Make sure you are very specific when it comes to describing your typical customer, your product and exactly how you are going to market the product. “Too many business plans glibly talk about ‘mass media advertising’ without having the faintest idea about the costs.
Be precise about how you are going to get your message to the consumer,” says Martin Feinstein, programme director of the National Business LaunchPad.
It’s also imperative to assess other business models in your industry. “From this you need to extrapolate, devise and fine-tune a practical business model that will work for you,” André Diederichs, SMME specialist at Old Mutual advises.
“Individualise it with your own personal stamp that will differentiate it from others, while keeping in mind that it needs to be workable and not merely an impressive plan in theory.”
You can outsource your financials if you are not a numbers guru, but that doesn’t mean you can abdicate the responsibility you have to understand what they mean and to ensure that they are accurate and reflect a real, possible business path.
“The high incidence of business failure within the first year points to a serious lack of financial knowledge among most budding entrepreneurs,” says Diederichs. “Cash flow forecasts and financial planning are two key elements in business survival. In fact, most of your time and effort should be spent on the financial model for the business.
Entrepreneurs should understand their finances inside out – those who do may well hold the key to success and prosperity.
To give you a simple example: Take a coffee shop business. A basic calculation shows that is would need to sell 8 000 cups of coffee per month just to break even. In many instances this simple mathematical exercise is not done and the business fails as a result.”
This is where most plans gloss over the nuts and bolts reality, according to Feinstein.
“Make sure you identify the five top operational success factors for the business (such as keeping spare parts in stock), and explain how you are going to handle each one on a practical level. Remember, things don’t happen by themselves.” Diederichs concurs.
“Your operational plan is merely a comprehensive monthly or daily plan of action that spells out what has to be done in terms of sourcing stock and selling it.”
For an operational plan to be successful, he adds, everyone in the business must know exactly what is expected of them. One way of ensuring this is to have a briefing session in the mornings and a debriefing session after the close of day.
[box style=”grey map rounded shadow”]
Everything you need to know about an operational plan. Click Here
This will help you assess what worked on any given day and what didn’t. It is also an excellent way of getting staff together for motivation and training purposes.”
Your marketing plan should include a sales strategy, advertising strategy (pamphlets, signage, media advertising, PR), and a promotional strategy.
Marketing represents a client or customer’s holistic view of your business. It is therefore of paramount importance not to ignore your marketing processes.
“Because media advertising can be very expensive, entrepreneurs should plan carefully,” says Diederichs. “It will affect their business budget, or may prove to be a costly exercise if the wrong media is used. One way to overcome this is to at first only advertise in your local media which is cheaper than regional and national media. But ensure that you reach your target market. Don’t spend loads of money on something that doesn’t generate an income.”
Be different and come up with novel and cost effective ideas that will draw shoppers to your business, he adds. If you lack knowledge in this area, speak to an advertising agency or PR consultancy.
Feinstein advises against big ad campaigns, billboards and radio ads unless you have the money. “Think smart: leaflets, SMS marketing, direct selling. It’s all about getting the message to your prospects, not the entire population of the country.”
Soliciting Constructive Criticism
On asking for constructive criticism and making necessary adjustments, Feinstein is unequivocal: “Yes, yes, yes. A real entrepreneur will always be receptive to a better way of doing things.
Don’t be afraid to copy (legally), there’s nothing really new under the sun.” Discuss your business plans with your family and friends and listen to their advice. You don’t need to take it, but it’s always good to have a sounding board and a different perspective.
Involving a Mentor
A word of caution from Diederichs: “Mentors are great, but too many people use them as a crutch. No-one is going to make it all come together except you. And make sure your mentor has run their own business for at least 20 years before you take their advice.”
Dead in the Water: Don’t Do This…
A smart business plan demonstrates your ability to clearly communicate a unique business concept and growth strategies in a document that gives the funder confidence that you can easily sell this concept to your market. We spoke to two experts who advise that you avoid these common business plan blunders.
- Be accurate, be thorough, be different
André Diederichs, SMME specialist at Old Mutual, sheds light on the areas where many entrepreneurs fall short.
Consider the role of a business plan. It serves as a window through which the entrepreneur allows interested parties a bird’s eye view of the prospective business.
The plan must therefore be an accurate and comprehensive reflection of the business – in fact, it must act as a blueprint of the operational mechanics. With this in mind, here are some of his don’ts:
- Be long-winded and boring. A plan should reflect the energy, insight and excitement of the entrepreneur
- Show limited financial forecasts. This may show a lack of, or limited understanding of the intended venture.
- Give an unprofessional presentation.
- This means you are paying no attention to detail which is necessary in business. For presentation purposes, you may need to employ a professional graphic designer for help.
- Spend too little time on the promotional aspects for the business. In other words, you have little or no idea how you are going to advertise/promote or market your products and services. Your plan merely reflects what others have done in the past and shows no imagination. Your advertising/marketing plan has nothing new to offer and you are not thinking out of the box.
- Display limited marketing intelligence. How can you expect to capture a particular market if you have no idea of what your competitors are doing? Perhaps a headline: What separates my business from the next and then list the differentiating factors showing a novel approach that will give you a competitive edge.
- Show poor profiling of products and services. Your in-depth knowledge of your products should jump off the pages in your business plan.
- Show disregard for your business plan. It should be a dynamic working document and a guideline to managing your business that is regularly revisited and updated
- Don’t cut corners
Charmaine Groves of Old Mutual’s Masisizane Fund advises thoroughness:
- Do the research as it helps you think through all the issues necessary for your business to be successful
- Use a consultant to guide you if you need to, but insist on the consultant transferring skills to you, as you need to understand the key drivers in your business and potential funders will pick up that you do not have a good understanding of your business dynamics if the business plan is written by someone else without your input and understanding
- Network with others in the same industry sector to learn about potential pitfalls
- Find out what the requirements are of the funders that you want to target and ensure that you address those
- Always be honest and transparent. Be clear about the funding the business requires and what it will be used for – don’t inflate the amount required, but don’t under-quote either
- Include any non-financial support that your business will need (financial education, accessing new markets), especially if you are planning to apply to development financing institutions, as most of them provide additional services that you may not have to pay for and that can reduce your business expenses
- Make use of government agencies like SEDA, which have been established to assist you
- The Business Place also provides support and resources to help with business plans and are in most major centres.
- The Terrible Top Ten
Martin Feinstein, programme director of the National Business LaunchPad, lists his worst mistakes that entrepreneurs should avoid when compiling their business plan:
- Overestimating sales in the first year
- Underestimating costs and overheads in the first year
- Confusing the opportunity to sell with the reality of making sales
- Neglecting to accurately price inputs and raw materials
- Planning to buy assets (vehicles, equipment) instead of leasing
- Planning on being profitable in year 1 when in reality it will take longer
- Including too much unnecessary detail that will distract a funder from your core plan
- Not being specific about how much your margin is and where it is
- Going on about job creation and social upliftment when your first priority is to survive
- Spelling mistakes that tell the reader you are sloppy
- Pitch Perfect: Do This…
Giving information is vital but the trick is to tempt possible investors with just enough of the ‘right stuff’ to whet their appetite without overdoing it.
- Win them over with the right elevator pitch
An elevator pitch is a compelling overview of your business.
[box style=”grey map rounded shadow”]
Five Mistakes to Avoid When Pitching Investors. Click Here
The pitch should be concise, carefully planned and well-thought out. It must be so clear that your grandmother would understand what the business is about in the time it takes to ride up an elevator (less than two minutes).
“What you are looking for is the essence of the business and importantly the link to why you would want to invest. This would include the link to your ‘fund mandate'”, explains Julia Fourie of HBD Venture Capital.
- Executive summary is key
In the early stages, send a 1-2 page executive summary. The executive summary spells out the nature of the business with the high points only.
This should include your strategy, key competitors, markets you’re targeting, financial projections in summary and a brief description of management backgrounds.
If you’re comfortable, also list some of your customers because that is an important selling point. Investors are used to making decisions based on such information and you should give them no more than that until you’re comfortable with them.
- What the investor wants to hear
Investors want to see your long-term thoughts, even if these are only educated guesses. A strategic plan is a test of your vision and your ability to plan ahead. You need facts to back up your claims.
List all existing and potential competition. Investors will probably know about your competition, so you might as well come clean. Focus on why you’re different, and why you are better than the competition. Outline what comes next.
Make sure you have something else on the drawing board to show continuity. Investors are also looking for passion, commitment, charisma and leadership skills.
- Pitching and presenting the idea
Nothing impresses more than an entrepreneur who is focused and knows his or her business inside out.
Know your products, know your competitors, understand your customer profiles, know your financials – prepare well if you want to sell the strong points of your business to your audience.
Old Mutual’s SMME specialist André Diederichs advises the following:
- Ask family members or friends to comment on your business plan
- Implement any changes and ask a knowledgeable person to edit the copy Remember, nothing says unprofessional more than a business plan full of spelling errors
- Consider using an accountant to help you to compile realistic financial forecasts. Remember, bank managers deal with applications daily and will easily be able to detect any attempts at guessing the financials
- Making the layout clear
On the actual layout and presentation of the plan: “Keep it simple. White A4 paper, a simple 12-point font like Arial, numbered pages and as short as possible.
I have seen fantastic business plans that are all of five pages long, and terrible plans that are 50 pages long. Write it on a ‘need to know’ basis,” advises Martin Feinstein of the National Business LaunchPad.
“The biggest mistake people make is to oversell – they want to tell the whole story in the first meeting. Don’t. Tell just enough of the story to show that you know what you’re talking about and are going to make it work, with or without the investor.
When you’ve pitched enough to intrigue the listener, stop talking and let them think and ask questions. You want to be at an intersection, not going down a one-way street.”
- Getting your plan in front of the right people
Neither financial institution nor private investors will consider investing in your business unless you have a business plan that has the potential of generating profits over long periods of time.
You need to identify these so-called “right people”, says Diederichs. “Perhaps it’s your own bank, as you may already have a relationship with them.
Other organisations that you may consider approaching include Business Partners. You may also approach wealthy people who are interested in new profitable ventures to join you as an equity partner.”
Feinstein offers a simple bit of advice: “Enter business plan competitions. Keep a copy in your briefcase at all times – you never know. Use Facebook and LinkedIn. Use your network. And when you present it, remember that the business is just a tool – they’re buying into you.”
- Keep Your Cards Close to your Chest
Confidentiality agreements, or non-disclosure documents as they are also known, protect sensitive technical or commercial information from disclosure to others.
If information is revealed to another individual or company after a non-disclosure agreement has been signed, the injured party has cause to claim a breach of contract.
The type of information that can be included is virtually unlimited – data, know-how, prototypes, engineering drawings, computer software, test results, tools, and systems and specifications. The purpose of a confidentiality agreement is to protect the idea so the entrepreneur can patent it later; the agreement should cater for that.
Typical things to include in the confidentiality agreement would be the duration of the agreement – in other words, when it expires. Also spell out what a breach of the agreement would be, and what the consequences are – don’t forget to define the parties carefully.
Keep It Simple: How To Write A One Page Business Plan
Lengthy business plans are a thing of the past and there are sound business principles for why.
A Beginner’s Guide to Growing Your Business With Google PPC Ads
Google PPC Ads inform you where customers are engaging with your ads, and where they’re getting no traction.
You’re the owner of a business, and you want to learn how to grow your business with PPC advertising on Google. You’ve made a smart choice. There’s only one king when it comes to search engines, and that’s Google. Pay per click marketing or PPC is one of the wisest ways to promote using the power of this search engine.
When you understand how Google’s advertising platform works and how it can benefit your company, if you utilize it correctly, you will likely see significant and positive changes in your revenue.
What is Pay Per Click or PPC?
So, what is PPC? It’s a form of Internet marketing. You set up an ad online, and each time a visitor clicks on your ad, you’re charged a fee. Placing your ad on the powerful search engine Google, through the use of Google AdWords, is the most well-known kind of PPC advertising.
If you set up your campaign in the most efficient way – targeted keywords, compelling ad copy, an attractive and effective landing page, and more – the amount of money you pay for clicks on Google will be minimal compared to your profits.
For example, if you pay R10.00 for a click that leads to no sale, you’ve lost R10.00. However, if you pay R10.00 for a click that leads to a R2000 sale, based on your effective marketing on Adwords, you’ve gained R1990. Let’s say the cost of your product or service is R400, that means you still made R1590. That’s money in the bank.
How Does Google PPC Advertising Work?
Google pay per click is accomplished through the use of Google Adwords, released in the year 2000. Google decides what ads will show based on what is known as Ad Rank. This determination looks at how much an advertiser’s CPC or cost-per-click bid is.
It also looks at the advertiser’s Quality Score, which is comprised of the click-through rate of the ad, the relevancy and the quality of the landing page.
Therefore, one of your primary jobs as an advertiser on Google is to set up your campaigns in a way that will work out favorably with Google’s Ad Rank determination. It’s not at all impossible with enough patience and diligence to succeed with this method.
What are the Benefits of Starting a PPC Campaign?
The advantages to starting a pay-per-click campaign on Google are many and below are just a few of them!
1) Google is King
Because Google is the top search engine or the one that is most used, advertising on the platform can be hugely beneficial. There are over three billion searches on Google every day of the year. Therefore, the number of impressions and clicks you can receive for your ads has the potential of being huge, and that can lead to significant conversions and sales.
2) It’s An Effective Way to Get the Word Out About Your Business
You’ve started a business that you’re proud of, but if people don’t know you exist, how will your business make money? Having a website or a blog on the Internet is often not enough, especially if you’ve done no advertising.
Potential customers need to know what products or services you provide and how they will benefit from what you provide. Advertising on Google is one of the best ways to accomplish that goal.
3) There’s No Wasting Time with Guesswork
Google AdWords is a system that allows you to take the guesswork out of advertising. You have the tools to determine how effective your keywords, ad copy, landing page, etc. are for your advertising goals.
You’re also provided with targeting tools that better allow you to reach the kind of customers you want based on things like distance, cities, regions, or countries.
You’re given results of how many people have seen your ads, how many people have clicked your ads and tracking tools that tell you when those clicks have turned into actual conversions or sales. Guesswork never has to be a part of this advertising platform.
4) You Control When a PPC campaign on Google is Running
You’re in control of when your ad is running on Google. You can start it, pause it, re-start it, or stop an ad whenever you’d like.
How Do I Set Up My First Google PPC Campaign?
How does pay per click work with Google Adwords? Follow these steps to set up your first Google PPC campaign.
1. Create a Google Account
You will need a Google account to advertise on Adwords. If you don’t already have a Google account, go to Accounts.google.com/signup and create one. When you have a Google account, head on over to Adwords.google.com and sign in.
2. Name Your Campaign
There are various categories that you can choose for your campaign. According to Google, “Search Network with Display Select” is the best opportunity to reach the most customers. Then you’ll need to come up with a name for your campaign.
Choose an organized naming system that allows you to identify each of your ads quickly. Select your location as well as the language that you’re targeting.
3. Choose Your Budget
You should always have a budget when working with AdWords, especially beginners. For example, a budget of R50 to R150 a day is a good starting point. That gives you enough money to play with keyword pricing.
If you bid too high, you’ll blow throw you initial monthly budget. For each keyword, choose to start with an average bid of R10.00.I suggest you start small with your budget and gradually scale up.
Ad extensions can also be included at this stage. You can extend your ad with location information, phone numbers, or site links.
4. Choose Your Keywords
Crucial parts of your AdWords campaign are the keywords. What are keywords?
They are topics that describe what your content is about. They are also the words that people type into Google and other search engines. So, if a person is looking for a wedding photographer in Johannesburg, he or she may type in the Google search bar “wedding photographer Gauteng,” for example.
After those words are typed in, the wedding photographers in Gauteng who have a presence on the Internet, such as with a website or a blog, will show up. From there, the person searching can do their research.
The more relevant your keywords in your AdWords campaign, the more likely your ad will be displayed predominantly (page one or two for your keywords) on Google for your target customers.
Without these relevant keywords, the people who you want to see it will never see your ad. The keyword “wedding photographer” is broad and is not enough to reach customers in Gauteng.
You can only create targeted keywords if you fully understand your niche and your audience. What are you offering and who are the people you’re offering it to?
These are two questions that you must be able to answer. You’re located in Gauteng, and your customers live in the area, but what other factors are relevant? For example, do you offer traditional wedding photos taken anywhere in Gauteng or only on Johannesburg?
If you were a Johannesburg wedding photographer, the keyword “Johannesburg wedding photographer” is better targeted for your niche than “wedding photographer” or even “wedding photographer Gauteng. A keyword such as “photographer” is a broad keyword. It’s popular, and it has a lot of competition.
A keyword such as “Johannesburg wedding photographer” is a specific keyword otherwise known as a long-tail keyword. It’s less popular, and there’s a greater chance that your business will be seen using it. Choose both broad and long-tail keywords in your campaign, with a focus on long-tail keywords.
How To Find the Perfect Keywords for your PPC Startegy
1) Think About Your Niche and Write Down the Keywords That Come to Mind
Look at your website or blog for ideas. Also, consider what your customers would type into Google’s search bar if they were looking for your niche.
2) Use the Keyword Planner at Google AdWords under “Tools.”
When you enter in a keyword, the planner will return similar keywords, and it will tell you how many people search the keywords. Make sure you consider the advanced options as well; such as where you’re located and what language you want to target.
The results will tell you what the average monthly search is, what the suggested bid is, and what the competition is. For example, “wedding photographer Johannesburg” may return with a monthly search of 20 000 searches or so, with a suggested bid of R15 and may have low competition.
Your goal is to find keywords that receive enough searches but that your business has a chance to compete with. You’ll need to determine if your maximum cost per click matches up with or exceeds the estimated cost per click displayed by the tool.
5. Create Your Ad
The creation of your ad content is another important step in the process. It’s imperative that you understand your unique selling proposition or USP. It’s what makes your service different from other sellers in your area.
Your ad should convey the product or service that you’re offering, and it should have a call-to-action such as “learn more” or “buy now.” You will have 170 characters to work with, which include the headline, description, and URL.
Your headline is the most significant part of your ad, followed by your description.
It’s also advised to have a strong display URL. Instead of just inserting your standard URL, you can change the domain name that you would typically include in your ad to something more effective, such as your call-to-action statement, for example.
Think about your customers and consider creating more than one ad when setting up your campaign, or split ad groups. These ad groups are more targeted and more relevant than one ad designed to reach all your customers.
So, using our Johannesburg wedding photographer example, your first ad can be designed to target brides who wish to get married in Johannesburg.
You could create another add that targets parents who want to treat the bride and groom to a Myrtle Beach wedding photography package. You could create another ad that targets both the bride and the groom. Get creative and think outside the box.
6. Set up a Landing Page
Landing pages are content on the web that has a particular purpose. Their goal is to get information to convert a visitor into a customer. Landing pages have specific content along with one call-to-action button.
The CTA button can be hooked up to getting subscribers to your mailing list or to booking consultations, for example. You can have more than one landing page for each of your ads, to get even more targeted for customer conversion.
There are many ways to make a landing page. Look to sites such as Leadpages or Instapage for user-friendly ways to make affordable landing pages.
7. Track Your Ads
Converting a click into a sale is your number one goal with any PPC ad. One tool that you’ll want to use is conversion tracking. This tool measures sales once your ads are clicked.
It helps you to determine which keywords are working for you and which keywords are not. You can use the conversion-tracking tool provided by AdWords, for example.
You’ll be given a code to attach to your order form, or receipt page, or whatever your final page is that lets you know you’ve got a sale. Therefore, these tools only work if you conduct your sales online.
Also, utilize techniques such as A/B testing. This is where you create two different landing pages for the same amount and kind of traffic.
Determine which landing page works best and ditch the other one.
Now that you know how to set up your first ads on Google Adwords, don’t delay. Get started on researching the keywords so that you can create your first ad. With practice and monitoring, your business can benefit greatly from this powerful tool.
5 Ways To Hack A Business Plan
Bullet points are your best friends, and other tips for not getting caught in the weeds of business-plan details.
Whether you’re building gadgets, selling software or starting a nonprofit, your starting point is a vision, which gets turned into a plan of action.
In business, your plan is the road map that will help you pinpoint the answers to some of the most important questions pertaining to your venture:
- What are you selling?
- How will you make money?
- Who will buy it?
- How will you reach those customers?
Writing a business plan may sound daunting, but it doesn’t have to be. It can be fun! Throughout my career I have launched dozens of successful products – and each one began with some level of business plan. Because I have a lot going on, I never want to invest too much time in the actual writing of these plans, preferring to spend my time instead on the actual strategy.
So, how do I pen my own business plans? I hack them, and so should you. Here are my five business plan hacks:
1Start with a business model canvas
I strongly recommend that you begin with a business model canvas (Steve Blank’s blog is a great resource), especially if this is your first time writing a plan. It’s a tool for designing, inventing and thinking strategically about your company – all on one page.
The exercises will help you identify the resources you’re going to need and define the customers you need to approach. It’s a cool and effective way to brainstorm all of the key considerations when starting a business.
2Keep things simple, with bullet points
Once you’ve completed your business model canvas, you’ll have a much clearer vision of what you’re going to do, how you’re going to do it, and the people you’re going to serve. You then get to turn your canvas into the plan.
Business plans are more thorough and detailed. You will need one to share with investors if you want to raise money.
There is a section for each major area of consideration: Product description, target market, sales, marketing, operations, team, etc. You’ll want to address the who and how of each component of your business.
- Who’s handling our marketing activities?
- What channels will we use for getting the word out?
- What activities will be performed in each channel?
Thorough doesn’t need to be lengthy. Too often, entrepreneurs lose the forest for the trees, and get hung up trying to draft carefully worded prose.
Start by just getting your ideas down on paper in raw form as bullet points in each area. You can worry about making them sound good and organise them into paragraphs later.
After you write your ideas down, solicit feedback from your advisors, using a bullet-point form. This is will save you time integrating suggestions before you lock in careful wording.
3Focus on differentiation where it counts
As you write your plan, think about what will make both your company and product or service distinct from your competitors’. You’ll want to capture your unique offering, and your business plan should emphasise this.
The good news is that while your offering should be different from your competitors’, many key elements of your business plan don’t have to be. You don’t have to reinvent the wheel or try to be different in every area.
For example: When it comes to your customer acquisition strategy or your logistics platform, you can do what everyone else is doing as long as there is no competitive advantage readily available.
Related: Free Business Plan Template Download
4Don’t overdo it on cash-flow projections
It’s easy to get caught in the weeds when you’re trying to create accurate cash flow projections.
The purpose of your cash flow and profitability projections isn’t necessarily to show exactly what’s going to happen; it’s to show how, within reasonable circumstances and success, your business is positioned to make money and can afford to keep the lights on.
Your projections’ purpose is to help you test your assumptions about profitability, not predict the future. So, you need to invest time in them, but you don’t need to go crazy trying to be perfect. Make your assumptions, declare them and proceed.
5Hire a writer
There are parts of your business plan that cannot be outsourced. Only you can decide what you’re going to do and the people you wish to serve. Thankfully, writing your business plan text isn’t something you need to do yourself.
Once you’ve completed your canvas and the high-level bullet points for the major sections of your plan, consider hiring a business writer if you’re short on time or hate writing.
Such people are relatively affordable and easy to find. I recommend checking out Upwork or Freelancer. You can then go back and forth with the one you hire, to get it just right. This can save a tremendous amount of effort.
The hacks I’ve detailed above are designed to help you save time and focus on what really matters, such as identifying your customer segments and understanding how your business will make money.
Related: Free SWOT Analysis Template
Once your business does start operations, things will likely shift anyway, so be efficient in spending your time on this task. If you treat the writing as a fun brainstorm on a living document rather than a daunting exercise, your effort will be inspiring!
This article was originally posted here on Entrepreneur.com.
Women Entrepreneur Successes1 week ago
Watch List: 50 Top SA Business Women To Watch
Snapshots1 week ago
25 Of The Most Successful Business Ideas In South Africa
Support for Women Entrepreneurs2 weeks ago
11 Quotes On Hard Work, Risk-Taking And Getting Started From Beauty Billionaire Estee Lauder
Entrepreneur Profiles2 weeks ago
The House That Moladi Built – How Challenging Traditional Building Empowers Local Entrepreneurs
Lessons Learnt5 days ago
How Lorenzo Escobal Bootstrapped His Way To Competing With Titans And Attracting Top-Tier Clients
Leading6 days ago
How To, In Practice, Distinguish Between Executive, Non-Executive And Independent Directors And Their Functions
Entrepreneur Profiles7 days ago
In Touch Media’s Margie Carr Shares How She Made An Out-Of-Home Media Agency A Solid Competitor
Company Posts1 week ago
Smoothie Franchise Opportunity: Puré Frooty Is A One-Of-A-Kind Smoothie Franchise Business