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Three Steps to Take Before Creating Your Business Plan

19 Feb Three Steps to Take Before Creating Your Business Plan

Whether you are new to entrepreneurship or about to launch yet another in a string of businesses, your head may already be spinning over the large number of tasks yet to complete before you are ready to greet your first client. But in the midst of all this activity, don’t neglect the important preparatory steps to take before embarking on your formal business planning process.

With a bit of pre-planning, a comprehensive, written business plan can be the driving force behind all future business decisions. Here are three steps to take before putting your business plan on paper:

1. Clearly understand what you are selling. There are probably a lot of other businesses out there already selling the same products or services you plan to sell. Before writing your business plan, think about what else you need to sell: your brand. You may be able to easily describe your product or service in a few words, but is that really all you are selling? The answer is no. To compete, you will need to offer a better buyer experience. That experience, in addition to your product or service, is what you are actually selling. Taken together, they become important elements to your brand. Defining a path to make that happen is integral to your business plan.

2. Find your market niche. Just as you need to identify what makes the customer experience unique for your business, you also need to identify a market niche for your product or service. Business market research is vitally important to this step. For example, if you are providing human relations consulting, will you promote your services to all types of businesses or does your market intelligence show businesses with fewer than 30 employees are currently underserved? Identifying and creating a market niche for your business can help insulate your business from larger competitors targeting a broader customer base.

3. Identify your specialty.  Careful strategizing before putting together your business plan will ensure you are a master at what you offer and do not spread yourself too thin, jeopardizing quality. Just as you should identify a market niche, you should also determine how to divide your products or services into more manageable pieces. Specializing can help make best use of limited time and resources. For example, a new start-up offering communications services that has found its market niche with one or two business sectors should consider strategizing further to identify an area of service specialization, such as media relations or website content, rather than offering a broad menu of services.

Taken together, these steps will help you fine-tune the scope of your business. By doing so before writing your business plan, you will be able to put together a more meaningful and useful document to guide your future business activities.

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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC which includes InvestmentBank.com and Crowdfund.co. Nate works works with middle-market corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He is the chief evangelist of the company's growing digital investment banking platform. Reliance Worldwide Investments, LLC a member of FINRA and SIPC and registered with the SEC and MSRB. Nate resides in Seattle, Washington.
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