Lesson 3: Business Planning
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Workshop Scenario:
Please think of yourself in the following scenario as you complete this workshop:
You have spent your entire career working in corporate environments, but you've always had a burning desire to start your own business. You recently had an idea for a new business that you're passionate about, but it's in a completely unrelated field. Despite lacking experience or expertise in this industry, you're determined to make your vision a reality. You feel certain that your business idea can be profitable while making a positive impact in the community.
After conducting market research, you have determined a gap in the market. Your target customer base has needs and wants that can genuinely be filled by your product or service. Your next step is to figure out how you will market your product to reach that target audience. How will you differentiate your business from the competition? As a true entrepreneur, your business must drive innovation and stand out from the rest.
Lesson Objective:
By the end of the lesson, you will be able to create a bulleted outline of a marketing strategy for your business and choose one financial target to measure its efficacy.
Important Questions to Answer While Reading:
In order to be successful in this lesson, you must be able to answer these important questions.
What needs to be included in a comprehensive business plan? How can you make it persuasive?
What are some of the ways to measure the financial success of a business?
3.1 - Elements of a Business Plan
A good business plan is a comprehensive document that outlines the key features of the business and highlights strategies for success. It should be a living document that is updated regularly to reflect ongoing changes in the market. Business plans are best when clear, concise, and compelling. Be sure to get feedback and input from mentors, experts in the industry, and other stakeholders as you scale the business. Of all the considerations you make when planning your business, financial management will be paramount. If you don’t personally possess budgeting and accounting skills, it is crucial to hire at least one employee to be responsible for the monetary component. Other essential elements of a business plan include:
Executive Summary: Provide an overview of the business and its key goals and objectives.
Company Description: Describe the business, including its products or services.
Market Analysis: Provide an in-depth analysis of the market, including market size, trends, competition, and growth potential.
Marketing and Sales Strategy: Outline the strategies for marketing and selling the product or service, including pricing, promotion, and distribution.
Operations Plan: Describe how the business will operate, including the processes, facilities, and personnel needed to run the day-to-day.
Management and Organization: Describe the organizational and leadership structure of the business. Create a clear chain of command.
Financial Plan: Provide the financial projection for the company that highlights the business’s revenues and expenses.
3.2 - Financial Projections and Analysis
As an entrepreneur, financial projections and analyses are essential for understanding the economic health and growth potential of your business. Start with financial targets and use these to achieve your business goals and objectives. Some financial targets include:
Revenue Growth: Goals for how much a business expects its annual revenue to increase.
Profit Margin: Goals for how much profit a business expects to make as a percentage of its revenue.
Expense Reduction: Goals for how much a business expects to reduce its expenses and overhead costs.
Return on Investment (ROI): Goals for much return a business expects to generate from its investments over a specific period of time.
These financial targets should be realistic and measurable. Financial data will need to be gathered and analyzed on a regular basis. Financial management is crucial to the success of your business. You may want to hire employees to manage the budgeting and accounting processes, as maintenance of accurate records is essential for making informed business decisions.
What steps will you take to ensure the financial viability of your new business venture?
3.3 - Creating a Marketing Strategy
Creating a marketing strategy is a crucial aspect of building your business. Remember, your marketing strategy should be flexible and adaptable to changing market conditions and customer needs. Continuously evaluate and adjust your approach to ensure the best results for your business. Consider your unique selling proposition (USP): how will you differentiate yourself from the competition?
Here's an example of a very basic marketing strategy for a fictional coffee shop:
Fictional Coffee Shop: Marketing Strategy Summary
The target audience for the coffee shop will be local commuters, employees who work from home, and students from the community college in the area. We will focus on providing three things: high-quality coffee, cozy ambiance, and excellent customer service. There are other coffee shops in the area but they do not have seating, so we plan to compete by offering a comfortable seating area with WIFI that attracts repeat customers. We will advertise our single origin, ethically sourced coffee beans that produce coffee that is better-tasting and lower priced than others in the area. Additionally, the cozy environment will foster community and conversation that people will want to revisit repeatedly.
We will use a combination of social media, email marketing, local advertising, and promotional events to reach our target audience. We will blast ads in social media, including local Facebook groups. A monthly newsletter will be emailed to customers, highlighting events such as coffee tastings and live music. We will also give coupons for discounts on the quad of the college campus to encourage new customers to try our product.
Our budget for marketing efforts is $5,000 over the next three months. We will need to develop high-quality photos of the coffee shop, flyers with catchy headlines, and visible calls-to-action outside the coffee shop to attract foot traffic.
We will track the success of these marketing efforts through sales data, customer feedback, and engagement on social media. Overall, our coffee shop aims to create a unique brand identity that resonates with coffee enthusiasts, promotes community, and fosters customer loyalty.
What elements of this marketing strategy were most convincing to you and why? Think about how you will structure a convincing USP for your own business.
Lesson 3 Assessment:
Now that you have reached the end of this lesson, you should be able to answer the following:
How can you make a business plan both comprehensive and compelling?
What are the strengths and weaknesses of the marketing strategy outlined for the fictional coffee shop?
Participate in the 24/7 Discussion Forum
Please answer the following prompts in the comment section below and interact with learners from around the world:
How might a business adapt its marketing strategy to address changes in the market or shifts in customer needs?
Debate the importance of financial management for a small business. What are the potential risks of not maintaining accurate financial records and projections?
Created by 24/7 Instructional Designers: Laura Campion & Vivi Ma
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