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The process of developing a business plan

When I look at the process of creating a new venture, I often see people forget some of the basic elements in the process of developing a business plan.

The first three steps are:

  1. Opportunity discovery,
  2. Business modelling
  3. Business planning

 

Opportunity Discovery

The best idea is the one which provides the best business opportunity. Therefore we are not looking for any idea but an idea which provides the best opportunity.

Therefore the process of ideation captures the current industry trends and the competitor in and around them. The technology innovation currently applied to this market and the outlook we see in terms of costs and market adoption trends.

The creative problem solving can not sit in isolation and needs to be surrounded by the context for it to be applied to create an outstanding  value proposition later on.

Business Modelling

For most people this is filling out the Business Model Canvas, a tools which provides a powerful view of the business model. But again this is completed in isolation within a full understanding the ecosystem, actors and their behaviours.

The process of modelling is about understanding the relationship between the key actors within the ecosystem, it doesn’t matter if its designing a new road bridge, a tv or a new products. This dynamic relationship is so important in understanding the processes and metrics to be put in place to plan the business.

Business Planning

The core aspects of Business Planning are risk analysis, scenario planning and financial planning. Once these are done the rest, include product design, marketing strategy and operations are secondary.

All investors want to know you can manage this risk and act accordingly.

The process of developing a business plan are about understanding the dynamic relationship and how to mitigate the risks they pose to your business. Its not an exercise in writing or filling out the right amount of words in the right sections.

 

The process of developing a business plan is simple yet so many people get it wrong. Just remember to understand the dynamic nature of business and that your business startup will be connected with these and therefore needs to adjust to maintain a successful course through the early years.

Developing a business process diagram for your startup

As a entrepreneur, you can have a lifestyle of freedom and flexibility not offered to an employee. However, being a owner of a small business also carries greater responsibility with many more tasks to juggle. This means you need to understand the tasks required by everyone around.

Entrepreneur

  • Planning and Strategy – You are the principal strategist and planner.
  • Finance and Accounting – Depending on the business, some owners can bootstrap and start with a smaller budget, but either way you’ll also need to set up and maintain business bank accounts, payment processing, accounts payable and accounts receivable, and taxes.
  • Legal – From forming a limited liability company to creating legal contracts. You might need to write, review and sign legal contracts and sales agreements.
  • Marketing and Sales – No matter how good your product or service is, you need marketing and sales to drive business. Depending on the business, you could be doing print advertising, public relations, online marketing, networking, cold calling and managing commissioned salespeople.
  • Customer Service – In the beginning, most entrepreneurs are responsible for conducting all of the customer service duties. These include phone calls, email messages and follow-ups concerning product delivery and quality issues.
  • Human Resources – As a small business grows, so do its hiring needs to accommodate more orders and faster growth. The entrepreneur  needs to identify human resources needs, write job descriptions, screen and interview candidates, train, manage and pay employees.

Customers

Nurturing relationships with your customers is a crucial part of growing a startup business. In this age of ecommerce and technology innovation, caring for your customers has never been more important.

The easiest way to get, keep and get your loyal customer to promote your business is to:

Interact with your customers

Here are some simple lessons:

  • Keeping your patience is key to giving your customer the time to air out their issue.
  • Do everything in your power to provide excellent service to your customers on an ongoing basis.
  • it’s important to truly listen
  • Treat a Customer Like a Valued Partner
  • Build Trust by alerting your customers to Large Scale Changes, Good or Bad
  • Being transparent in the digital age is a must.
  • No matter the circumstance, the customer is always right.

Business operations

This is the core of the business, it handles everything. If you can understand what this does and how it does it, to provide an excellent customer experience each time within budget, your business has the best opportunity for success. Don’t leave any stone unturned in making your operation understandable by ALL stakeholders in the business, staff, shareholders and most importantly your customers.

business process diagram for your startup
business process diagram for your startup

Financial

Financial planning and cash management is fundamental to a startup.  Perhaps the most challenging part of building a startup is forecasting revenue targets. You can take one of two approaches; a top down and bottom up approach.

  • The top down approach involves identifying comparable companies to yours that have grown to be successful and modeling your revenue growth curve similar to these companies.
  • The bottom up approach makes use of your market research to look at how many customers you can reach, the number you can persuade to work with you and how many you can capture as paying customers.

The final step in your financial plan is to develop your cash flows. Revenue minus cost of goods provides positive cash and operating expenses and capital expenses (purchase of assets) use up cash. Every startup must have a good view on how much cash they will need to get through each phase of the business.

5 places to run your startup business, on the cheap

What places to run your startup business?

When starting out, you only seem to have costs and they keep coming in. The five set of fees are:

  1. Office space
  2. Utilities
  3. Incorporating and legal fees
  4. Accounting costs for the first year in business
  5. Payroll for employees

So one of the main costs is office space and if we can reduce that we can survive for longer and hopefully last until we start making more money than we spend.

  1. Run your startup business from home. This won’t work for every business, but if it will work for yours it can save you a pile of cash on utilities and rent.
  2. Coffee Shop’s are happy to have you and have good wifi. You also get to meet like minded people and can invite people for meetings in the coffee shop.
  3.  Look out for a business incubator which helps startups by providing them space, mentors and events. These are normally free for a set period.
  4. Spare desk in someone else’s office. A lot of businesses have space and if you can use one or two desks in return for some form of payment, even your manpower it will be cheaper and more flexible.
  5. Find a co-working space where you can rent space as-needed for much less than the cost of a traditional commercial office which is normally looking for 3-5 years.

Just remember when looking for office space its “Location, location, location.” , which drives home just how important location is when choosing a space for your startup business.

Entrepreneurship as a career choice – Millennial Entrepreneurs

The Millennials are making the career choice of being an entrepreneur.

Promoting entrepreneurship as a viable career option and supporting self-employment on an higher educational campus has both community and economic relevance. The role of higher educational campuses to nurture and develop the entrepreneurial and innovative talent is foundation to creating the next generation within our community. The trend is for millennial University students to be empowered to come out of university with an understanding of entrepreneurship, with a view that these skills and knowledge allow them to make informed life choices.

Millennial Entrepreneurs

Our Millennial Entrepreneurs understand how to start new businesses and take on the risk and rewards of being an founder.  Entrepreneurs are the dreamers who are fuelled by the desire to pioneer, lead, innovate and invent disruptive technologies and products. The tech savvy millennial wants to work the way then want, the hours they want make the opportunities they want.

In the 1980s we saw a massive increase in self employed and now their children are following the footsteps or the desire of their parents and opted for a career that was decided by their elders. However, the opening up of the world economy during the 1990’s and the great advances in tech field has had far reaching impact on the way business was done world over.

Millennial Entrepreneurs Motivation

These momentous changes are opening up new business creation tools and unexplored business models for the young and ambitious who were not satisfied being put in a single career for their entire life. Young people are drawn towards entrepreneurship because:

  1. The desire to be their own boss and have better control
  2. The motivation to take risks in the changed global environment where unexplored new opportunities were present
  3. The ambition to develop and execute a plan right from the ground level
  4. The aim to do well financially and take their growth trajectory to unprecedented level

New Venture Creation (NVC) Programmes are available to equip nascent entrepreneurs with the skills necessary to start a scalable business.  These university degrees have been developed by entrepreneurs to support Millennial Entrepreneurs on the entrepreneurial journey, and to develop the entrepreneur within  alongside an in-depth understanding of how to start and run a business.

Students will be in a class with like-minded Millennial Entrepreneurs developing a strong network of entrepreneurs. Throughout the  degree, the focus will progressively move from entrepreneurial mindset, creativity, venture feasibility and marketing, to business operations, stakeholder communications, sales and growth strategies.

6 ways to find a co-founder

Co-founders are normally people involved in the initial launch of startup companies. Anyone can be a co-founder, but frequently co-founders are entrepreneurs, engineers, hackers, funders, web developers, web designers and others involved in the ground level of a new  venture.   The first step in finding your co-founder is to map yours needs.  Make sure you are perfectly clear on what skillsets/resources will be the most important for the success of the startup, and best fill a hole in your own resume and desired management team.

    1. Friends from University – It worked for the guys at Facebook and Google, so just get out and meet other students.
    2. Former co-workers – If you’ve worked together as employees, you might be able to work together as co-founders. You have the history and know each others skill sets.
    3. People you meet over coffee – We see hot beds of startups co-locating themselves in coffee shops, just talk to the guy next to you.
    4. Former co-founders in another venture – There’s no better person to launch with than someone that has started a company before.
    5. Accelerators – Related to some of the other co-working suggestions, simply applying to a startup accelerator can lead to finding a co-founder.
    6. At meet-ups – Tech Meetups are great places to find co-founders and they are easy to find and also go to.