Developing a Business Plan — Visioning Exercise.

If you’re starting a new business and you think that your business idea needs planning and strategy before actually starting the business, then I’m gonna break down simple steps of how to structure a business plan.

The first thing that you need to do is take-up “Visioning Exercise.” This will help you make your vision specific. It helps bring clarity to our goals so we can take better decisions and plan execution in right direction.

A Visioning exercise should cover a few basic points.

Explaining “Business Idea” in one line

If you can explain your business idea in one single line, It shows how simple / or complex your business idea is and how well you understand it. This exercise can help you organize / put our thoughts together and help us focus on your core activity.

Lets say you wana build your fashion brand and you start with apparel as a segment. So your one line vision could be; “To build fashion ecommerce store.”

S-W-O-T Analysis

Strength — As simple or trivial as it may sound, this is actually one of the most important steps in writing your business plan. SWOT is nothing but, being aware of your strengths, weaknesses, opporunities and threats. When you’re aware of your strengths and weaknesses, you can easily eliminate things that don’t suit your swot and adopt/choose things that favour your SWOT.

If something dosent suit your strength, dosent mean you don’t pursue the particular business idea. SWOT exercise actually helps you identify your strengths and weaknesses. So, if a particular thing is your stregnth, do it yourself, if not, hire someone or partner someone who’s good at it. Complimenting strengths can achieve better results.

Since we’ve taken an example of starting an e-commerce webstore of apparel as a vision, may be your strengths could be that you’ve had and experience of being a designer or you like fashion and you’re a social media influencer.

Weaknesses — You could be weak with product development or sales or marketing. The most important thing is realizing that this particular activity in the business is not my strongest suit. Once you realize it, the solutions to this problem are plenty. You could outsource your weaknesses to an agency, you could hire experts, or you could partner with like minded people having contrasting strengths abilities.

Opportunities — In today’s digital age, opportunties are plenty..you just have to pick n choose stuff that you like and you can have great leverage by taking your business digital…quite a few people feel that their work still cannot happen digitally. But even if that’s true, it’s only a matter of time before your industry goes digital…or may be someone with half your potential / knowledge might be already taking leaps and strides digitally and you might not even know.. So keep surfing google and keep exploring opportunities,.. When you make a plan, note down the opportunities that you feel are presented to you in this plan. This will help you evaluate the opportunity cost of choosing the right business plan,.

Threats — The threats are always gonna be there and they are always gonna be increasing..if you feel that some big player has already captured the market / is entering your field and you don’t have any edge over them in terms of product, pricing, service , quality whatever, then you could probably pivot your business plan again and offer something where odds of your success are better,.

USP’s

USP is a popular term widely used in connection with business strategy. USP stands for unique selling point. Now with rise of social media and in the age of instant gratification, its difficult to find a USP of business. No matter what you do, it gets copied the next minute…but what I mean here in terms of USP is …what are the things that you can use in your sales pitch of your business. The things that make your business wonderful. You should know these things. It helps get more conviction on the success of your enterprise.

Target Market

Its imperative to understand the right target market of your products. If you’re planning to cater everyone, you’ll end up catering no one! In the starting stages of your business, it helps to keep your target customers specific so as to derive highest value from the limited resources you’ve at disposal.

Developing a financial model

After undergoing a simple yet effective, “visioning exercise” its time to align your financial expectations with your busniness idea. For this, we prepare a financial projection.

Financial model has two important elements, “Revenue and Costs”

In revenue, you need a detail plan of how you’re gonna monetize your business, what the revenue streams are gonna be like.. In the above example of fashion webstore, revenue streams could be product sales, you could offer services along with like styling, or you could start a blog or channel to make people aware. So this forms a part of your revenue strategy.

In Costs, you can divide it into investments and expenses, & one time and recurring costs , depending on the nature of cost incurred. Your budgeting sheet can take care of this. What you gotta builld is a reasonable financial model well within the reach of your capital.

Exit Strategy

Exit strategy determines, what you’d be left with, incase you exit the business at any stage. May be, if your business fails or it succeeds. If you’ve got investors in your business, how do you plan to give them an exit and at what stage and so on..

Exit strategy is like expecting the best, but preparing for the worst. Its especially important when you’re attempting something new. Lets say you’re starting a business by introducing innovative products and creating a new category which is currently not existing in your target market.