A good start up business plan is essential to succeed in the business world. Many entrepreneurs are very optimistic during start up and few consider the potential challenges that the business may face causing it to fail. This is why 90% of business start-ups often fail. Having a detailed and comprehensive business start up plan will ensure that you are prepared for the successes as well as the failures that come along with setting up a business.
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Chose the right product for the market
One of the biggest mistakes that entrepreneurs make is creating a product without market demand. These are the kinds of businesses that are out rightly headed for failure right from the start. About 42% of entrepreneurs whose businesses failed confirmed that lack of market need for the product was the only reason for the failure. It is advisable to conduct a comprehensive market research, identify the gaps in the product market, and know what the competitors are making and how to beat them out before starting production of the product for the market. Creating the right product for the market is the first step to a successful business.
Outline the business process
You may have a team of technical experts and a great product idea for the market but a successful start up relies on a good understanding of the business process. There are many protocols involved in the conversion of a great idea into a real market product. Many entrepreneurs, who have failed before, overlooked the key aspects of the business process. As the entrepreneur and the person with the idea, you may think it is your job to lead and segment responsibilities to other team members. However, during business startup it takes the unified efforts of various stakeholders with major roles and responsibilities overlapping.
Work towards rapid growth
Rapid growth of the business shows that your idea is great for the market and this is what all entrepreneurs should strive for. The market is also very welcoming to products that grow fast in popularity among the consumers and investors are more likely to get involved with such products. Fast growth is also important to secure more funding or later-stage venture capital. Many investors often want to be part of a business that shows great promise based on the market acceptance at initial launch. Very few investors will be involved in products that have not been tested in the market before, take the Sharks for example.
Your business plan should have a clear road map with various milestones to be achieved in certain amounts of time. This is because growth leads to more growth and if the growth does not happen within a certain period, then you may as well forget about it altogether. Running out of cash is also another risk associated with slow business growth, because it leads to losing to competition, customers and personnel.
Have a recovery plan
You can carry out all the analytics and research but it is important to remember that you cannot really predict the future. Anything may go wrong or unexpected issues may come up and this is why it is essential to have a recovery plan. You need to have the back up of a very versatile team that knows how to recover from the unexpected.
Your recovery plan depends on your team’s ability to change products, start new marketing approaches, rebrand the business, switch to a different industry, and adjust to a different compensation plans or even start up the business all over again. The market may not respond to the idea as predicted but research may show that the market wants something a little different. With such feedback, you do not need to throw out the idea completely but make a few changes in order to integrate better into the product markets. You need to have a team that can work together harmoniously to recover from such blows and get the business back on track.
Working closely with co-founders and partners creates more accountability and helps individuals to avoid pitfalls since the other founders may have other skills.
Find the right investors and listen to them
You should make investors part of your business plan. If you do not have any prior experience in the business world, you will need the guidance and business knowledge of a person who has been in the game for a long time. Even if the investor does not inject money into your idea, they can be a valuable source of information on how to handle the business markets.
Investors are great for providing funding. You can be at a much better vantage point if you find an investor that shares your passion and believes in you. Remember that investors do have a say in your company so look for a reputable and respectable character whose advice and suggestion you can take into account in your business activities.
Business insurance should be at the top of your list of priorities during start up. Because you are relying on recommendations from analytics as to the potential success or failure of the business, it is advisable to have the backing of insurance in case things go south. You should find the proper insurance cover for your business such as homeowners insurance, if your working from home. Having business insurance will protect you against the liabilities of business-related injuries and risk of damage or loss of property. These incidences could rob your business of the much-needed capital that is crucial to the start up months causing the business to fail.
If you can power through the start up period, then you will be lucky enough to have achieved what 90% of business start-ups have failed at. Besides good luck, there are many other reasons why the 10% of business start-ups succeed. Businesses that meet market demands, grow fast and have detailed plans including a recovery plan stand out in the tough world of business today.
Jane Louis is a business investor working with many small and medium sized businesses. Visit her blog to find out how to start up a debt free business.