Effective Business Planning
for Entrepreneurs
Ganesh N Prabhu
Questions to Ask and to Answer
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Who are your customers? Who are not your customers?
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What are your customers unmet needs? How are they meeting those needs now? Does the present way hurt?
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What is the essence of your new product as a solution?
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How will customers benefit from your product? Quantify.
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How will the business make money ? Who will pay you?
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How large is the addressable market? What are most direct competitors? How does your product/service compare?
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How will you leverage your assets and competencies?
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How to involve customers in creating better products?
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Can the new business generate sustainable high profits?
Effective Business Plan
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Has a clear and fact based executive summary.
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Presents and justifies the new business model.
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Shows how you will reach buyers and convert.
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Identifies those who will implement the plan.
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Covers all the risks and how they are covered.
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Shows how it fits the firm’s business goals.
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Shows few and only the most critical numbers.
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Shows homework - answers obvious questions.
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Builds credibility of the product and the team.
Usual Mistakes in Startup Plans - 1
Customer related:
- Lack of in-depth understanding of customers.
- Choosing convenient market rather than best.
- Going for me-too rather than value creation.
- Going for larger segment when niche is better.
- Not looking at quality from customer’s view.
- Not giving sufficient pricing options to buyers.
- Under-pricing rather than value based pricing.
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Not doing what really gets you your customers!
Usual Mistakes in Startup Plans - 2
Cost/Resource related:
- High, unjustified startup capital requirements.
- Buying facilities when borrow/rent is possible.
- Using more office space than strictly required.
- Using resources wastefully like larger firms do.
- Paying high salaries - not low salary + bonus.
- Using advertisements over free press publicity.
- Fixed cost too high and variable cost too low.
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Not doing the cost-volume-profit analysis!
Title
Effective Business Planning for Entrepreneurs
By Ganesh N Prabhu
Effective Business Planning for Entrepreneurs
- 873
