Get a job or start a business (series part 6)

(Free seminar coming up in Port Harcourt, Rivers Nigeria soon)

1. BUSINESS PLANNING

                                                              i.      Current market situation

To earn enough revenue, your business must be able to achieve a share of the available market. To do this, you’ll need to have a thorough understanding of your market environment, including its size and the share that you can realistically achieve. The size of your share will depend on

1.        Market trends: find out what influences your target market now, and how your product can take advantage of this

2.       Target customers: describe who your target customers  are and how many there are; also justify your estimate of the market share you aim to get

3.       Competition: list your competitors and describe their products; also describe in detail how your product will be different

                                                           ii.      Current target customers

Define the characteristics of the target groups of customers that could buy from your business. Make a list of the features that your products have, and the associated benefits that these features can provide to your target customers.

1.        For individuals, describe them in terms of characteristics like;

a.       age

b.      income

c.        location

d.      lifestyle, and

e.        marital status.

2.       For businesses, consider the following;

a.       location

b.       numbers of employees

c.        public or private sector

d.       industry type, and

e.       Turnover.

Carry out some research into how many customers there are in your target group and how much they spend, and also try to identify trends that tell you whether this group is growing or shrinking.

                                                         iii.      Competitor analysis

Competitors may be in the same (direct competition) or similar (indirect competition) business to you. The level and strength of competition in a market indicates how difficult it will be to gain a share of the market. However, it is not simply the number of competitors that you should be concerned about; analyze the following aspects of each competitor’s business:

1.        Their products: are their products and services the same as yours? Do your competitors provide something that you don’t?

2.       Their customers: are your competitors targeting the same customer segments as your business?

3.       Their share of the market: how large is it, and could you take some of it?

4.      Their strategies: how they grow, market themselves, and price their products. Can you learn from how they conduct business, or do it better?

5.       Their operations and facilities: what levels of service are customers demanding?

                                                          iv.      Marketing strategy

With a clear understanding of your market, you can define your overall strategy. Break this down into objectives and targets relating to the volume and share of the market (or market segments) you hope to achieve, and when you intend to achieve them by. Ask yourself, for example:

1.        Who are your initial marketing targets?

2.       What products, services or particular deals will you be offering?

3.       Is there a specific volume, value, or share of these markets that you hope to achieve?

4.      When do you hope to achieve these targets by?

5.       Why are you choosing these markets first?

6.      Who will you target next, in the next 6 or 12 months?

                                                            v.      Marketing plan

Now that you have a coherent marketing strategy, you need to be clear about how you are going to make it happen. A detailed marketing plan must explain how you go about achieving each of your marketing targets and objectives. Such a plan will include some or all of the following:

1.        The methods you will use for each target segment

2.       The specific action you are going to undertake

3.       A timescale or timetable for each marketing activity

4.      Who is going to carry it out

5.       The estimated costs of particular marketing activities

6.      How you will monitor  and review progress

7.       How you will handle the response to your marketing

It will also be important to identify how you will manage the overall marketing plan, in other words, ensuring that the entire budget is not spent in the first couple of months, monitoring results, adjusting the plan, and introducing new tactics as you go along.

                                                          vi.      Sales targets and objectives

Your marketing plan, when implemented, needs to be converted into perhaps the most important business goal of all: sales revenues. Set out your forecasts in terms of sales of different product types by;

1.        volume and value

2.        sales from different customer groups and

3.        sales from different distribution channels.

                                                       vii.      Operational requirements

Information about your operational requirements will be required for your financial forecasts, while other information will be needed for your basic operational planning. Outline your plans for:

1.        premises

2.        equipment

3.       staff

4.       suppliers and

5.        compliance and licensing, and estimate the respective costs involved.

                                                     viii.      Current financial requirements and financial forecasts

Your business plan should include a breakdown of your financial requirements, the sources of finance you have available to you, and any additional amount that you may need. This breakdown should include:

1.        the cost of starting your business;

2.       your personal budget;

3.       details of your own personal budget;

4.      details of your own personal finance;

5.       a detailed cash-flow forecasts that will help to estimate how much available cash you will have in any particular month;

6.       a profit and loss forecasts to help to estimate when your business will start to make profit (which will be essential to your medium-term success);

7.        and a balance sheet forecast to provide you with a snapshot of the trading position of your business, identifying what your business will owe, what it will own, and how financially strong it will be at a particular point in the future.

                                                          ix.      Management Processes

Even if you are the only person involved in your business, it is still important to consider your key skills, responsibilities, and management processes. Think about

1.        Management team-outline skills and experience

2.       Key staff and responsibilities-summaries roles and contribution to the business. Be sure to cover the following tasks: marketing and sales, finance, recruitment, products development, general management, and administration

3.       Monitoring and co-ordination-set out how you plan to monitor performance (against objectives and targets), and to co-ordinate the key roles in the business.