In my last blog entry, Global Entrepreneur Week, I discussed how people who are finding themselves unemployed as a result of the global economic crisis are considering starting their own business. Although it takes sufficient planning and financial resources to starting a business, there are signficant professional and financial rewards in becoming an entrepreneur. If you have the determination and ability to handle risks, having your own business may be the right opportunity for you.
I occasionally teach seminars on entrepreneurship and business development and I will summarize some basic concepts in starting a business. (Accompanied photo is from a seminar I taught at CFDE University in Port-au-Prince, Haiti.) There are many business plan templates available, but most plans share the same components. Aspiring entrepreneurs should use their business plan as a road map to growing and sustaining their enterprise. To start the planning process, an entrepreneur should define the following components:
1. Mission. Have a clear statement of your company's long-term mission. Try to use words that will help direct the growth of your company.
2. Goals and Objectives. For the initial five years, state your specific measured objectives, market share objectives, and revenue/profitability objectives.
3. Problems and Opportunities. State consumer problems and define nature of product/service opportunities created by those problems.
4. Deliverable. Clearly define your product or service and its value to your customer or client.
5. Competition. Summarize your competition and outline your company's competitive advantage. What makes your product or service different from your competitors? Other than an initial lack of planning, one common error entrepreneurs make is thinking their competitive advantage is simply price related. Entrepreneurs need to build value to their product and service.
6. Market Analysis. Summarize the market: past, present, and future. Review those changes in market share, leadership, players, market shifts, costs, pricing or competition that provide the opportunity for your company's success.
7. Marketing Strategy. A comprehensive marketing plan should incorporate two elements, Strategic Marketing and Operational Marketing.
Strategic Marketing is determining how your company competes against its competitors in a market place. In particular, it generates a competitive advantage relative to its customers.
Operating Marketing is executing marketing functions to attract and keep customers to maximize the value derived for them as well as to satisfy the customer with prompt services and meeting the customer expectations. The marketing mix should include product, pricing, promotion, and placement.
The 3 R’s – Retain, Raise, Recruit
In the December 2006 issue of Jewish Life & STYLE, Brian Rouff, a partner at Imagine Marketing of Nevada, Inc., a full-service advertising, marketing, and public relations firm based in Henderson, Nevada, wrote an article, "Marketing Basics."
"In other words, the three ways to grow your business. First, retain your customers or clients by establishing a solid relationship based on trust and credibility. Next, raise the amount of money they spend with you through excellent communication skills and innovative offerings. Finally, recruit new business via personal selling and a targeted marketing campaign. Notice that recruit comes last. You shouldn't use your resources to bring in new customers until you're sure you've maximized your existing ones."
8. Financial Plan. The Financial Plan should include a projected Profit and Loss (P&L) statement, cash flow analysis, and balance sheet for the first three fiscal years.
9. Risks and Rewards. Outline the risks and rewards (financial and personal) of starting your own business.
I hope this outline will facilitate the process of starting your own business. If I can be of any assistance or should you have specific questions, please feel free to contact me via email at firstname.lastname@example.org or Skype at aarondrose. In addition, I welcome comments and testimonials from those of you who have ventured into entrepreneurship. Thank you and good luck!!
Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.