Every business needs a plan of action, projecting its facts, figures and what they are aiming to do within their specified market. But where do you begin? The prospect can be an overwhelming one and a simple Google search can leave your head spinning. This article aims to show you the basics of the essential elements needed when creating a business plan.
Okay so you have the product or service and you’re sure that’s its going to be the next big thing, but what do you do now?
PRESTCOM Analysis / Market research
When planning to enter a market it is essential to analyse and evaluate it in order to maximize your chances for success. A popular tool used by marketers and businesses is a PRESTCOM analysis. An analysis that focuses on 8 main areas of the market, these are:
Political – Factors including political climate and stability.
Regulatory – Factors including any regulatory committee’s or legal precedent that a company must follow such as the health and hygiene regulations set forth by the Food Standards Agency (FSA).
Economic – Factors including economic environment and trends that are happening the industry. An example of this would be an economic boom.
Social – How will society see your business? Have you responded to the cultural differences depending on your demographic? E.g. Halal food if you are selling food to a predominantly Muslim market.
Technological – Factors that include a change in the technological environment such as the move to contactless bank cards that help speed up business.
Competitors – Who are the main competitors in your chosen market? How will you be able to compete with them?(Possibly consider your USP at this point.)
Organisational – How the company or business will be organised and how its organisational structure will benefit the business.
Market – Understanding trends in the market. Is your product popular? Are your competitors stronger than you and why? Study your intended market share size and structure.
Finance / Funding
After analyzing the market and the environment, the next point of focus for you should be financing. You may already have investors or you are possibly looking to personally finance the business, but if not there a number of options available to you. If you idea is unique enough then angel investors may be appropriate. An Angel Investor is similar to a Dragon off Dragons’ Den; you pitch an idea and then see if any investors are interested. For those of you who do not wish to go on this route there are other alternatives including bank loans and business overdrafts. For businesses that are already off the ground and looking to expand, invoice finance may be a viable option. This is where a good accountant will come in and help you manage your finances.
This is an area that is sometimes overlooked when creating a plan or proposal, which could be a fatal mistake for your business. Choosing the right customer is just as important as choosing the right product. Having a demographic in mind is fundamental for success and also for your plan, as the plan will be aimed at how to target this specific group of people. For example, if your product is a toy for children then it would be less effective taking out an advert in the Financial Times, as children will not read this. This is an area that seems like common sense, but can become the last thing on your mind when creating an action plan.
Remember that these are only the key elements you must consider when writing your plan. When writing a business plan it is always worth getting it checked by someone already in business or someone with experience in the field.