Congratulations! Your idea is now a good business opportunity and you are ready to enter the start-up stage. The start-up is that early stage in the life cycle of an enterprise when an entrepreneur moves from the idea stage to securing financing, laying down the basic structure of the business, and initiating operations or trading.
To ensure a smooth transition into the start-up stage, it is usually advised to have a laid out plan that evaluates all aspects of your business venture including a description and analysis of your business. A correct assessment of the factors that are bound to affect your business will provide a useful road map as well as a financing tool to your business idea.
Let's assume you're a fashion designer and you're about to set up a tailoring business specializing in sewing and alterations and you have identified the opportunity of an infinite demand for bespoke clothing. In order to start up on the right foot, you need to have a laid out business plan and strategy that will go long way in guiding you through each stage of starting your sewing business. Bear this in mind: your business is part of an industry, therefore your strategy should be represented in an industry context. This will allow for favorable pitches when sourcing for finance from investors and earning positive views from external stakeholders.
It is advised that the contents of your business plan fall under the following essential sections for the purpose of clarity. These sections include:
1. Executive Summary: This element compresses the main points of your plan so that investors can quickly decide if the opportunity you are presenting suits them well enough to continue reading. While this comes first in the business plan, it is usually written last.
2. Product/Services: Detailed information about your products and services should be given. Let's use tailoring as an example. As a tailor, you might decide to specialize in sewing and altering men's clothes. You could also to choose to narrow your services down to making specific apparels like suits. This information should be given in your business plan in such a way as to appeal to the imagination of potential investors.
3. Marketing: Here, you should address the target market you intend to reach and your plans on how to reach them. You could make a list of the marketing platforms you intend to use as part of your marketing strategy. These include social media platforms like Facebook, Twitter, Instagram, etc; word of mouth marketing (referrals); attending or organizing fashion shows in order to display your designs/clothes, etc; placing adverts on print and electronic media; and some other marketing strategies that will ensure a growing customer base.
4. Business Model: This section generally provides investors with answers on how you intend to generate revenue. Your business model should include a timeline that includes upfront costs that you expect to incur, the sources of funds that will cover these costs, and a schedule showing when you expect revenues to start coming in. Also, it is important to take into account how customers pay for your services. This could be in one lump sum or spread in installments. You could choose to embrace a technology-rich business model by setting up an online store with different payment options and by using recent technology to carry out routine business tasks like accounting, taking of inventory, billing, etc.
5. The Team: While some businesses could be run by one person, some others require team effort. Going back to our tailoring business example, you might require the help of a team to help with marketing, handling books of account, content management for your e-commerce platform, apprentices, delivery, etc. You should introduce and highlight the relevant background of your team members in this section of the business plan.
6. Competition: It is very crucial that you take a look at other tailors in your locality who are already providing the same kind of services as you are. This will allow you make informed choices about your business strategy, and also helps you find out if you have what it takes to compete with existing tailors in your area. Sometimes when there is too much competition, budding entrepreneurs are usually advised to start their business in a less competitive marketplace. Your knowledge about existing competition and your competitive advantage over them should be reflected in this section.
7. Financing: This section covers how much it will cost you to start your business (e.g. the cost of acquiring sewing machines, mannequins, rent, packaging materials, etc.) how much money you have, the source(s) of your funds, how much more money you intend to raise from investors and how you intend to utilize the funds. Here, you should also state how much returns you're promising the investors if this is applicable.
8. Operations: Here, you will describe how you will deliver your products and services, problems you expect along the way and how you will tackle them. As a tailor, you will need basic equipment and other necessary supplies like sewing machines, thread, fabric, etc. You may also describe how you plan to run your e-commerce and after sales services. Depending on how much capital you have, you may decide to rent or build a shop or operate from home. As a young entrepreneur, a home-based business will be pocket friendly and will also provide a good testing ground for your services.
Other things that should be included in your plan include you growth plans and how you intend to track the progress of your business overt time.
According to Reid Hoffman, co-founder of LinkedIn, the fastest way to change yourself is to hang out with people who are already the way you want to be. In order to become successful in your chosen field, you need to find a non-competitive business mentor who you can learn from. This mentor could be someone who runs a successful tailoring shop, most likely in another city, as local competitors may not be willing to share their entrepreneurial wisdom with you.