Planning, action plan
Make an action plan and an activity plan. One way to plan activities is to make a GANTT schedule. By developing a schedule for activities, you see when you need to start work on a specific activity, such as a launch. Example of GANTT schedule:
What is the right price?
What do you offer the market and what are the customers willing to pay? How do they value your service?
What are the competitors' pricing?
When you are going to price your product, you need to keep in mind that the costs must be covered, such as salaries, marketing, insurance, office supplies and more. The fixed costs are not directly related to your product but these costs must be covered by sales revenue.
No one can do everything but everyone can do something - that is the starting point of networking. A functioning network is valuable for entrepreneurs. The idea of networking is that we are all connected. You know people who in turn know people who in turn… and so on. By getting in touch with those who have special skills, experience and their own networks, you can get help in different ways. The people in the network can contribute with the skills you need, help solve problems or develop thoughts and ideas.
Build a network that fits your business idea. Start from these two questions:
- What do you need help with in different areas to run your business?
- Which people, companies and organizations would you like to collaborate with?
Before starting a business, make two budgets:
- Profit budget that shows the company's revenues, costs and estimated results.
- Liquidity budget that shows what the company has for payments, disbursements and cash and cash equivalents. The performance budget helps you manage the company and shows your goal in numbers. It contains expected revenue, how much you expect to sell and planned costs during the financial year.
The liquidity budget shows the company's ability to pay. Most start-ups have a lot of payouts before they get any revenue. For example, purchases of materials, products and equipment must be made before sales start. If you also send invoices to your customers, it takes time to get the money in, because it is a credit period on invoices. A good liquidity in the company gives you freedom of action, so you can carry out the activities you have planned.
PEST Analysis is a strategic framework used to evaluate the external environment of a business by breaking down the opportunities and risks into Political, Economic, Social, and Technological. This framework can also be extended to PESTEL and will include Environmental and Legal factors.
These often relate to legislative laws. Consumer, health and safety, trade, and regulatory requirements are a few to consider. These are laws created by the government and are set by legislative leaders. Individuals are unable to change these rules. Legal issues and government regulations affect the probability of a business being successful and profitable.
A range of economic factors might be considered, the main ones including inflation, recession, unemployment/employment rates and interest rates. Companies can attempt to recession-proof their business, but this is not guaranteed. Neither are the fluctuations in employment and unemployment rates. But they affect the buying capabilities of consumers. And if consumers are not buying products, no business is safe.
This part of the analysis examines the cultural and demographic aspects to help determine whether the business can compete in the market. Consumer behaviour, and purchasing power, are also linked to social factors. Why consumers buy products is studied and transferred to target research enabling companies to market products effectively to the right people. Considerations include culture, ethnic backgrounds, health consciousness, social class and many other factors.
As with political factors, most social factors cannot be changed singlehandedly. They must be observed and understood in order to sell to consumers. While you can offer items to users, there is no guarantee they will buy. You must solve their problem first, and that starts with understanding their needs.
Age distribution, lifestyle changes, population growth, demographics, environmental, health and educational consciousness are some important issues which need to be considered.
These relate to technology issues, complications, and solutions, considering factors ranging from cyber-security to manufacturing equipment. Technology is used to market and deliver products.
The technology available can either make it easy or tough to improve the production level or enter the industry. Therefore, things such as government expenditure on technology, technological advancements, and lifecycle of technology available, as well as the role of internet and the changes to it (if any) need to be considered.
Technology is also used to address consumer complaints and feedback. The company with the best, most agile technology, has a unique competitive advantage.
Staying up-to-date with the latest technology and being open to utilising it within your business will contribute to success.
- What problem or problems will your business solve?
- Identify and describe this in your business plan.
- The virtual assistant
- Developing a Business Plan
- Sustainability and Business Improvement
- Innovation and Product Development
Finance for Enterprises
- The importance of financial management for a business
- How to identify financial requirements to support an enterprise
- The importance of accurate bookkeeping to financial management
- Evaluating financial options to fund a business
- Monitoring income and expenditure against business objectives
- Conducting a financial analysis
- Marketing and Networking
- MYVA Resources