3 Clever Ways to Identify the Customers Who’ll Generate Your #PassiveIncome from #ThePowerofPassiveIncome

You can’t make money if you can’t find people to sell to. These three tactics will help you zero in on the target markets for your passive income products and services.


6 min read

Opinions expressed by Entrepreneur contributors are their own.


The following excerpt is from Nightingale-Conant’s book The Power of Passive Income: Make Money Work For You. Buy it now from Amazon | Barnes & Noble | Apple Books | IndieBound

If you’ve got a business idea, it’s time to start identifying exactly who your customers are. We’re going to identify them using three different categories — an objective measure, a subjective measure, and a third classification that we’ll call “ECB,” or expected customer behavior. Let’s look at these three categories in order.

Objective measure

Basically, the objective measure refers to anything you can say about your customers through numbers. For example, are you able to determine what age groups are most interested in what you have to offer? Let’s use “old-time baseball” as an example. For this topic, think about what demographic might form most of your website’s viewership. You can find out how many people have visited websites devoted to your interest. You can also find out how many people have done web searches for phrases like “early baseball” or “history of sports.” But that kind of research is usually not effective in terms of cost and time.

Chances are, you yourself are probably your best source of objective information about a specific interest. Most of the people who share your interest are probably much like you. That’s especially true if you’ve found a specific interest. There may be millions of people who follow NFL football, but a lot fewer are interested in what baseball was like a hundred years ago. And remember that can work to your advantage. Even if there are only a thousand people in the whole country who share your interest, if you can get them all to send you $10 a month to subscribe to a newsletter about your topic, then you’ve got a significant amount of passive income.

Subjective measure

Subjective measures of your potential customers are those that aren’t expressed simply in numbers. They’re generally understood anecdotally or in combination with a numerical analysis. For example, during presidential election debates, almost every candidate for the past 30 years has worn a red tie. It’s just something that voters want to see, and it goes beyond objective categories of age, income, or geographical location. Focus groups show that both men and women respond more positively to someone in a red tie rather than a blue one. It’s just a gut feeling that people have. It’s totally subjective. But it’s a fact, so why fight it? That’s why you’ll see so many red ties on the debate stage.

It’s important to be aware of the subjective issues of your potential customers. For instance, in every field of interest there are certain phrases, names, and ideas by which people recognize each other. We can call it jargon, although that word may have a negative connotation. It’s really just a set of beliefs that a group of people shares, and that provides the starting point for a possible relationship. If you want to bond with someone who likes motorcycles, for example, you might want to mention the classic Indian motorcycle brand that was popular in the 1940s. As soon as you bring that up, a motorcycle enthusiast will know that you have a certain level of interest. But if he or she mentions the Indian motorcycle and you have no idea what it is, it’s clear that your interest is less deep. So, think about what those subjective touchstones might be for your potential customers, and make sure you put them to use.

Expected customer behavior

The final element in your customer profile concerns the beliefs that a customer has of you, your website, and any product or service you’ll provide. This final element also includes the beliefs you have about your customers. All of this can be referred to as expected customer behavior (ECB). And regardless of what kind of an online passive income business you intend to create, you can likely count on at least one of three things to ring true.

First, if you expect anyone to pay you $100 or more through your website for something that’s not a tangible product, that expectation is very misplaced. Online customers just aren’t going to do it. But there’s another side to this coin: Online customers also expect that you will, in fact, ask them to spend $100 or more — so if you refute that expectation by asking for less, you have a good chance of making a sale.

Second, if you labor over your website or blog in the expectation that visitors will explore every corner of it, you’ll be disappointed. Even if web visitors are passionate about a particular topic, the vast majority of people stay on a site for less than five minutes, and often less than one minute. That’s another reason why a simple, well-organized website is better than a more elaborate one. So, put your best information up front, show the visitor what you have to offer, and make responding to that offer as quick and easy as possible. That’s definitely the most efficient route for building a passive income stream.

Finally, although it’s true that elaborate websites are a mistake, there is one aspect of a website that you need to take very seriously: You must update your website as often as possible. Ideally this should be done every day, or every two days at the outset. This is probably the single most important fact you need to know about a website business of any kind. Visitors quickly learn how often a site is updated, and they’ll return accordingly. That’s another reason why blogs are so much better than more complicated sites. It’s easy to update a blog on a daily basis. The few minutes you spend updating your site are the absolutely essential foundation for building passive income on the web.

Source link

How to Write a Business Plan [Updated for 2019]

how to write a business plan

This article is part of both our Business Startup Guide and our Business Planning Guide—curated lists of our articles that will get you up and running in no time!

If you’ve reviewed what a business plan is, and why you need one to start and grow your business, then it’s time to dig into the process of actually writing a business plan.

In this step-by-step guide, I’ll take you through every stage of writing a business plan that will actually help you achieve your goals. If you’re just looking for a downloadable template to get you started, you can skip ahead and download it now. Or, if you just want to see what a completed business plan looks like, check out our library of over 500 free sample business plans.

Download the Business Plan Template today!

3 rules for writing a business plan:

1. Keep it short

Business plans should be short and concise.

The reasoning for that is twofold:

  1. First, you want your business plan to be read (and no one is going to read a 100-page or even 40-page business plan).
  2. Second, your business plan should be a tool you use to run and grow your business, something you continue to use and refine over time. An excessively long business plan is a huge hassle to revise—you’re almost guaranteed that your plan will be relegated to a desk drawer, never to be seen again.

2. Know your audience

Write your plan using language that your audience will understand.

For example, if your company is developing a complex scientific process, but your prospective investors aren’t scientists, avoid jargon, or acronyms that won’t be familiar.

Instead of this:

“Our patent-pending technology is a one-connection add-on to existing bCPAP setups. When attached to a bCPAP setup, our product provides non-invasive dual pressure ventilation.”

Write this:

“Our patent-pending product is a no power, easy-to-use device that replaces traditional ventilator machines used in hospitals at 1/100th the cost.”

Accommodate your investors, and keep explanations of your product simple and direct, using terms that everyone can understand. You can always use the appendix of your plan to provide the full specs if needed.

3. Don’t be intimidated

The vast majority of business owners and entrepreneurs aren’t business experts. Just like you, they’re learning as they go and don’t have degrees in business.

Writing a business plan may seem like a big hurdle, but it doesn’t have to be. You know your business—you’re the expert on it. For that reason alone, writing a business plan and then leveraging your plan for growth won’t be nearly as challenging as you think.

And you don’t have to start with the full, detailed business plan that I’m going to describe here. In fact, it can be much easier to start with a simple, one-page business plan—what we call a Lean Plan—and then come back and build a slightly longer, more detailed business plan later.

how to write a business plan

6 elements to include in a business plan

Now that we have the rules of writing a business plan out of the way, let’s dive into the elements that you’ll include in it.

The rest of this article will delve into the specifics of what you should include in your business plan, what you should skip, the critical financial projections, and links to additional resources that can help jump-start your plan.

Remember, your business plan is a tool to help you build a better business, not just a homework assignment. Here are the basic components of the business plan you’re going to write.

1. Executive summary

This is an overview of your business and your plans. It comes first in your plan and is ideally only one to two pages. Most people write it last, though.

2. Opportunity

This section answers these questions: What are you actually selling and how are you solving a problem (or “need”) for your market? Who is your target market and competition?

3. Execution

How are you going to take your opportunity and turn it into a business? This section will cover your marketing and sales plan, operations, and your milestones and metrics for success.

4. Company and management summary

Investors look for great teams in addition to great ideas. Use this chapter to describe your current team and who you need to hire. You will also provide a quick overview of your legal structure, location, and history if you’re already up and running.

5. Financial plan

Your business plan isn’t complete without a financial forecast. We’ll tell you what to include in your financial plan.

6. Appendix

If you need more space for product images or additional information, use the appendix for those details.

Let’s dive into the details of each section of your business plan and focus on building one that your investors and lenders will want to read.

how to write a business plan

Executive summary

The executive summary of your business plan introduces your company, explains what you do, and lays out what you’re looking for from your readers. Structurally, it is the first chapter of your business plan. And while it’s the first thing that people will read, I generally advise that you write it last.

Why? Because once you know the details of your business inside and out, you will be better prepared to write your executive summary. After all, this section is a summary of everything else you’re going to write about.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. In fact, it’s very common for investors to ask for only the executive summary when they are evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation, and more in-depth financials.

Because your executive summary is such a critical component of your business plan, you’ll want to make sure that it’s as clear and concise as possible. Cover the key highlights of your business, but don’t into too much detail. Ideally, your executive summary will be one to two pages at most, designed to be a quick read that sparks interest and makes your investors feel eager to hear more.

The critical components of a winning executive summary:

One sentence business overview

At the top of the page, right under your business name, include a one-sentence overview of your business that sums up the essence of what you are doing.

This can be a tagline, but is often more effective if the sentence describes what your company actually does. This is also known as your value proposition.

Problem

In one or two sentences, summarize the problem you are solving in the market. Every business is solving a problem for its customers and filling a need in the market.

Solution

This is your product or service. How are you addressing the problem you have identified in the market?

Target market

Who is your target market, or your ideal customer? How many of them are there? It’s important here to be specific.

If you’re a shoe company, you aren’t targeting “everyone” just because everyone has feet. You’re most likely targeting a specific market segment such as “style-conscious men” or “runners.” This will make it much easier for you to target your marketing and sales efforts and attract the kinds of customers that are most likely to buy from you.

Competition

How is your target market solving their problem today? Are there alternatives or substitutes in the market?

Every business has some form of competition and it’s critical to provide an overview in your executive summary.

Company overview and team

Provide a brief overview of your team and a short explanation of why you and your team are the right people to take your idea to market.

Investors put an enormous amount of weight on the team—even more than on the idea—because even a great idea needs great execution in order to become a reality.

Financial summary

Highlight the key aspects of your financial plan, ideally with a chart that shows your planned sales, expenses, and profitability.

If your business model (i.e., how you make money) needs additional explanation, this is where you would do it.

Funding requirements

If you are writing a business plan to get a bank loan or because you’re asking angel investors or venture capitalists for funding, you must include the details of what you need in the executive summary.

Don’t bother to include terms of a potential investment, as that will always be negotiated later. Instead, just include a short statement indicating how much money you need to raise.

Milestones and traction

The last key element of an executive summary that investors will want to see is the progress that you’ve made so far and future milestones that you intend to hit. If you can show that your potential customers are already interested in—or perhaps already buying—your product or service, this is great to highlight.

You can skip the executive summary (or greatly reduce it in scope) if you are writing an internal business plan that’s purely a strategic guide for your company. In that case, you can dispense with details about the management team, funding requirements, and traction, and instead treat the executive summary as an overview of the strategic direction of the company, to ensure that all team members are on the same page.

how to write a business plan

Opportunity

There are four main chapters in a business plan—opportunity, execution, company overview, and financial plan. The opportunity chapter of your business plan is where the real meat of your plan lives—it includes information about the problem that you’re solving, your solution, who you plan to sell to, and how your product or service fits into the existing competitive landscape.

You’ll also use this section of your business plan to demonstrate what sets your solution apart from others, and how you plan to expand your offerings in the future.

People who read your business plan will already know a little bit about your business because they read your executive summary. But this chapter is still hugely important because it’s where you expand on your initial overview, providing more details and answering additional questions that you won’t cover in the executive summary.

The problem and solution

Start the opportunity chapter by describing the problem that you are solving for your customers. What is the primary pain point for them? How are they solving their problems today? Maybe the existing solutions to your customer’s problem are very expensive or cumbersome. For a business with a physical location, perhaps there aren’t any existing solutions within reasonable driving distance.

Defining the problem you are solving for your customers is far and away the most critical element of your business plan and crucial for your business success. If you can’t pinpoint a problem that your potential customers have, then you might not have a viable business concept.

To ensure that you are solving a real problem for your potential customers, a great step in the business planning process is to get away from your computer and actually go out and talk to potential customers. Validate that they have the problem you assume they have, and then take the next step and pitch your potential solution to their problem. Is it a good fit for them?

Once you have described your target market’s problem, the next section of your business plan should describe your solution. Your solution is the product or service that you plan on offering to your customers. What is it and how is it offered? How exactly does it solve the problem that your customers have?

For some products and services, you might want to describe use cases or tell a story about a real user who will benefit from (and be willing to pay for) your solution.

Target market

Now that you have detailed your problem and solution in your business plan, it’s time to turn your focus toward your target market: Who are you selling to?

Depending on the type of business you are starting and the type of plan you are writing, you may not need to go into too much detail here. No matter what, you need to know who your customer is and have a rough estimate of how many of them there are. If there aren’t enough customers for your product or service, that could be a warning sign.

Market analysis and market research

If you are going to do a market analysis, start with some research. First, identify your market segments and determine how big each segment is. A market segment is a group of people (or other businesses) that you could potentially sell to.

Don’t fall into the trap, though, of defining the market as “everyone.” The classic example is a shoe company. While it would be tempting for a shoe company to say that their target market is everyone who has feet, realistically they need to target a specific segment of the market in order to be successful. Perhaps they need to target athletes or business people who need formal shoes for work, or perhaps they are targeting children and their families. Learn more about target marketing in this article.

TAM, SAM, and SOM

A good business plan will identify the target market segments and then provide some data to indicate how fast each segment is growing. When identifying target markets, a classic method is to use the TAM, SAM, and SOM breakdown to look at market sizes from a top-down approach as well as a bottom-up approach.

Here are some quick definitions:

  • TAM: Your Total Available or Addressable Market (everyone you wish to reach with your product)
  • SAM: Your Segmented Addressable Market or Served Available Market (the portion of TAM you will target)
  • SOM: Your Share Of the Market (the subset of your SAM that you will realistically reach—particularly in the first few years of your business)

Once you have identified your key market segments, you should discuss the trends for these markets. Are they growing or shrinking? Talk about the market’s evolving needs, tastes, or other upcoming changes to the market.

Your ideal customer

When you have your target market segments defined, it’s time to define your ideal customer for each segment.

One way to talk about your ideal customer in your plan is to use your “buyer persona” or “user persona.” A buyer persona is a fictitious representation of your market—they get a name, gender, income level, likes, dislikes, and so on.

While this may seem like additional work on top of the market segmentation that you have already done, having a solid buyer persona will be an extremely useful tool to help you identify the marketing and sales tactics you’ll need to use to attract these ideal customers.

Key customers

The final section of your target market chapter should discuss key customers.

This section is really only required for enterprise (large) companies that have very few customers. Most small businesses and typical startups can skip this and move on.

But if you selling to other businesses (B2B), you may have a few key customers that are critical to the success of your business, or a handful of important customers that are trend leaders in your space. If so, use this final portion of your target market chapter to provide details about those customers and how they are important to your business’s success.

Competition

Immediately following your target market section, you should describe your competition. Who else is providing solutions to try and solve your customers’ pain points? What are your competitive advantages over the competition?

Most business plans use a “competitor matrix” to easily compare their features against their competition. The most important thing to illustrate in this section of your business plan is how your solution is different or better than other offerings that a potential customer might consider. Investors will want to know what advantages you have over the competition and how you plan on differentiating yourself.

One of the biggest mistakes entrepreneurs make in their business plans is stating that they don’t have any competition.

The simple fact is that all businesses have competition. Competitors may not always come in the form of “direct competition,” which is when you have a competitor offering a similar solution to your offering. Often times, you may be dealing with “indirect competition,” which is when consumers solve their problem with an entirely different kind of solution.

For example, when Henry Ford was first marketing his cars, there was very little direct competition from other car manufacturers—there weren’t any other cars. Instead, Ford was competing against other modes of transportation—horses, bikes, trains, and walking. On the surface, none of these things look like real direct competition, but they were how people were to solving their transportation problems at that time.

Future products and services

All entrepreneurs have a vision of where they want to take the business in the future if they are successful.

While it’s tempting to spend a lot of time exploring future opportunities for new products and services, you shouldn’t expand too much on these ideas in your business plan. It’s certainly useful to include a paragraph or two about potential future plans, to show investors where you are headed in the long term, but you don’t want your plan to be dominated by long-range plans that may or may not come to fruition. The focus should be on bringing your first products and services to market.

how to write a business plan

Execution

Now that you’ve completed the opportunity chapter, you’re going to move on to the execution chapter, which includes everything about how you’re actually going to make your business work. You’ll cover your marketing and sales plans, operations, how you’ll measure success, and the key milestones that you expect to achieve.

Marketing and sales plan

The marketing and sales plan section of your business plan details how you plan to reach your target market segments (also called target marketing), how you plan on selling to those target markets, what your pricing plan is, and what types of activities and partnerships you need to make your business a success.

Before you even think about writing your marketing plan, you must have your target market well-defined and have your buyer persona(s) fleshed out. Without truly understanding who you are marketing to, a marketing plan will have little value.

Your positioning statement

The first part of your marketing and sales plan is your positioning statement. Positioning is how you will try and present your company to your customers. Are you the low-price solution, or are you the premium, luxury brand in your market? Do you offer something that your competitors don’t offer?

Before you start working on your positioning statement, you should take a little time to evaluate the current market and answer the following questions:

  • What features or benefits do you offer that your competitors don’t?
  • What are your customers’ primary needs and wants?
  • How are your competitors positioning themselves?
  • How do you plan on differentiating from the competition? In other words, why should a customer choose you instead of someone else?
  • Where do you see your company in the landscape of other solutions?

Once you’ve answered these questions, you can then work on your positioning strategy and define it in your business plan.

Don’t worry about making your positioning statement very long or in-depth. You just need to explain where your company sits within the competitive landscape and what your core value proposition is that differentiates your company from the alternatives that a customer might consider.

You can use this simple formula to develop a positioning statement:

For [target market description] who [target market need], [this product] [how it meets the need]. Unlike [key competition], it [most important distinguishing feature].

For example, the positioning statement for LivePlan, our business planning product, is: “For the businessperson who is starting a new company, launching new products or seeking funding or partners, LivePlan is software that produces professional business plans quickly and easily. Unlike [name omitted], LivePlan creates a real business plan, with real insights—not just cookie-cutter, fill-in-the-blank templates.”

Pricing

Once you know what your overall positioning strategy is, you can move on to pricing.

Your positioning strategy will often be a major driver of how you price your offerings. Price sends a very strong message to consumers and can be an important tool to communicate your positioning to consumers. If you are offering a premium product, a premium price will quickly communicate that message to consumers.

Deciding on your price can feel more like an art than a science, but there are some basic rules that you should follow:

  • Covering your costs. There are certainly exceptions to this, but for the most part, you should be charging your customers more than it costs you to deliver your product or service.
  • Primary and secondary profit center pricing. Your initial price may not be your primary profit center. For example, you may sell your product at, or even below, your cost, but require a much more profitable maintenance or support contract to go along with the purchase.
  • Matching the market rate. Your prices need to match up with consumer demand and expectations. Price too high and you may have no customers. Price too low and people may undervalue your offering.

3 approaches to pricing strategy

  • Cost-plus pricing. You can establish your pricing based on several factors. You can look at your costs and then mark up your offering from there. This is usually called “cost-plus pricing” and can be effective for manufacturers where covering initial costs is critical.
  • Market-based pricing. Another method is to look at the current landscape of competitors and then price based on what the market is expecting. You could price at the high-end or low-end of the market to establish your positioning.
  • Value pricing. Yet another method is to look at a “value pricing” model where you determine the price based on how much value you are providing to your customer. For example, if you are marketing lawn care to busy professionals, you may be saving your customers 1 hour/week. If that hour of their time is valued at $50/hour, your service could charge $30/hour.

Promotion

With pricing and positioning taken care of, it’s time to look at your promotion strategy. A promotion plan details how you plan on communicating with your prospects and customers. Remember, it’s important that you’ll want to measure how much your promotions cost and how many sales they deliver. Promotional programs that aren’t profitable are hard to maintain in the long term.

Here are a few areas that you might consider as part of your promotional plan:

Packaging

If you are selling a product, the packaging of that product is critical. If you have images of your packaging, including those in your business plan is always a good idea.

Be sure the packaging section of your plan answers the following questions:

  • Does your packaging match your positioning strategy?
  • How does your packaging communicate your key value proposition?
  • How does your packaging compare to your competition?

Advertising

Your business plan should include an overview of the kinds of advertising you plan to spend money on. Will you be advertising online? Or perhaps in traditional, offline media? A key component to your advertising plan is your plan for measuring the success of your advertising.

Public relations

Getting the media to cover you—PR—can be a great way to reach your customers. Getting a prominent review of your product or service can give you the exposure you need to grow your business. If public relations if part of your promotional strategy, detail your plans here.

Content marketing

A popular strategy for promotion is engaging in what is called content marketing.

Content marketing is what Bplans is all about. It’s when you publish useful information, tips, and advice—usually made available for free—so that your target market can get to know your company through the expertise that you deliver. Content marketing is about teaching and educating your prospects on topics that they are interested in, not just on the features and benefits that you offer.

Social media

These days, having a social media presence is essentially a requirement for the vast majority of businesses.

You don’t need to be on every social media channel, but you do need to be on the ones that your customers are on. More and more, prospects are using social media to learn about companies and to find out how responsive they are.

Strategic alliances

As part of your marketing plan, you may rely on working closely with another company in a form of partnership.

This partnership may help provide access to a target market segment for your company while allowing your partner to offer a new product or service to their customers.

If you have partnerships already established, it’s important to detail those partnerships in your business plan.

Operations

The operations section is how your business works. It’s the logistics, technology, and other nuts and bolts. Depending on the type of business you are starting, you may or may not need the following sections. Only include what you need and remove everything else.

Sourcing and fulfillment

If your company is buying the products it is selling from other vendors, it’s important to include details on where your products are coming from, how they get delivered to you, and ultimately how you deliver the products to the customer—that’s sourcing and fulfillment.

If you are sourcing products from manufacturers overseas, investors are going to want to know about your progress working with these suppliers. If your business is going to be delivering products to your customers, you should describe your plans for shipping your products.

Technology

If you are a technology company, it’s critical for your business plan to describe your technology and what your “secret sauce” is.

You don’t have to give away trade secrets in your business plan, but you do need to describe how your technology is different and better than other solutions out there. At a high level, you will want to describe how your technology works. You don’t need to go into excruciating detail here, though—if an investor is interested in more detail they will ask for it, and you can provide that information in your appendix.

Remember, your goal is to keep your business plan as short as possible, so too much detail here could easily make your plan much too long.

Distribution

For product companies, a distribution plan is an important part of the complete business plan. For the most part, service companies can skip this piece and move on.

Distribution is how you will get your product into the hands of your customers. Every industry has different distribution channels and the best way to create your distribution plan is to interview others in your industry to figure out what their distribution model is.

Here are a few common distribution models that you may consider for your business:

Direct distribution

Selling directly to consumers is by far the most simple and most profitable option.

You could consider passing the savings of selling directly on to your customers or you could simply increase your profit margins. You will still need to cover the logistics of how you will get your products to your customers from your warehouse, but a direct distribution model is usually fairly simple.

Retail distribution

Most large retailers don’t like the hassle of dealing with thousands of individual suppliers.

Instead, they prefer to buy through large distribution companies that aggregate products from lots of suppliers and then make that inventory available to retailers to purchase. Of course, these distributors take a percentage of the sales that pass through their warehouses.

Manufacturers’ representatives

These are typically salespeople who work for a “repping” agency. They often have relationships with retailers and distributors and work to sell your products into the appropriate channel. They typically work on commission and it’s not uncommon for a rep to be necessary for getting a new company access to a distributor or retailer.

OEM

This stands for “original equipment manufacturer.” If your product is sold to another company that then incorporates your product into their finished product, then you are using an OEM channel.

A good example of this is car parts suppliers. While large auto manufacturers do build large components of their cars, they also purchase common parts from third-party vendors and incorporate those parts into the finished vehicle.

Most companies use a mixture of distribution channels as part of their plans, so don’t feel that you need to be limited to a single channel. For example, it is very common to both sell direct and via distributors—you can purchase an iPhone directly from Apple, or go into a Target store and get one there.

Milestones and metrics

A business plan is only a document on paper without a real path to get the work done, complete with a schedule, defined roles, and key responsibilities.

While the milestones and metrics section of your business plan may not be long, it’s critical that you take the time to look forward and schedule the next critical steps for your business. Investors will want to see that you understand what needs to happen to make your plans a reality and that you are working on a realistic schedule.

Start with a quick review of your milestones. Milestones are planned major goals. For example, if you are producing a medical device, you will have milestones associated with clinical testing and government approval processes. If you are producing a consumer product, you may have milestones associated with prototypes, finding manufacturers, and first-order receipt.

Traction

While milestones look forward, you will also want to take a look back at major accomplishments that you have already had. Investors like to call this “traction.” What this means is that your company has shown some evidence of early success.

Traction could be some initial sales, a successful pilot program, or a significant partnership. Sharing this proof that your company is more than just an idea—that it has actual evidence that it is going to be a success—can be critically important to landing the money you need to grow your business.

Metrics

In addition to milestones and traction, your business plan should detail the key metrics that you will be watching as your business gets off the ground. Metrics are the numbers that you watch on a regular basis to judge the health of your business. They are the drivers of growth for your business model and your financial plan.

For example, a restaurant may pay special attention to the number of table turns they have on an average night and the ratio of drink sales to food sales. An online software company might look at churn rates (the percentage of customers that cancel) and new signups. Every business will have key metrics that it watches to monitor growth and spot trouble early, and your business plan should detail the key metrics that you will be tracking in your business.

Key assumptions and risks

Finally, your business plan should detail the key assumptions you have made that are important for your businesses success.

Another way to think about key assumptions is to think about risk. What risks are you taking with your business? For example, if you don’t have a proven demand for a new product, you are making an assumption that people will want what you are building. If you are relying on online advertising as a major promotional channel, you are making assumptions about the costs of that advertising and the percentage of ad viewers that will actually make a purchase.

Knowing what your assumptions are as you start a business can make the difference between business success and business failure. When you recognize your assumptions, you can set out to prove that your assumptions are correct. The more that you can minimize your assumptions, the more likely it is that your business will succeed.
how to write a business plan

Company overview and team

In this chapter, you’ll review the structure of your company and who the key team members are. These details are especially important to investors as they’ll want to know who’s behind the company and if they can convert a good idea into a great business.

Team

The old adage is that investors don’t invest in ideas, they invest in people. Some investors even go as far as to say that they would rather invest in a mediocre idea with a great team behind it than a blockbuster idea with a mediocre team.

What this really means is that running a successful business all comes down to getting the work down. Can you actually accomplish what you have planned? Do you have the right team in place to turn a good idea into a great business that will have customers banging down your doors?

The company overview and team chapter of your business plan is where you make your best case that you have the right team in place to execute on your idea. It should show that you have thought about the important roles and responsibilities your business needs in order to grow and be successful.

Include brief bios that highlight relevant experiences of each key team member. It’s important here to make the case for why the team is the right team to turn an idea into a reality. Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before?

A common mistake novice entrepreneurs make in describing the management team is giving everyone on the team a C-level title (CEO, CMO, COO, and so on). While this might be good for egos, it’s often not realistic. As a company grows, you may require different types of experience and knowledge. It’s often better to allow for future growth of titles rather than to start everyone at the top with no room for future growth or change.

Your management team doesn’t necessarily need to be complete in order to have a complete business plan. If you know that you have management team gaps, that’s O.K. In fact, investors see the fact that you know you are missing certain key people as a sign of maturity and knowledge about what your business needs to succeed. If you do have gaps in your team, simply identify them and indicate that you are looking for the right people to fill certain roles.

Finally, you may choose to include a proposed organizational chart in your business plan. This isn’t critical and can certainly live in your business plan’s appendix. At some point, as you explore funding options, you may be asked for an “org chart,” so it’s good to have one. Beyond raising money, an org chart is also a useful planning tool to help you think about your company and how it will grow over time. What key roles will you be looking to fill in the future and how will you structure your teams to get the most out of them? An org chart can help you think through these questions.

Company overview

The company overview will most likely be the shortest section of your business plan. For a plan that you intend to just share internally with your business partners and team members, skip this section and move on.

For a plan that you will share with people outside of your company, this section should include:

  • Mission statement
  • Intellectual property
  • A review of your company’s legal structure and ownership
  • The business location
  • A brief history of the company if it’s an existing company

Mission statement

Don’t fall into the trap of spending a day or more on your mission statement. An hour or two should be plenty of time.

Avoid putting together a long, generic statement about how your company is serving its customers, employees, and so on. Your company mission should be short—one or two sentences at most—and it should encompass, at a very high level, what you are trying to do. Frankly, your mission statement and your overall value proposition might even be the same thing.

Here at Palo Alto Software (makers of Bplans), our mission statement is this: “We help people succeed in business.” It’s simple and encompasses everything we do from the types of products that we build to the kind of marketing that we do.

Intellectual property

This mostly applies to technology and scientific ventures, so just skip this if you don’t need to discuss your patents and other intellectual property.

But, if you have intellectual property that is proprietary to your business and helps your business defend itself against competitors, you should detail that information here. If you have patents or are in the patent application process, this is the place to highlight those patents. Equally important to discuss is technology licensing—if you are licensing core technology from someone else, you need to disclose that in your business plan and be sure to include details of the financial relationship.

Business structure and ownership

Your company overview should also include a summary of your company’s current business structure. Are you an LLCA C-corpAn S-corpA sole proprietor? In a partnership?

Be sure to define provide a review of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Company history

If you are writing a business plan for an existing company, it’s appropriate to include a brief history of the company and highlight major historical achievements. Again, keep this section short—no more than a few paragraphs at most.

This section is especially useful to give context to the rest of your plan, and can also be very useful for internal plans. The company history section can provide new employees with a background on the company so that they have a better context for the work that they are doing and where the company has come from over the years.

Location

Finally, the company overview section of your business plan should describe your current location and any facilities that the company owns.

For businesses that serve consumers from a storefront, this information is critical. Also, for businesses that require large facilities for manufacturing, warehousing, and so on, this information is an important part of your plan.
how to write a business plan

Financial plan

Last, but certainly not least, is your financial plan chapter. This is often what entrepreneurs find most daunting, but it doesn’t have to be as intimidating as it seems. Business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. That said, if you need additional help, there are plenty of tools and resources out there to help you build a solid financial plan.

A typical financial plan will have monthly sales and revenue projections for the first 12 months, and then annual projections for the remaining three to five years. Three-year projections are typically adequate, but some investors will request a five-year forecast.

Following are details of the financial statements that you should include in your business plan, and a brief overview of what should be in each section.

Sales forecast

Your sales forecast is just that—your projections of how much you are going to sell over the next few years.

A sales forecast is typically broken down into several rows, with a row for each core product or service that you are offering. Don’t make the mistake of breaking down your sales forecast into excruciating detail. Just focus on the high-level at this point.

For example, if you are forecasting sales for a restaurant, you might break down your forecast into these groups: lunch, dinner, and drinks. If you are a product company, you could break down your forecast by target market segments or into major product categories.

Your sales forecast will also include a corresponding row for each sales row to cover Cost of Goods Sold, also known as COGS (also called direct costs). These rows show the expenses related to making your product or delivering your service. COGS should only include those costs directly related to making your products, not regular business expenses such as rent, insurance, salaries, etc. For restaurants, it would be the cost of ingredients. For a product company, it would the cost of raw materials. For a consulting business, it might be the cost of paper and other presentation materials.

Personnel plan

Your personnel plan details how much you plan on paying your employees. For a small company, you might list every position on the personnel plan and how much will be paid each month for each position. For a larger company, the personnel plan is typically broken down into functional groups such as “marketing” and “sales.”

The personnel plan will also include what is typically called “employee burden,” which is the cost of an employee beyond salary. This includes payroll taxes, insurance, and other necessary costs that you will incur every month for having an employee on your payroll.

Profit and loss statement

Also known as the income statement, the profit and loss (or P&L) is where your numbers all come together and show if you’re making a profit or taking a loss. The P&L pulls data from your sales forecast and your personnel plan and also includes a list of all your other ongoing expenses associated with running your business.

The P&L also contains the all-important “bottom line” where your expenses are subtracted from your earnings to show if your business is making a profit each month or potentially incurring some losses while you grow.

Download the Business Plan Template today!

A typical P&L will be a spreadsheet that includes the following:

  • Sales (or income or revenue). This number will come from your sales forecast worksheet and includes all revenue generated by the business.
  • Cost of goods sold (COGS). This number also comes from your sales forecast and is the total cost of selling your product. For service businesses, this can also be called cost of sales or direct costs.
  • Gross margin. Subtract your COGS from your sales to get this number. Most profit and loss statements also show this number as a percentage of total sales (gross margin / sales = gross margin percent)
  • Operating expenses. List all of your expenses associated with running your business, excluding the COGS that you already detailed. You should also exclude taxes, depreciation, and amortization. However, you do include salaries, research and development (R&D) expenses, marketing expenses, and other expenses here.
  • Total operating expenses. This is the sum of your operating expenses.
  • Operating income. This is also known as EBITDA, or earnings before interest, taxes, depreciation, and amortization. This is a simple calculation where you just subtract your total operating expenses and COGS from your sales.
  • Interest, taxes, depreciation, and amortization. If you have any of these expense streams, you will list them below your operating income.
  • Total expenses. Add your operating expenses to interest, taxes, depreciation, and amortization to get your total expenses.
  • Net profit. This is the all-important bottom line that shows if you’ve made a profit, or taken a loss, during a given month or year.

Cash flow statement

The cash flow statement often gets confused with the profit and loss statement, but they are very different and serve very different purposes. While the P&L calculates your profits and losses, the cash flow statement keeps track of how much cash (money in the bank) that you have at any given point.

The key to understanding the difference between the two statements is understanding the difference between cash and profits. The simplest way to think about it is when you make a sale. If you need to send a bill to your customer and then your customer takes 30 or 60 days to pay the bill, you don’t have the cash from the sale right away. But, you will have booked the sale in your P&L and shown a profit from that sale the day you made the sale.

A typical cash flow statement starts with the amount of cash you have on hand, adds new cash received through cash sales and paid invoices, and then subtracts cash that you have paid out as you pay bills, pay off loans, pay taxes, etc. This will then leave you with your total cash flow (cash in minus cash out) and your ending cash starting cash + cash in – cash out = ending cash).

Your cash flow statement will show you when you might be low on cash, and when it might be the best time to buy new equipment. Above all, your cash flow statement will help you figure out how much money you might need to raise or borrow to grow your company. Since an operating business can’t run out of cash without having to close its doors, use your cash flow statement to figure out your low cash points and consider options to bring in additional cash.

Balance sheet

The last financial statement that most businesses will need to create as part of their business plan is the balance sheet. The balance sheet provides an overview of the financial health of your business. It lists the assets in your company, the liabilities, and your (the owner’s) equity. If you subtract the company’s liabilities from assets, you can determine the net worth of the company.

Instead of providing additional detail on the balance sheet here, I’ll refer you to this article on building and reading balance sheets.

Use of funds

If you are raising money from investors, you should include a brief section of your business plan that details exactly how you plan on using your investors’ cash.

This section doesn’t need to go into excruciating detail about how every last dollar will be spent, but instead, show the major areas where the investors’ funds will be spent. These could include marketing, R&D, sales, or perhaps purchasing inventory.

Exit strategy

The last thing that you might need to include in your financial plan chapter is a section on your exit strategy.

An exit strategy is your plan for eventually selling your business, either to another company or to the public in an IPO. If you have investors, they will want to know your thoughts on this. If you’re running a business that you plan to maintain ownership of indefinitely, and you’re not seeking angel investment or VC funding, you can skip the exit strategy section. After all, your investors will want to get a return on their investment, and the only way they will get this is if the company is sold to someone else.

Again, you don’t need to go into excruciating detail here, but you should identify some companies that might be interested in buying you if you are successful.

how to write a business plan

Appendix

An appendix to your business plan isn’t a required chapter by any means, but it is a useful place to stick any charts, tables, definitions, legal notes, or other critical information that either felt too long or too out-of-place to include elsewhere in your business plan. If you have a patent or a patent pending, or illustrations of your product, this is where you’d want to include the details.

Further reading

If you want even more details on creating your business plan, please take a look at these articles. They will guide you through the details of creating a winning plan that will impress your investors:

Business planning tools and downloads

It can be very helpful to view some completed business plans as you go through the planning process. I encourage you to take a look at our sample business plan library and download our free business plan template.

You might also want to check out our business plan template available through our software, LivePlan. You can also check out LivePlan’s business plan consulting, which will give you a professional business plan written by an MBA in five business days.

Was this article helpful?

Source link

Be Careful How ‘Fyre’d’ up You Get About Influencer Marketing

Fyre Festival was an immense marketing success, which set it up to be an epic failure in execution.


5 min read

Opinions expressed by Entrepreneur contributors are their own.


You’ve heard the one about the disastrous music festival that never happened. Of course you have. With two documentaries (one on Netflix, the other on Hulu) and countless articles about it, the Fyre Festival debacle has penetrated the global zeitgeist.

Yet beyond a healthy dose of schadenfreude, the failure of Fyre certainly offers some valuable lessons in marketing and branding, specifically regarding its influencer campaign.

Leasing the social media “real estate” of supermodels and other Instagram influencers is certainly nothing new. Fyre Festival organizers paid Kendall Jenner an astonishing $250,000 for a single Instagram post (since deleted) and that was only one instance. Now Jenner and other models and Instagram influencers may have to testify in bankruptcy court about the money disgraced organizer Billy McFarland paid them.

While influencer marketing admittedly sometimes yields phenomenal results, there are serious risks to taking an unprincipled or haphazard approach to its implementation. Entrepreneurs need to be well aware of these risks before committing funds to a marketing program that relies heavily on the fleeting nature of “Internet celebrity.”

Related: Creator of Doomed Fyre Festival Gets 6-Year Prison Sentence

Influencer marketing offers little to no accountability.

So, your preferred influencer has a million followers on Instagram. Are those followers real or fake?

Even Fortune 500 companies can’t always tell. Look at Procter & Gamble, for example. Last year, two of their brands (Olay and Pampers) placed in the top 10 brands using influencers with large fake follower counts. The number one brand on that list was Ritz-Carlton. The hotel and hospitality group used “influencers” whose followers were 78 percent bought and paid for, instead of the real deal.

Olay and Pampers had to rely on someone else (the Points North Group) to find and illuminate this problem for them. You can use tools such as Instascreener to identify influencers with large fake follower counts before you pay for their services.

Influencers can put the focus on the wrong thing.

One of the mistakes Fyre organizers made was prioritizing buzz over substance. Tasking multiple influencers (mostly young, popular models) to post content simultaneously certainly achieved the buzz they sought, but it came at an astonishing price. The focus on the big-name supermodels ended up costing cash that could have gone elsewhere—say, to building the necessary infrastructure for the festival location.

Too much focus on the big name hawking your brand doesn’t necessarily translate to favorable views or conversions for your actual product or service.

In the long run, influencers grab eyeballs but don’t necessarily help grow businesses. It’s all too easy to get caught up in the star-gazing aspect of it all and wind up valuing essentially meaningless metrics over actually building your brand.

Related: 4 Influencer Marketing Lessons Learned From the Calamitous Fyre Festival

The risk of guilt by association flows both ways.

If the influencer goes off-script or causes a scandal, you get tanked too. And there seems to be no end of ways for some influencers to get into public trouble. Just ask YouTuber Logan Paul, whose posting of video footage of a dead body earned him months of bad press and tough consequences.

Moreover, it doesn’t take that kind of spectacularly poor judgment to prompt a public outcry and make sponsors want to run for the hills. Ask Fox News host Laura Ingraham, who lost dozens of sponsors thanks to a tweet that many perceived as mocking Parkland shooting survivor David Hogg.

The nature of the social media milieu that gave rise to influencer status in the first place rewards those digital celebrities for saying and doing surprising and even shocking or outrageous things. If there’s a close association between your brand and that influencer, then, you can expect some significant blowback and pressure to choose a side of the debate and cut ties.

Related: 10 Influencer Marketing Trends to Keep Your Eye On

Influencer marketing offers questionable value.

These days, influencer marketing has been so constrained that there may be no value there for your customer or brand. SEO expert and Moz founder Rand Fishkin noted this last year in a tweet, when he observed that influencer marketing used to mean a brand would “discover all the sources that influence your audience and do marketing (of all kinds) in those places.”

This approach to influencer marketing is value-added. It prioritizes the customer and the brand over ego-inflating intangibles. Moreover, it actively supports and furthers brand awareness through a diversified marketing approach as opposed to putting all of your marketing eggs into a single overvalued basket.

Finally and perhaps most importantly, it’s often difficult to tell just what you’re getting for your money. Measuring the return on your investment in influencer marketing is made more complicated since many of the usual benchmarks (likes, etc.) equate to vanity metrics. They don’t necessarily translate into sales.

Influencer marketing still works when it’s done less cynically and more aligned with Fishkin’s first formulation. Find out what and who influences your target audience, then commit to a diversified marketing approach that reaches out to that audience where they already live.



Source link

A Business Perspective on the Impact of Production Quality on Video Advertising

A compelling story is far more important that shinier production quality.


5 min read

Opinions expressed by Entrepreneur contributors are their own.


The adage, “you get what you pay for,” doesn’t always hold true. When it comes to video advertising, Wistia, a video software company, found other factors drive impact more so than the production cost.

In their recently released report, “Does Production Quality Matter in Video Advertising?”, the Wistia team concluded that large and small businesses alike need to consider more than price before they assume video advertising exceeds their market budget.

Research Method

Wistia wanted to answer the following question: Do companies have to spend hundreds of thousands of dollars on video production to get a return or can they use something as simple and low-cost as an iPhone to create compelling ads that engage viewers?

To find out, they worked with Sandwich Video to create three two-minute videos for Wistia’s video creation tool, Soapbox. They used similar audience targeting and ad copy for each and launched the ads on YouTube and Facebook. However, each of the three videos was produced for a very different price: $1,000, $10,000, and $100,000.

The research focused on two key performance indicators (KPIs). There were Cost Per Install and Cost Per 25 percent View. These KPIs provided a way to calculate the return on investment (ROI) as easily as possible plus directly relates to a company’s bottom line.

The advertising budget for this study was split across three ad types that included direct response video ads, sequential ads and video carousel ads. For example, with sequential advertising, a person viewed the $1,000 ad, then they would be shown the $10,000 ad next, and so on. They also used the Facebook carousel ad format, which allowed all three videos appear at once so that viewers could watch and compare each one.

In terms of targeting, Wistia used two core targets on Facebook, which were lookalike audience based on a customer match and an engagement audience targeting those audience members who tended to watch less than 75 percent of another video.

With YouTube, the targeting strategy varied from the one used for Facebook due to the more complex nature of this video platform. The focus was in-market audiences who previously searched for advertising, marketing, or video software in Google; custom intent based on non-brand search terms; topics related to marketing, sales, and video software; and remarketing in terms of those audience members who previously interacted or watched a Wistia video on YouTube.

Related: The Future of Video Advertising Is Artificial Intelligence

Key Findings

Here’s what they discovered after conducting the research:

Storytelling means more: Results showed that the $10,000 video performed twice as well as the other two videos. The Wistia team thought originally that the $10,000 version had the best narrative and product alignment. According to viewers, the $10,000 resonated the most in terms of feeling authentic and meaningful versus the $100,000 ad that appeared to be “too polished.” According to one viewer, the most expensive ad felt more like a company was selling them something versus the other ads that felt more like a small business who wanted to connect with them.

Just recently, two UK ads for the holidays demonstrated a similar result. More people connected with a John Lewis ad made for 50 pounds (about $65) versus the Elton John ad that cost more than seven million pounds (about $9.1 million) to produce. Although numerous viewers found the Elton John ad to be emotional, more were touched by the other ad because they could relate more to the person in the ad than a celebrity.

In returning to results from the Wistia videos, the $10,000 video delivered the best performance across all factors, including targeting, advertising type and ad copy. For example, the $10,000 video had a Cost Per Install on Facebook fo $23.57 versus the $100,000 video which had a Cost Per Install of $77.54.

Video production doesn’t need to be polished: The results showed that the iPhone ad performed just as well and sometimes better than the video that included Hollywood actors and film crew.

For example, Wistia spent $1.09 on Facebook to get one viewer to watch 25 percent of the $1,000 ad and $1.53 to get the same impression for the $100,000 ad. Therefore, the average Cost Per Install for the $1,000 ad was 30 percent less than the $100,000 ad. There was a slight advantage for the $100,000 ad on YouTube. The conclusion was that there isn’t enough return on the investment to necessarily justify spending $100,000.

What this means for businesses of all sizes.

The good news for small and large companies alike is that they don’t need to figure out how to create a huge budget for their video advertising campaigns. Overall, the $10,000 video performed the best, and there wasn’t much difference in results between the $1,000 and $100,000 videos. Instead, all businesses should focus on developing compelling stories for their target audiences versus production quality.

This is especially positive for small business owners who previously assumed video advertising was not financially feasible. And, the lesson here for big companies is that throwing money at a marketing tactic isn’t the best solution.

Related: 4 Keys to Creating the Video Ad Your Business Needs

Key recommendations for video advertising in 2019.

With that in mind, Wistia shared some advice for how to approach video advertising in 2019:

  • Start with a small video advertising budget and focus on creating the content over the production cost.

  • Consider hiring an in-house video producer who can manage the video advertising process and own a company’s brand voice.

  • Split test variants rather than just the variables that deal with targeting and ad copy support.

  • Look at video as a mechanism for driving more action from prospects, leveraging direct response, conversion-focused video ads.

  • Create a series of video ads to take advantage of Facebook’s sequential ad and video carousel formats.

Source link

The Importance of TAM, SAM, and SOM in Your Business Plan

TAM SAM SOM

Having viewed several business plans over the years, a common (and very important) item missing from most plans is a breakdown of the company’s TAM, SAM, and SOM in the marketing section of their plan.

Wondering what these acronyms mean? Well, you’re not alone—many entrepreneurs are not familiar with these terms.

Here’s a quick explanation of what they mean, followed by an example:

  • TAM = Your Total Available or Addressable Market (everyone you wish to reach with your product)
  • SAM = Your Segmented Addressable Market or Served Available Market (the portion of TAM you will target)
  • SOM = Your Share of the Market (the subset of your SAM that you will realistically reach—particularly in the first few years of your business—this is your target market)

Identifying your TAM, SAM, and SOM requires some market research (levels of research vary depending on your product and market potential), but once you gather the research through your market analysis, you’ll have a better idea of the percentages that coincide with each area.

Identifying your SOM, or your target market, is an important step because building a marketing plan around your TAM—in other words, everyone—is a huge waste of resources. Figuring out who exactly you think will actually buy your product will help you focus reach.

Hear more about market research and your target market with Peter and Jonathan on the twelfth episode of The Bcast, Bplans official podcast:

Click here to subscribe to The Bcast on iTunes »

TAM SAM SOM

Here’s an example:

You’re starting a concierge service in your city that focuses on doing tasks/running errands for busy people, and people who need additional assistance (the elderly, individuals who are handicapped, and so on).

Your TAM (total available market) would be all busy people, elderly, and handicapped people in your city. If your town has 150,000 people, you may find (through market research) that total possible demand for your business in your city is 15 percent (or 22,500 people).

Note: If you have a competitor in your market, your TAM would be smaller, since you will be sharing this market with another company.

Your SAM (segmented addressable market) would be the portion of that 22,500 whom your current business model is targeting (this will be outlined in your business plan). For example, your business model is being set up to service 7,500 people a year who are ages 35 to 55, with small children and disposable income who live or work within a 2-mile radius of downtown, this means your SAM would be 33 percent of your TAM (or 5 percent of your total city’s population).

Your SOM (share of the market) would be the portion of your SAM that your business model can currently realistically serve. For example, you may only have three employees (yourself and two others), so realistically what percentage of your SAM (7,500) can you reach in the first 2 to 3 years?

Let’s assume your company can effectively provide concierge services to 100 people a month or 1200 people a year. This means your SOM is about 16 percent of your SAM (or around 5 percent of your TAM, or a little under 1 percent of your total city’s population).

If you’re seeking funding, savvy investors will ask you for these items in your business plan, and they’ll want you to be able to back up your numbers. This is why conducting some market research up front is important—and even advisable before you begin writing your business plan. It gives you the validation of your market potential.

Hopefully, this clears up a bit of the market reach acronym soup!

New Call-to-action

Was this article helpful?

Caroline CummingsCaroline Cummings
Caroline Cummings

An entrepreneur. A disruptor. An advocate. Caroline has been the CEO and co-founder of two tech startups—one failed and one she sold. She is passionate about helping other entrepreneurs realize their full potential and learn how to step outside of their comfort zones to catalyze their growth.

Caroline is currently executive director of Oregon RAIN. She provides strategic leadership for the organization’s personnel, development, stakeholder relations, and community partnerships. In her dual role as the venture catalyst manager, Cummings oversees the execution of RAIN’s Rural Venture Catalyst programs. She provides outreach and support to small and rural communities; she coaches and mentors regional entrepreneurs, builds strategic local partnerships, and leads educational workshops.



Source link

The Secret Weapon to Experiencing Explosive Business Growth

Clarity provides the power to build relationships and achieve goals.


5 min read

Opinions expressed by Entrepreneur contributors are their own.


It’s the middle of the night and you have to use the restroom. It’s pitch dark when you get up. You know your bedroom but navigating in the darkness you stub your toe and are using choice language to describe how frustrated you are. Just a few seconds in the darkness affected your path to successfully accomplishing your middle-of-the-night goal.

It works the same way in our lives and business. That “darkness” takes a different form but it has the same effect. We “stub our toes” in many different ways when we lack clarity. If your business is not achieving explosive growth right now, it’s more than likely that your lack of clarity is the culprit.

There are many factors and parts to growing a business but not being clear is the cause. If you’re going to make this a year of reaching new milestones, make sure you have clarity in these three areas of your business.

1. Get clear on why you’re building a business.

The idea behind entrepreneurship is appealing. You can be your own boss and set your schedule. You can generate an income doing what you enjoy doing. So, you start a business but you may not have a major why behind the business.

You look for what will make money and then get to work. After a while, things just don’t seem to be working the way you’d hoped. There was no why driving the business. That lack of clarity leads to you building a job. Your business should be started and built around a topic and mission you’re passionate about.

The why is your road map and the fuel to help you keep driving towards your goals. Even if you have been in business for a while, it’s important to take a step back and reconnect with your why. Get very clear on the overall strategy and not so much the tactics. With a clear main strategy, the tactical everyday pieces are easier to implement.

Related: Clarity on Your Goals Is Key to Growing a Business That Attracts High-End Clients

2. Get clear on whom your business caters to and how you speak to your customers.

You’ve read more than a few articles about the need to find your niche and for good reason. You can’t reach everyone and you shouldn’t try. You need clarity in who your business helps and what it helps them do. A passion for wellness and desire to teach people how to be healthier is too broad. You can niche down and teach people how to use food as fuel. It works the same way with all topics.

When you have the clarity of the niche audience you’re targeting, you can find where they are and the best way to reach them. You can talk to them in their language and use the messaging they understand and respond to. The more you reach them and speak with the specifics of that tribe, the more your business will grow. Even in your free content, you should be demonstrating that clarity and speaking to your niche.

If you look at big brands and companies, you’ll notice how they cater to their specific target customer base. It’s the reason high-end brands don’t have sales — that’s not what their target customers expect or respond to.

Related: Find Clarity About Your Life’s Purpose With This Simple Exercise

3. Get clear on where this is all going. 

In the same vein as getting clarity on your why, you should be clear on where you’re heading in your life and business — they work hand-in-hand. If you don’t have clarity in your life goals, it will be hard to focus on building your business. You started and are building a business to create freedom and financial security in your life.

What does your dream life look like? What would an ideal day look like if money were no object? Let your mind visualize where this is all going. To get anywhere, you have to see what the destination looks like. Take some time today to get clear. If you have that clarity, take some time to reconnect with the vision.

Clarity is power. You can help you build successful relationships, goals, wealth, and your dream business. When there are 100 things to do, our focus tends to be on what needs to get done. Change your mindset. Think like a leader. Get clarity on the strategy and how it all connects together. Then, map out the tactics and take action. You can experience explosive growth once you get clear.

Source link

KFC Enlists RoboCop to Protect Secret Recipe in New Campaign

Colonel Sanders’s newest incarnation is fiercely defending the fried chicken chain’s 11 blends of herbs and spices.


2 min read


KFC — back at it again with the eccentric Colonel Sanders incarnations. 

In the past, the fried chicken chain’s founder and mascot has been portrayed by comedian Jim Gaffigan, WWE star Dolph Ziggler, actor Vincent Kartheiser and a whole host of others. But in Kentucky Fried Chicken’s newest ad campaign, Colonel Sanders is brought to life by none other than RoboCop — yes, the droid police officer portrayed in the dystopian 1987 film of the same name. The character in the ad is voiced by Peter Weller, the original RoboCop actor.

The newly-minted “RoboColonel” appears in a few different ad spots. In one video, KFC hires RoboCop to protect the chain’s famed secret blend of 11 herbs and spices by safely transporting it to an underground bunker in Switzerland. Other ad spots include RoboCop demanding a family to comply and try KFC’s $20 Fill Ups meals; answering a question about the secret recipe with, “If I told you, then I’d have to kill you”; and scanning the streets for fried chicken and hungry consumers.

We’d buy that for $20. (My editor assures me, a RoboCop noob, that this is a good joke.) 

Source link

These 6 Coffee Marketing Tricks Are a Perfect Blend for Your Cannabis Brand

Cannabis brands can learn a few lessons from the love between customers and specialty coffee


6 min read

Opinions expressed by Green Entrepreneur contributors are their own.


Cannabis and coffee are similar industries in many ways.

Both markets grow from a strong love for a plant (cannabis/coffee beans), both have developed a multitude of processing options (THC activation methods/roasting levels) and their customers enjoy a wide variety of consumption methods (flower, concentrates, etc./espresso, drip, cold brew, etc.).

It’s natural for these industries to blend well. Cannabis brands including Willie’s Reserve and Jane West have launched lines of CBD coffees. Investment groups including Canaccord Genuity believe beverages infused with THC and CBD have the potential to become a $600 million market in the next four years.

Savvy cannabis brands should take note of these six artisan coffee branding practices to generate buzz around their cannabis business.

1. Get nerdy about your product.

There’s a pretty good chance that what excites you as a cannabis geek will get your customers geeking out, too, so let your geek flag fly on your menus, website and packaging.

From the plant species to the growing conditions to the harvesting process, coffee and cannabis users alike love to learn more about the plants they cherish. 

Brandywine Coffee Roasters, like many craft coffee brands, inscribes on their packaging every delicious detail of their products, from the farmer’s name to the altitude where the beans grew. Eager readers devour it.

Telling customers the time of harvest doesn’t directly make for a better blunt or cup of coffee, but it creates a connection with the source of the product that enhances the consumer’s overall experience. Whether you grow, process or dispense cannabis, tell the story of how it is crafted for quality and potency.

Related: Do You Drink More Coffee Than Elon Musk, Mark Zuckerberg and Other Creative Leaders?

2. Guide your customers to better consumption. 

No matter if they are talking with a budtender or barista, no one likes being clueless about what to order.

Counter Culture Coffee has made coffee education a key component of their brand to save new customers from feeling like idiots. Across the US, Counter Culture cafes feature Training Centers for lessons on home brewing, cupping fundamentals and the long history of coffee culture. Coffee lovers leave confident and Counter Culture Coffee got to be their hero.

The innovative cannabis industry is always exploring new ways to consume the plant, from new processing methods to techy tools like Pax vape pens. Longtime cannabis users may be unaware of innovations that might enhance their established ritual. Think about what they may be missing out on but don’t know to ask about. Listen to your customer and be ready with both answers and suggestions.

3. Create a like-minded community.

As legalization and consumption of cannabis grows across the US, brands need authentic ways to get involved and make a difference. Make it easier for yourself by finding a few collaborative partners — iife and business are both better when you surround yourself with awesome people. The team at Stumptown Coffee in Portland, Oregon, are experts at co-branded collaborations that expand their brand beyond the coffee shop.

Stumptown partnered with Jacobsen Salt Co. to develop a line of coffee salted caramels; blended their cold brew into Mast chocolates and Tillamook ice cream; and went so far as creating a coffee-stout cheddar (yes, cheese!) with Rouge Creamery.

Co-branding introduces a brand to new audiences who may never otherwise learn about them. While cannabis has restrictions coffee roasters don’t need to worry about, there are still plenty of ways to get creative on partnerships with local artisans. 

4. Stand for something more.

Activism is the heritage of the cannabis industry. It’s also common to find roasters driven by more than just profit. Many are cognizant of the environmental and socio-economic repercussions of the plant they love so much. For some, business practices that make a positive impact are integral to their brand identity. 

Grounds & Hounds Coffee, with blends including Morning Walk and Sit & Stay, donates 20 percent of profits to animal rescue groups. Birds & Beans coffee helps to set aside bird-friendly habitats on coffee farms. Turn to your brand values to find innovative ways to make an impact that is true to your brand and will connect with your audience.

Related: Stand Tall for Your Values and Your Cannabis Brand Will Stand Out

5. Stay true to your style.

Finding your own style while staying true to your story and mission will be the foundation of a strong brand in the fast growing cannabis industry.

Celebrate the individuality behind your brand. Feel like waking up to beautifully vivid illustrations? Since their launch in 2015 Brandywine Coffee Roasters has painstakingly screen-printed new artwork onto bags of their coffee. Inspired by their brand theme of “artfully sourced” ingredients, and their close location to the Brandywine School of Illustration, each illustration doubles as an up-sell with designs available as t-shirts, mugs and art prints.

Chicago-based Dark Matter Coffee has taken a different approach to their packaging artwork. Each month, Dark Matter commissions a different artist to develop a bag design. Their colorful, anything-goes approach has resulted in a brand style that delivers instant recognition on retail shelves as the wildest thing in the coffee aisle.

The best way to create a distinct visual style that sticks with customers is to know what your brand stands for and who it is speaking to. After all, your brand design is there to give a warm and friendly Oh hey! to your core audience and invite them to share the wonderful experience your business is hosting.

6. Keep your brand uplifting and energizing.

While society perceives and regulates these two mood-enhancing, benefit-rich plants differently, the passion and celebration behind cannabis and coffee make the growing merger of these two industries a new frontier of possibility for brands.

The growing cannabis industry offers many opportunities unavailable anywhere else. By learning from other industries, and learning from their mistakes as well as their successes, smart cannabusinesses can build their agility to navigate the unique challenges without losing momentum.

Source link

Industry Analysis: Know Your Industry Before You Start Your Business

Know Your Industry Before You Start Your Business

This article is part of our Business Startup Guide—a curated list of our articles that will get you up and running in no time!

I bet you agree: You need to know the industry you want to start a business in, and the kind of business you want to start, before you can start it.

Industry analysis is part of good management. That’s not just for the business planning, but rather for business survival, beginning to end. Most of the people who successfully start their own business have already had relevant business experience before they start, most often as employees.

But in this article, I focus on how to consolidate and formalize that industry knowledge into a formal business plan.

Although all business owners need to know their industry, the documented details and explanations are mainly for when you’re writing a business plan you need to show to outsiders, like bank lenders or investors. You’ll need to do some industry analysis so you’re able to explain the general state of your industry, its growth potential, and how your business model fits into the landscape.

And if your business plan is more of an internal strategic roadmap, you should still be very sure—whether you have to prove it to others or not—that you know your market, even if you don’t do a formal industry analysis. Whether you’re a service business, manufacturer, retailer, or something else, you want to know your industry inside and out.

What to cover in your industry analysis

Whether you write it all out in a formal business plan or not, when you’re doing your industry analysis, you’re looking at the following:

  • Industry participants
  • Distribution patterns
  • Competition and buying patterns

Everything in your industry that happens outside of your business will affect your company. The more you know about your industry, the more advantage and protection you will have.

A complete business plan discusses:

  • General industry economics
  • Participants
  • Distribution patterns
  • Factors in the competition
  • And whatever else describes the nature of your business to outsiders

A note on finding industry information

The internet has had an enormous impact on the state of business information. Finding information isn’t really the problem anymore, after the information explosion and the huge growth in the internet beginning in the 1990s and continuing in the 21st century.

Even 10 or 15 years ago, dealing with information was more a problem of sorting through it all than of finding raw data. That generality is truer every day. There are websites for business analysis, financial statistics, demographics, trade associations, and just about everything you’ll need for a complete business plan.

New Call-to-action

Industry participants

You should know who else sells in your market. You can’t easily describe a type of business without describing the nature of the participants. There is a huge difference, for example, between an industry like broadband television services, in which there are only a few huge companies in any one country, and one like dry cleaning, in which there are tens of thousands of smaller participants.

This can make a big difference to a business and a business plan. The restaurant industry, for example, is what we call “pulverized,” meaning that it, like the dry cleaning industry, is made up of many small participants. The fast-food business, on the other hand, is composed of a few national brands participating in thousands of branded outlets, many of them franchised.

Economists talk of consolidation in an industry as a time when many small participants tend to disappear and a few large players emerge. In accounting, for example, there are a few large international firms whose names are well-known, and tens of thousands of smaller firms. The automobile business is composed of a few national brands participating in thousands of branded dealerships, and in computer manufacturing, for example, there are a few large international firms whose names are well-known, and thousands of smaller firms.

Distribution patterns

Products and services can follow many paths between suppliers and users.

Explain how distribution works in your industry:

  • Is this an industry in which retailers are supported by regional distributors, as is the case for computer products, magazines, or auto parts?
  • Does your industry depend on direct sales to large industrial customers?
  • Do manufacturers support their own direct sales forces, or do they work with product representatives?

Some products are almost always sold through retail stores to consumers, and sometimes these are distributed by distribution companies that buy from manufacturers. In other cases, the products are sold directly from manufacturers to stores. Some products are sold directly from the manufacturer to the final consumer through mail campaigns, national advertising, or other promotional means.

In many product categories, there are several alternatives, and distribution choices are strategic.

Amazon made direct delivery a huge competitive advantage, especially in its earlier years. Doordash and competitors chose to be intermediaries between restaurants and customers, and several businesses offer prepackaged meal ingredients delivered with instructions for finishing the preparations in the consumers’ kitchens. Now major grocery chains offer grocery delivery. Red Box made a strategy of DVDs in kiosks. An entire industry of food delivery options gives consumers choices like restaurant meals or fresh meals ingredients being delivered. Many products are distributed through direct business-to-business (B2B) sales and in long-term contracts such as the ones between car manufacturers and their suppliers of parts, materials, and components. In some industries, companies use representatives, agents, or commissioned salespeople.

Technology can change the patterns of distribution in an industry or product category. The internet, for example, changed options for software distribution, books, music, and other products. Cable communication first, and more recently streaming, changed the options for distributing video products and video games. Some kinds of specialty items sell best with late-night infomercials on television, but others end up working on the web instead of television.

Distribution patterns may not be as critical to most service companies, because distribution is normally about physical distribution of specific physical products such as a restaurant, graphic artist, professional services practice, or architect.

For a few services, the distribution may still be relevant. A phone service, cable provider, or an internet provider might describe distribution related to physical infrastructure. Some publishers may prefer to treat their business as a service, rather than a manufacturing company, and in that case distribution may also be relevant.

Competition and buying patterns

It is essential to understand the nature of competition in your market. This is still in the general area of describing the industry or type of business.

Explain the general nature of competition in this business, and how the customers seem to choose one provider over another:

  • What are the keys to success?
  • What buying factors make the most difference—is it price? Product features? Service? Support? Training? Software? Delivery dates?
  • Are brand names important?

In the computer business, for example, competition might depend on reputation and trends in one part of the market, and on channels of distribution and advertising in another. In many business-to-business industries, the nature of competition depends on direct selling, because channels are impractical.

Price is vital in products competing with each other on retail shelves, but delivery and reliability might be much more important for materials used by manufacturers in volume, for which a shortage can affect an entire production line.

In the restaurant business, for example, competition might depend on reputation and trends in one part of the market, and on location and parking in another.

In many professional service practices, the nature of competition depends on word of mouth, because advertising is not completely accepted. Is there price competition between accountants, doctors, and lawyers? How powerful are the insurance decisions in medicine, like in or out of network? How do people choose travel agencies or florists for weddings? Why does someone hire one landscape architect over another? Why choose Starbucks, a national brand, over the local coffee house? All of this is the nature of competition.

The key to your specific industry analysis is a collection of decisions and educated guesses you’ll probably have to make for yourself. There are few pat answers. Maybe it’s easy parking, a great location, great reviews on Amazon or Yelp, or recommendations on social media. You can’t necessarily look this up. It’s the kind of educated guessing that makes some businesses more successful than others.

Main competitors

Do a very complete analysis of your main competitors. Make a list, determining who your main competitors are. What are the strengths and weaknesses of each?

Consider your competitors’:

  • Products
  • Pricing
  • Reputation
  • Management
  • Financial position
  • Channels of distribution
  • Brand awareness
  • Business development
  • Technology, or other factors that you feel are important
  • In what segments of the market do they operate? What seems to be their strategy? How much do they impact your products, and what threats and opportunities do they represent?

Finding competitive information

Competitive research starts with a good web search. Look up competitors’ websites and social media, then search for mentions, reviews, announcements, and even vacancies and job search information. An amazing array of competitive information is posted in plain sight, where anybody can find it.

From, there, for a good review of additional sources of information, I suggest Practical Market Research Resources for Entrepreneurs, also here on Bplans.

Competitive matrix

A lot of businesses organize competitive analysis into a competitive matrix. The standard competitive matrix shows how different competitors stack up according to significant factors.

For more on that, you’ll want to refer to How to Use the Competitive Matrix to Explain Your Position in the Market, also here on Bplans. Or you can take the basic idea from this illustration:

features

Some people also use a SWOT analysis to think about competition in terms of opportunities and threats, the “OT” of SWOT. Opportunities and threats are generally taken as externals, which would include competition, so it’s valuable to run a SWOT analysis on your business to help figure this out.

Was this article helpful?

Source link

How to Land the Digital Marketing Job of Your Dreams

The ‘Marketing, SEO & Affiliate Marketing Super Bundle’ is your guide to digital marketing in 2019.


4 min read

Disclosure: Our goal is to feature products and services that we think you’ll find interesting and useful. If you purchase them, Entrepreneur may get a small share of the revenue from the sale from our commerce partners.


Whether you’re looking to jumpstart a new career or take your current skills up a notch, the Marketing, SEO & Affiliate Marketing Super Bundle will give you the tools you need to become a digital marketing pro. With nine jam-packed courses and 57 hours of instruction, you’ll be well-versed in the top marketing tools and skills of 2019, including Facebook Ads, Google AdWords, MailChimp and more. Here’s what’s included:

MailChimp 101: Learn Email Marketing

MailChimp has proven highly successful in helping businesses build their brand and engage with audiences online. This course will teach you how to optimize content, build your email lists and A/B split test emails, all of which are desirable skills on your resume.

Facebook Ads & Facebook Marketing Mastery Course

Master one of the most important advertising mediums used today and you’ll be in a position to take the job market by storm. In this course, you will learn how to create different Facebook ads, optimize them for increased conversions and decreased costs, and grow your Facebook likes and post engagement.

The Ultimate Guide To Google AdWords

Every day people use Google to find new products, which is why knowing how to optimize an AdWords campaign is a vital marketing tool. This course will teach you how to set up your AdWords account from scratch, select and use keywords to your advantage, and structure campaigns that will drive high-quality traffic to your website.

Retargeting & Remarketing: The Ultimate Guide Made Easy

Retargeting is an effective marketing strategy because it targets people who are already familiar with a brand and have recently demonstrated interest. In this course, you’ll learn how to drive traffic and get the most out of that traffic and also dive deeper into content marketing, AdWords and targeted display.

Build The Perfect SEO-Optimized WordPress Website from A-Z

Web design is a sought-after skill these days and WordPress is no exception. This course will teach you how to build an SEO-optimized site from scratch and how to repeat the process quickly. Through step-by-step instruction, you’ll learn how to set up domain registration, site hosting, the back-end, and more.

The Complete SEO & Backlink Master Course

SEO is more than a fancy buzz word that employers like to hear, it’s crucial to optimizing a blog or website. This course lets you explore keywords, on-page optimization and takes an extensive look at backlinking, so you can learn how to use quality links that will boost your site’s search ranking.

Amazon Traffic, Sales and Marketing for Sellers & Affiliates

If you’re interested in learning how to sell tangible products as either an Amazon FBA seller or an affiliate, this course will teach you everything you need to know, including how to market your Amazon FBA listings & Amazon affiliate links.

SEO Affiliate Domination

Thanks to the Internet, there are countless ways to make money using free or low-cost strategies. The goal of this course is to show you how to become successful using e-commerce, affiliate marketing, SEO, and video marketing. You’ll also gain a better understanding of how to build brand authority.

Affiliate Marketing: The Fast Track Formula

There’s a reason affiliate marketing is so popular — it’s one of the most productive online business models out there. This course will take you through a five-step method for earning commissions fast. You’ll learn how to find a domain, set up a website, and use social media to increase your exposure, traffic, and ultimately sales!

If you’ve been considering a career in digital marketing, this super bundle is a must-have and right now you can get it for a steal. The entire bundle is valued at $1265.95, but it’s on sale for $37. Also, with lifetime access, you’ll always be able to refer back to these courses, should you ever need a refresher.

Source link