5 Questions to Ask Yourself When Creating a Business Plan
5 min read
Recently, we’ve been getting a lot of requests to write about creating a business plan. Although we’re not really interested in writing an article that re-hashes all the information out there and tells you that “you should definitely have a business plan because it will really help you figure out what direction to go with your company”, you should know that every day I see dozens of articles which say exactly that. So if this is what you were looking for, sorry to disappoint.
However, I know from experience that someone needs more specific advice rather than just being told to create one piece of paper. And although some might disagree with me on this, my favorite piece of entrepreneurial writing comes from NewsVarsity, who’s written extensively about how his business plan has evolved since he started out. Whether you agree with their theories or not, there is at least some good advice in the article. So here are ten questions that you should ask yourself if you really want to create a business plan, and I’m going to try to do them justice. If you’re reading this now because someone told you that “you need an executive summary for your business plan”, please read on…
1) What does your company do?
Although this seems like it should be obvious, many people start by creating products or services without ever considering what they actually bring to the table. The goal is not necessarily to determine whether something is unique (although it certainly helps), but rather – what problem are we solving?
For example , a good friend of mine had been trying to figure out the best way to market his own fitness products for years. And although he was very successful, it turned out that he’d been focusing on the wrong thing – instead of targeting people who wanted a great workout, he should have been focused on those who didn’t want to exercise at all. He needed something that they would actually be willing to do and what’s more, enjoy – yoga classes – which is exactly what inspired him to create Yoga Download. By figuring out the problems that you’re solving for your target audience, you can then move on and try to solve them.
2) How are you going to make money?
Although this seems like an obvious question as well, some might assume their product. Or service would just sell itself, which is usually not the case. For example, I once had a friend offer me his latest e-book for free online in exchange for my feedback. Now if you’re a regular reader of this blog, you might be thinking. That was a pretty smart idea because it could be used as a form of product research and publicity at the same time.
And while he did get some great feedback from me (and others), that’s only half of what he needed to succeed. People who actually want to buy his products! This can be very tough on new entrepreneurs because they might expect everyone to want. What they have to offer at least as much as they do themselves. But this isn’t true by any means – you have to figure out a way to get your target audience. Excited about the idea and the best way to do that is by figuring out how you’re going to make money from it. In other words, people must feel like they cannot live without whatever it is you’re selling. So tell them why they can’t live without it…
3) Who are your competitors?
I admit that this question might be a little bit easier for some than others. But even if you have no direct competitors, there are still many. Who could potentially take away market share from you later on. For example, a good friend of mine just finished writing a book about mastering technology. In the music business which was going to include online tools that musicians can use instead of expensive studio equipment.
But because he’s an independent musician himself, many were happy to have him write something. That would save them money as well. The result was a best-selling book about music online for under $30. Seeing as people are always trying to figure out how they can save money. I’d say this is still pretty much the same thing as creating products. Or website like The Indian Jurist that directly compete with others. Although it may be difficult at first, you need to know where your “competition” is coming from. So that you can avoid problems further down the line.
4) What do customers actually think?
This leads us to one of my favorite questions…the most important one in fact. If only every business owner knew the answer! If you don’t know what people think about your product or service, you’re most likely not doing it right. Now I know that sounds like a bold statement but just for a second, think about how many times you’ve seen an ad. Liked the idea behind it and then bought into that same exact brand.
The most obvious example of this is Apple, which has “cracked the code”. When it comes to advertising their products – they don’t sell computers…they sell awe-inspiring experiences. And because they have such a loyal following, no one seems to mind. Paying more than other brands that might be just as good. Regardless, if you can figure out why customers would come back again and again. Instead of going with the competition, you’ll save yourself a lot of time, effort and money in the future.
5) How are you going to get people to buy from you?
This question is all about finding out what marketing methods would be best for your type of business. No one likes a salesperson because they usually just want. What they have to offer regardless of whether or not it’s a good fit. But when it comes to an online business like Waterfall Magazine. Customers have access to hundreds if not thousands of other products and services that could help them. Solve their problem instead, so you either need to
- make your product or service stand out from the crowd or
- find a way for your target market to quickly see how you can benefit them.
Either way, this be tough but when done right, can lead to an extremely successful business.
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