5 tips on setting up your business plan

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Starting your own business is a road filled with nooks and crannies which may or may not lead to profitable success. Most entrepreneurs stress on the importance of the product, idea, or service in the success of the businesses. That’s a common mistake. You can start a lemon juice business and be more successful than inventing the next hyper-tech tool that could change the world forever. A business is as solid as its business plan, which is what you need to focus on if you’re thinking of taking the leap. 

To start you off on the right track, here are the most important steps in creating your business plan:


Understand the problem you’re solving

A serial entrepreneur was once heard saying: “ask yourself, what would change if your product/service did not exist. If your answer is nothing, then you probably don’t need your product to begin with.” In finding the right business idea, you should start by looking for the problem you are solving or fixing. Some businesses focus on fulfilling a need, other businesses create needs that require to be met. Find where you are on this spectrum and dictate the pain points. This will not only give your business a credible reason to exist, but will also help you create your MVP (Minimum Viable Product- the first draft of your product in simpler terms).


Validate your MVP

Before you release a full-fledged product to the world waiting for sales to kick in as validation, it’s important to create your MVP. MVP is the beta version of your product/service; it has just enough features to address your client’s pain points without having to provide a polished end product. Once you have a functional MVP, it’s time to put it to the test. Market validation can take different forms:

- having conversations about your MVP with potential clients to gather feedback

- creating surveys with big samples

- running focus groups

- collecting big data entries

Through market validation, you’ll be able to understand how to shape your final product, what the users will expect of it, and confirm or change your business directions- before spending hundreds of dollars on failed attempts that is!


Validate your market

It would be a disappointment if you have perfected your user experience through heavy R&D if it turns out there is no need for your product in the market. Most entrepreneurs directly use geographic proximity as a definitive marker in choosing their market; that thinking is valid only if your product is related to geographic proximity, like if you’re providing internet service. However, sometimes your closest market might not be the most profitable or even profitable at all. For this reason, before releasing your product, you need to validate the market you’re entering. To do that, you need to understand the capacity of the need for your product, find out the number of competitors in your market, and project the growth of demand through studying similar products and markets. If you feel lost in the search for such information, find benchmarks that your product can relate to and bank on their research (sometimes, you really don’t have to reinvent the wheel.) 


Create your feasibility study

By now, you should have a clear vision of what your product/service is, what it’s going to cost you, and how many people will eventually buy it. In an accountant’s brain that translates to: Costs & Revenues; and those definitely have to balance out! Creating your feasibility study is an arduous exercise, but once you’ve done it, you’ll be able to officially pitch and run your business. Your feasibility study should cover all the running and fixed costs you will incur, the set pricing or packages you will offer, and projected revenue you will generate over a set period. By the end of your feasibility study, you should be able to answer the million-dollar question: How much money do I need for my business to survive? The answer to this question is your business core- the ultimate objective.


Choose your funding

If you have a solid product/service, and you’ve done all the thorough research needed, finding funding for your product becomes a game of bests. You need to find the best source of funding that will finance your business and not cripple it on the long run. There are two types of funding for startups: Venture Capital Firms and Angel Investors. VCs are large firms that fund multiple startups and businesses across all sectors. Angel investors are individuals, family, and friends that believe in your business and choose to invest in it. There are pros and cons to both VCs and Angels, and there is no golden formula to decide on which to choose. For example, one dilemma of choice is that VCs could provide more in funds than Angels, however they expect more return on investment. In making your decision, keep in mind the following:

- the percentage of return on investment

- business equity required

- the availability of mentorship/incubation

- the capital invested

- the time period of commitment


Starting your business is like having a long conversation with the world. You need to be very well prepared to have this conversation, constantly on the lookout for insights and opportunity, and always be ready for the conversation to take a turn. If you manage to match preparation with opportunity, you’ll be matching your ideas with bank cheques very soon!

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