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"A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals."
https://en.wikipedia.org/wiki/Business_plan
Consider this a homework assignment
for a would-be entrepreneur. How well you do determines whether your
business succeeds or fails.
The assignment is a research project.
You're going to research the validity of your business plan. I'm going
to show you how to do adequate research before starting a business.
It can be difficult to gauge what
"adequate" really means. Here's a checklist of some elements that any
sufficient business research will contain:
• Market Research
It may be surprising, but many
entrepreneurs start a business without really understanding the market
they plan to serve. You must know the potential size of your market and,
in turn, what sort of response your service or product will attract:
• Demographic Data
Don't try and sell something unless
you know the buyers have money to spend. Know the numbers behind your
market, including income levels, age breakdowns and if your target
market is growing or shrinking. Sources of demographic information may
include various governmental or taxing authorities and, on a more local
level, voter rolls (invaluable if you want information on the ages of
your market target).
• Customer feedback
An equally important element of market
research is getting a personal sense of your customers. Ask what they
genuinely value, no matter if it's a low price, customer support or a
particular element of your product or service. If you're gearing up a
new business or modifying an existing product, ask if your business can
solve some sort of ongoing problem.
• Competition
A third element of market research is
knowing who you're up against. Rest assured you will be competing with
someone, so never assume that you're the only company to have spotted an
opportunity.. On-site research is particularly helpful. Observe
customer traffic patterns, noting ebbs and flows in both the number of
customers and what they are buying. If it's a retail outlet, try
shopping there yourself.
Other research options include
visiting a competitor's website. If a competitor happens to be a public
company, you can obtain every piece of literature that a publicly held
firm must provide. Finally, while it's tempting to focus on a
competitor's weak spots, pay close attention to what they do well.
"Understand how they make their money," says David Gumpert, author of
"How to Really Start Your Own Business." "Don't just look at what they
screw up; find out how they're able to stay in business."
• Pricing
An ancillary element to market
research is doing work to decide what you're going to charge
customers.It's important to gain a feel for going rates to remain
competitive. Pricing competitors' services and data from trade and
professional associations is exceedingly helpful. But, says Meyer, pay
attention to every element that contributes to your eventual prices or
fees. "Price really is more of a marketing tool than it is a vehicle for
cost recovery," he says. "People will pay more for a high value product
or solution, so be sure to research your total value."
• Location
This is particularly critical for
retail operations. Ask any prospective landlord if they have a foot
traffic analysis on hand. First-hand observation is always a good
option; examine walk-in traffic, parking spaces and other nearby
businesses that may help or hinder your customer flow. Don't thoroughly
dismiss the issue of location if you're not selling jewellery or
clothes. A conveniently located office at a prestigious address can be a
boon to a start-up consulting firm. Review any available buying data
and trends for people who live in that area.
• Research Your Costs
Knowing your expenses is essential in
estimating how much you'll need to bring in to stay in business.
Research prospective costs thoroughly. Include everything from salaries
to rent. For at least the first year or two, break down those costs in
three-month increments.
E-commerce,
Internet marketing, web business, whatever you may want to call it,
might not necessarily be and easy or quick method. In fact, just like
conventional avenues of business, it requires as much planning,
thinking, and foresight to get the results you are after.
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