Traditional competitor intelligence (CI) theory suggests that an investigation into a competitor business will analyse four aspects of its behaviour:
- Management assumptions
- Strategies and tactics
My experience is that to make this exercise more meaningful and valuable for small to medium size businesses, you need to be very specific about the kind of information you are looking for. Here is my checklist of the top ten things you need to find out about your competitors. The items on this list are more clearly defined and more understandable than in traditional CI theory.
These items can therefore empower you, the business owner, to know what to look for when you embark on this exercise.
Related: SWOT Analysis Template
This list is fairly extensive and most small to medium sized businesses do not have the resources to vigilantly track each of these areas explicitly for up to five competitors. You need to ask yourself which of these items is most central to competitive advantage in your industry. Select the three to five that are core, and proactively monitor those areas.
You can be more reactive when it comes to the other items – assessing them as and when you become aware of new information.
What do customers think of competitors relative to what they think of you?
Customers are the most important source of marketing for any business – there is nothing more powerful than word of mouth. If customers are raving about what your competitors are doing, there is good reason for you to find out why. On a recent business trip to Cape Town I stayed at a particular B&B for the first time. Over breakfast the owner and I got chatting. He asked:
- Did I travel to Cape Town often?
- Where did I usually stay?
- Why had I switched on this trip?
- What did I think of the other places I had stayed at?
It was not vindictive or intrusive, but it was a very clever gathering of competitive intelligence. I compliment him for it.
What new products or services have your competitors launched or are planning to launch into the marketplace? How do these compare with your offering?
New products and services are potential sources of competitive advantage for competitor firms. To respond to new competitive advantages you need to first be aware of them and then assess how great a threat they are. To assess the danger, observe customer responses to the new product or service, take cognisance of what the media is saying and potentially try the product or service yourself. Some of the first people to buy an iPad were Amazon employees who were responsible for the Kindle.
3New Distribution Channels
What new distribution channels are your competitors using to get their product or service to customers? Will these new channels open new markets? Or will they steal your customers?
Over the years, finding new distribution channels has often been a way of opening up new markets. Amazon transformed the book industry by using the Web as a distribution channel; Tupperware was successful because it found an untapped distribution channel through parties in people’s homes. Only by being aware of how competitors are utilising new distribution channels can you respond adequately.
Related: Competitor Analysis Example
What property, plant or equipment have your competitors acquired and how are they planning to use it? Will this provide them with new competitive advantages?
The acquisition of large-scale assets is often a sign of things to come. By monitoring what competitors are buying, you can pick up signals that they are expanding capacity, changing processes or potentially going to launch a new product or service.
How are your competitors promoting their offering? Has it changed? How are potential customers responding?
Promotional efforts are one of the easiest competitor elements to observe because they are usually in the public eye. When I worked at a large accounting firm one of the other big accounting companies started promoting their brand on TV during rugby matches. This was unheard of in the industry and created a stir in the organisation.
The marketing people responded very sensibly. Instead of looking at what sport they could sponsor, they did an extensive survey to assess the impact of the advertising; they discovered that rugby sponsorship had almost no impact on their clients’ decisions about which accountant or auditor they would hire.
It did, however, have an impact on the decisions of accounting students about which firm they would join. As a consequence, they were able to put processes in place to counter this threat. By observing the change, interrogating its effect and responding appropriately they made some very wise and effective tactical moves.
How have your competitors adjusted their prices? How are customers responding?
Price is both an important and a tricky component of the competitive equation. It is therefore vital to always be aware when your key competitors change their price. When you observe a price change consider whether it is sustainable, ask what signal this is sending to customers and carefully interrogate what effect price has in your sector of the market.
In a commoditised market lower prices may offer some sort of competitive advantage, but most small and medium sized businesses are not competing on price; instead, they compete on customer experience and/or product differentiation. Therefore, by entering into a price war with competitors you may be going down a slippery slope, sucking the entire margin out of your business without ever really setting yourself apart.
7Acquisitions and Partnerships
Have your competitors acquired a stake in another company or entered into a partnership with another enterprise? What might come of this acquisition or partnership?
When Google acquired YouTube, it was a signal that the organisation was getting serious about online video. When a publishing company partners with a software firm, this means it’s probably getting serious about online delivery and ebooks.
Acquisitions and partnerships are a quick way to acquire skills and technologies for major strategic moves. Keep track of where and when they are happening. Many acquisitions are reported in the local business media. You may also hear about them via the industry grapevine, which can serve as a key source of information on competitor acquisitions and partnerships.
Are your competitors experiencing improving or declining revenue and profitability?
In the case of private companies, specific information on financial performance can be difficult to obtain. Private firms have no requirement to report their results to the public. Yet, general information on trends in revenue and profitability is often more readily available. A CEO will allude to the fact that a firm is doing well in a local media report; if a firm is laying off workers, that’s a sign that cash flow and profitability are under strain. Although you often can’t obtain specific revenue and profitability numbers, you can infer enough from public sources of data to keep adequate tabs on your competition.
Have your competitors recently hired or lost talented people? What roles do these people perform? What is this likely to mean for their business?
In a small and medium sized business, one person can make a huge difference. An advertising agency which hires a respected new creative director can acquire new competitive advantage in winning clients. When a law firm loses its litigation specialist, this may signal that the firm will no longer effectively compete for litigation work.
People equal advantage and, therefore, being aware of people movements is critical. These movements are also quite transparent; people can’t hide where they work and the industry grapevine is often effective at spreading the news quickly. As a vigilant business owner you just need to be conscious of when this news is of relevance to you and consider what it means for your business.
How have your competitors changed their key processes? What effect is this having on their customers’ experience and their profitability?
Process improvements can change a customer’s experience. They can result in on-time deliveries, answered telephone calls, shorter queues and more effective products. Many times process improvements will be preceded by new investments and succeeded by changing customer perceptions, but understanding the link between the investment and the change in perception can help you assess why a competitor is gaining the upper hand and how you should respond.
In the past 20 years, information has become more ubiquitous. The process of finding data is easier but also potentially more confusing. Try these effective and inexpensive ways of gathering competitive intelligence:
With Google News (news.google.com), news stories on competitors have become very easy to track. You can simply search past news stories and sign up for alerts about news stories related to your competitors as they break. Another secret about following competitors is that some of the best news sources are often local newspapers that cover local companies – they often get rich data and report it in great detail because of the local interest element.
Nowadays almost every company has an online presence. Just by regularly checking competitors’ websites, you can track developments in the organisation. Often there are other companies reporting on your competitors – for example, many customer experiences in South Africa, good and bad, are reported on customer service site Hellopeter.com.
Finally, just by doing a Google or Bing search on your competitors, you can see which other sites refer to your competitors, reveal key alliances, networks, suppliers and customers.
If you operate in a consumer-orientated industry, there is no harm in becoming a customer of your competitor to figure out what they are doing and how you can differentiate yourself. Shop in their store, attend their public seminars, call them for a quote or eat at their restaurant.
When I work with business owners I am often surprised by how few of them do this. It is such an easy way of getting to grips with what competitors do well and what they do badly, yet very few people take advantage of it.
Earlier, I referred to a casual conversation I had with a B&B owner in Cape Town in which he subtly assessed why I had not stayed with him in the past, what I thought of the other places I had stayed at, and what he did well or badly relative to his competitors. Easy conversations with new and old customers can tell you so much about how you are perceived compared to competitors.
Checking with employees
Frontline employees often see, hear and experience things about competitors that people back in the office would never know. Are you giving your salespeople, customer service reps and account managers the chance to share, contrast and consolidate their insights about competitors?
A simple monthly meeting in which employees are encouraged to provide insights about competitors from their frontline interactions can be a gold mine of competitive intelligence.
How Do You Use This Information When You Have It?
Information about competitors should not drive your strategy. It should merely be one of the data points that you consider when setting your strategic goals. It can also affect your day-to-day tactics in implementing those goals. The best way to explain this is by example: let’s assume you have some IT skills and you want to set up an IT business.
You assess the market and see that there is no one providing quality IT services to mid-sized manufacturing businesses in a particular area. Your competitive intelligence helps you discover that there are many one-man operations serving small companies on a relationship basis, as well as a few large players looking for annual contracts that run into the millions.
The big players sometimes sell to the medium sized firms, but they offer them limited personalised attention and ongoing support.
By gathering this competitive intelligence, you discover a gap in the market for a company with a team of customer-orientated technical professionals offering personalised IT services to medium sized manufacturing businesses. You will distinguish your business on the level of service and the scope of projects that you take on. Over time, a few of the one-man operations join together to replicate what you have done. You pick this up by scanning the news, talking to customers, and gathering data from your frontline IT professionals.
This influences your strategy & tactics:
- On a tactical level, you encourage your account managers to spend more time with customers and incentivise them to renew their contracts with existing clients.
- On a strategic level, you decide to embark on a
- Project to create new mini software programmes for your clients.
Because you have been close to them over the past few years you have understood their software needs and you can create programmes to fill the gaps where there are no off-the-shelf solutions to deliver what they require. By creating these programmes you can charge them more for services and retain them as clients. The recently formed new firm of consolidated one-man operations has no similar software to fill gaps for clients.
Your competitive intelligence told you that your current point of differentiation was being challenged, so you decided first to reinforce what you currently have by renewing contracts, and then to build a new point of differentiation. This is how successful companies compete – using competitive intelligence to inform the process.
You Need to Know This – Very Important Advice: A SWOT analysis is important, but it’s not enough. You should also run a Market Analysis:
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.
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.
Burn Your Business Plan
There was a time when business plans were anything from 75 to 100 pages but today 10 to 15 can be considered too long.
If you’re hungry for your piece of the business pie but don’t exactly want to spend a couple months playing hit and miss with investors and potential customers then a one page business plan could be the answer you’ve been looking for.
Being able to simplify your business concept is a useful skill to have and it was Alexander Osterwalder and Eric Reis who decided that we should stop taking the long way around when it comes to business plans and product development.
“Founders go wrong when they start to believe their business plan will materialise as written. I advise entrepreneurs to burn their business plan – it’s simply too dangerous to the health of your business.” Alexander Osterwalder
The New Business Model Canvas Approach
Osterwalder created a model consisting of nine building blocks, which once put together give you an overall picture of your strengths, weaknesses and how your business functions. It can be used in your business plan as well as assist you with strategy and innovation in the future.
It consists of the following parts:
- Customer Segments: Who are your mass and niche markets?
- Value Proposition: What are you offering and why are you different?
- Channels: Look at the phases your product goes through. This is everything from awareness and distribution to after-sales service.
- Customer Relationships: How are you building relationships with customers and is it working?
- Revenue Streams: Look at what you are charging and if you could be charging more. How are you receiving your payments and does it contribute enough to overall revenue?
- Key Resources: What resources do you require to function? These can include physical, human, financial and intellectual.
- Key Activities: Ask yourself what activities need to take place in order to deliver on your value proposition?
- Key Partnerships: Write down who your key suppliers and partners are and how they contribute to your overall goals.
- Cost Structure: Look at fixed and variable costs so that you can see what can be improved upon.
If you feel that you would like to start planning your business using this method then Leanstack is a helpful tool.
The Lean Start-up
Three years after the business model canvas was developed, Eric Reis introduced the learn start-up concept and again, many were hesitant to try it out. However, after it proved successful time and time again it fast became a logical way to develop products in our ever-evolving and demanding society.
“Don’t be in a rush to get big, be in a rush to have a great product.” – Eric Reis
The idea behind the lean start-up is that instead of spending months developing a product/ business concept only for customers to reject it, entrepreneurs should instead focus on experimentation, innovation and feedback. The lean start-up simplifies the early stages of entrepreneurship by eliminating long development times and the need for large amounts of funding and instead building companies and launching products a lot quicker.
“The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model. Settling on first ideas risks the possibility of missing potential that can only be discovered by prototyping and testing different alternatives.” Alexander Osterwalder
The below video will give you a good idea of what the lean start-up is all about.
Related: What is The Lean Start-Up Movement?
Why Experts are Advocating a One Page Business Plan
With simpler, to-the-point methods becoming the norm, many entrepreneurs have turned to 1 page business plans in order to get their businesses off the ground faster instead of opting for a detailed and time consuming approach. In case you had any doubts, here are the advantages of a one page business plan:
- Since your ideas are changing all of the time, it’s easy to update
- It provides clarity to whoever is reading it as important information sticks out
- It’s a good way to generate interest around a business concept
- It will assist you with your pitch
- It offers a more affordable approach to product testing and development
- It helps get your entire team onboard with the company vision and goals
- With the plan having very specific goals you can create a straight forward strategy around each of them
- It eliminates the need to find an excuse not to plan and grow.
“Once you understand business models you can then start prototyping business models just like you prototype products.” Alexander Osterwalder.
How to Prepare a Business Plan
There are many different ways to structure a business plan but the most common/effective sections to include are:
- Vision. Your vision should get you fired up and be short and to the point. Talk about what you are building.
- Mission Statement. Your mission statement will describe what you do, what your product/service is and who your customers are.
- Objectives. Next you can jot down your business goals for the next week, month or year.
- Strategies. Provide some insight into how you plan to achieve your objectives.
- Action Plan. Explain the steps you will take to action your strategies and remember to add dates to these items to give yourself a deadline.
Business Plan Example
Download this business plan sample to see exactly how you would layout and word your own plan.
Test-drive Your Business Plan Hypotheses
Now that you have your business plan, here are three simple ways that you can use it:
- Use this simplified plan to pitch investors. It goes hand in hand with your elevator pitch.
- Test drive your thinking. Get out in front of as many potential clients, partners and suppliers as possible. In presenting and discussing your offering with them you will receive immediate feedback. This kind of first-hand market research will be invaluable as an early indicator as to whether or not your business plan is on track to becoming a profitable enterprise.
- Review your plan on a monthly basis to see if you are still on track and revise if need be. It’s also easy to change things up if you decide a certain product or process is no longer relevant to or working for your business.
- Share the business plan with your management team so that you’re all working towards the same goals
- Find out more about the investor you are pitching to make sure that they don’t prefer more detail in a plan
- Do enough research to validate your objectives and strategies. You need to be able to answer any questions about your idea, your market and your finances.
- Pair your business plan with your business model canvas to give investors and your team a better idea of how the business will work
- Use the plan to build yourself and your team a to-do list
- Consider the lean start-up model if you are developing a new product or service offering and are unsure about whether it’s what your customers are looking for.
Feel the Need to Elaborate?
If you feel that a the business plan is not enough to get your business started then there is the option of writing a longer, more detailed business plan without drowning in countless pages.
You can download the business model canvas worksheet here and start building your own or if you want more information on this model you can watch the below video.
Click here to view the format of a full length business plan.
Click here to download a business plan template.
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