targeting, and then move on to quantifying that market by understanding its size, its buying power and the disposable spend that it has allocated to satisfy the need that your product satisfies. I can tell you endless stories of companies who peaked and went bankrupt within 4 years of opening up, just because they had not properly identified their active niche and made wrong qualitative and quantitative forecasts.
- Recognize your Unique Value Proposition
Are you setting out to create yet another “me too” company with already existing products or services, or have you identified something that helps you be unique and stand out from the rest of your competitors? Can you clearly articulate what makes your products and services unique and how differentiate you in the market place? Do the members of your niche market agree with you and see the uniqueness in what you offer? Getting your USP and Value Proposition right is key because people are mostly resistant to change, and in order for your business to get to its tipping point and start on a sustainable growth trajectory, you will need to be clear on your USP, and your USP needs to be aligned with customer sentiment, and subsequent behavior.
- Name Your Key Stakeholders
Have you identified who your key stakeholders are? What are they looking for? What is their desired outcome from the success of your business? How do the different stakeholders add value to your business and how do they extract value from your business? Stakeholders can enable the growth of your organization or even hold it back. How can you energize them?
- Devise Relevant Promotional Strategies
Identifying the relevant marketing strategies that enable growth in your particular business and that help you multiply your customer base at a viable cost of acquisition is a major key to cracking the marketing and lead generation puzzle without plunging your capital into black holes that do not generate the measurable results you are looking for to grow your business on auto-pilot.
- Breakdown Your Revenue Streams
Being able to identify and have a thorough understanding of where your revenue is coming from and which products sell better to which target market, as well as which products return a better profitability is yet another important element of your planning process. Getting your revenue portfolio right, and the profitability of each of the individual streams right, and understanding the inherent risks that may be attached to it is key.
- Budget Capital Needs & Breakeven Plan
Finally, figuring out how much money you need to start, operate and grow your business, as well as what needs to happen in order for you to skip through the milestones of business success, such as breakeven, return on investment, customer growth, sales revenue, and profit is the final crucial key in figuring out the viability of your business and investment, and having a sustainable growing successful business.
Make sure you cover these key elements, and you will have a sound actionable plan, that can be put to purpose, and that will surely help you build a sustainable growing business that can deliver the numbers and the success that you are aiming for.