The most crucial aspect of any activity in life is planning. It holds for business too. Whenever you discuss your intentions of starting up a business, the first question will be, what is your ‘business plan’?
Let’s address this matter by understanding the following:
A business plan should cover the following points:
- Product development
- After Sales Service
All the points mentioned above are vital for a successful business. This chain is unbreakable.
The right product needs proper marketing followed up with the right sales strategy and best after-sales service.
We will cover these points in details; however, before beginning, I to want to tell you about the source of inspiration. A few weeks back, we were pitching for a sales partnership with a renowned modular kitchen brand. It was while preparing for the presentation; I came across this business plan template on a DIY graphic design website. Will be sharing the details at the end of this blog. I will adapt it for early-stage entrepreneurs. I am not implying that the aspects left out are not vital. However, we may address those later.
Let us now start the journey of how to design a business plan:
Once the product prototype is ready, to fine-tune, you need to list out your strategy on the following parameters.
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As a business, you need to understand what are the issues a customer is facing that you chose to solve. This point is extremely vital. Until you are creating value by eradicating a problem, the customers will not open their purse for you. Hence it is advisable to list them. You are the best judge of the type of issues prevailing for your target customers and should attempt to register at least 3 to 5 such problems. Let us take the example of uber. They identified a critical segment, intracity travel. Various cities have various models of primary public transports. However, general modes of transportation across the world rank very low in terms of convenience when compared to a taxi. Yet, taxis had their problems, safety, reliability, refusal, the list never ends. Uber identified these problems and addressed them to a lot of extents.
After identifying the problems, you need to analyse how your product solves them. Swiggy and Zomato in India, Uber and Grab elsewhere solved the problem of home delivery of food. Offering a solution to an existing problem is crucial; It is a vital aspect of a customer deciding to purchase your offering.
Unique Value Proposition (UVP)
UVP outlines how your offering is providing solutions to existing problems. Amazon prime is an example; customers get same/next day delivery at no extra cost. This service eradicates the issue of long waiting periods between placing an order and receiving delivery of products on its platform. This point forms the foundation of your marketing communication.
Unfair advantage is the cutting edge that you have over your closest competitor. The stronger this advantage, the closer you are to monopoly. It could be physical or technological. Google is the best possible example, the way it has innovated leaving closest competition miles behind. It will take ages for competitors to catch up and it reins over the internet meanwhile. It is noteworthy how they are continuously innovating to retain this edge. So as a startup in your business plan, you need to identify this aspect of your product. If it is missing, you will remain another face in the crowd.
When I was using this template to build my business plan, I got stuck on this point. This section advises creating 3 – 4 customer personas. Individuals you see as your potential customers. Initially, I thought of it as a waster of time, why do I prop up an imaginary customer. However, after pondering on it, I realised that this is a useful tool. This activity helps you clarify your vision of potential customers. Let me share a customer persona that I created during my presentation for modular kitchen sales. This example will give you an idea on how to create yours.
In this section, you need to list how the problems identified are addressed currently. Is it a competitor’s product or another alternative altogether. The former holds for consumer goods and services, the later for technology products. In-depth research on the point will lead you to create a disruptive product. I firmly believe that this is a vital point of business plan where-in you can create a potentially ‘unfair advantage’.
What will be the sources through which you would like to reach your potential customers? Whether through direct channels or online and social media. For example, there are mobile handset manufacturers that sell their products online exclusively. And then there are some that balance sales both online and offline. They discourage deep discounting on online platforms to ensure parity in both the mediums. This strategy defines the entire sales infrastructure. In case you are selling online, you will need to build up online sales infrastructure. One has to build an e-commerce website, payment gateways, last-mile logistics partners, reverse logistics, after-sales service. In the case of brick and mortar, the parameters become different. Initial investments become heavy as real estate gets involved.
What is that you intend to charge the customers? Does it cover your cost of production and marketing and provides profit? Are there any established industry price points? How aggressively is your product priced vis-a-vis competition?
Once everything else is in place, the sales strategy needs formalising. How do you intend to monetise the leads generated by channels set-up earlier? Whether you will convert by offering discounts and bundled offers? Or create an experience centre for potential customers to experience the product first hand? This aspect depends on the type of product you are selling. In the case of technology, usually, a trial period is offered. This strategy allows the customer a first-hand experience of the product utility, allowing them to make an informed decision. However, in the case of consumer durables, a sustained marketing campaign followed by periodical offers to convert interest into sales is standard practice.
This segment of customers needs special attention. You need to understand their characteristics, likes and dislikes. It is the early adopters that help understand the strengths and improvements areas of the product. They will give you a strong sense of direction towards future product development.
A vital aspect for any business to survive, after-sales service is an essential tool for repeat customers, referrals and brand loyalty. An excellent after-sales service team sets the brand apart. This aspect reflects the confidence; the business has on its product and that it is here to stay.
With time you will realise, references are the best way to generate leads. It is so because a satisfied customer is the best marketing advocate. A business plan has to include a referral plan; how can you incentivise existing customers to bring in new ones?
Having listed the above articles, you need to do a competitive SWOT analysis of the product. I will not dive deeper here as we have been doing SWOTs since high school days, and most of us are adept at it. However, it is a vital element of any business plan.
There are further ways to fine-tune this presentation, for example, the pirate funnel, 4Ps and marketing funnel. However, I will be covering those in future blogs.
Now, there is an important issue that might be plaguing your thought process. In case you are wondering, given the current global financial situation, should I start a new business now? To get your answer, please click on this link.
Also if you would like to know how the Government of India is promoting and helping startups grow in India. Please read this article on our website where-in we have covered this topic. It throws light on the efforts in this space
You may click on this link for the DIY template which has been my source of inspiration for writing this blog. It is an excellent interface, and I use it regularly for my blog artwork and brand communication.
I hope you liked reading this blog and it added value? In case you may have any suggestions, or any questions, please feel free to drop in a comment or write to me at firstname.lastname@example.org. I will be happy to help. Thank you!