business plan

Small Business Guide: How To Create A Restaurant Business Plan

The upcoming decade spells a lot of opportunities for businesses to revive themselves as the world returns to stability. This optimism also applies to the owners of small businesses, who can finally use this green light to take their business ideas and formulate them into a proper plan. However, a business plan is not taken into consideration often. This simple strategic approach can help entrepreneurs get more organized.

Since the food, beverages and hospitality industry differ a lot from the product and services based market, there are not a lot of measuring yardsticks for small business owners aiming to open their own restaurant, chain or franchise. This blog aims to help such entrepreneurs to regroup and create an effective business plan for their establishment with consideration to the unique requirement and demands of a restaurant. Ready to dive into the nitty-gritty? Let’s get started.

What is a business plan?

A good business plan is the foundation and base structure of your business. Based on what you have charted down, it can guide an entrepreneur and the management team through every step of forming and running a business. A business plan is also used as the entrepreneur’s roadmap for organizational structure, workflows, and growth of a new venture. It helps organize and bring all the key aspects of a business to an interrelated course of action.

Business plans can assist a small business owner to acquire funding or onboard new business investors. Such partners like lenders, shareholders and investors need to see that you have a foolproof approach to do what it takes to give them the ROI they want. A business plan is your pitch to all parties you wish to work with.

Structure of an effective business plan:

An effective business plan that covers all the elements of a restaurant consists of the following sections. These are subject to modification depending on how intrinsic and extensive your goals are.

Executive Summary: The executive summary of your business plan comprises the base note and driving force of your restaurant. Here, you talk about the ultimate goal of your restaurant. Start by explaining what the restaurant does, its location, vibe, cuisine, speciality, USP, and other elements in brief that will paint a picture in the mind’s eye of a reader. For creative effect, you can also add sketches and graphics of how you plan the place to look, capturing the vibe and speciality of the place. An executive summary is supposed to be kept brief and to the point, which can all be elaborated upon in the next sections with document automation.
Establishment Description: Here, you get to go into the details of your restaurant or food chain. From the location and seating capacity to all the tiny details that will make your restaurant a success, all of it is mentioned in the establishment description. You can add sample menu lists, event ideas, and more. As a business owner, consider this section the second most important one since this is the dream-seller to your investors. Talk about the industrial advantage that you have and what makes your plan unique from the rest of the competitors. Describe the set-up, kitchen, dining options, and staffing capability with their training to give further clarity. This section also involves all your permits and licencing.
Products and Services: As a restaurant, your products and services are all-encompassing. If you have curated a menu, this is the section to add it to. Add your food and beverage selection as well as the restaurant speciality that will win customers over by tantalizing their taste buds. Since your business plan can be more creatively inclined, don’t feel shy to add visual representation for effect.
Market Analysis: A wise business person knows the market inside out. Your competition will be all restaurants around a particular area, including giant chains. To make your business plan viable, make sure that you have done your research on the performance and figures of these establishments along with a strategy to surpass their success and become a dominant business.
Stock and Inventory Supply: One of the biggest questions for restaurants and hotels is how they plan to source their raw materials and alcohol. If you’re a business that plans to provide an authentic and exotic experience to customers, find the right vendors for organic and ethically sourced produce and meat for your menu. Apart from these, getting your ingredients and spices from wholesalers that give you the best deals with zero compromise on quality is a must. Make sure that you have options so that the fulfilment failure due to unexpected reasons get covered by the other in your inventory supply. For alcohol, you can get in touch and partner with a wholesaler of alcoholic drinks to be your supplier. However, make sure that they have all their paperwork and licensing in order.
Logistics: Deciding upon the logistics of your delivery system whether you plan to partner with third-party brands or have your own team is to be explained here. Make sure to add the percentage cut and revenue that goes into the third-party affiliation for your presence on such food delivery apps and websites here.
Strategy and Implementation: Mention the phases of your execution strategy so that you can regroup and check if your team is going as per plan. This also shows the management and investors how detailed you are in charting your progress. If you haven’t started off yet, it would be wise to have a set of goals to achieve in every phase.
Organization and Management Team: Mention the names of your management team, partners and employees in this section. This makes up the core team from all departments.
Financial plan and projections: Lastly, note down realistic projections for the next few quarters in terms of growth and revenue. Make a contingency plan as per the ongoing pandemic and keep things optimistic yet reserved.

Wrapping Up:

It may take you a while to complete the business plan, but doing it well the first time is necessary for the long-term success of your business. We hope that you have enough ideas to form your own from our structure; Good luck!

8 Things entrepreneurial people do differently

There are aspects of the entrepreneurial mindset that will enrich your work and life. Here are 8 things entrepreneurial people do differently.

Entrepreneurship goes beyond Elon Musk, Mark Zuckerberg, and Garrett Camp, and it embodies something bigger than Twitter and WhatsApp. Entrepreneurship is a mindset, an attitude, and a lifestyle adopted by people who aren’t satisfied with the status quo.

It’s an approach to life that favors creativity over conformity and action over inaction. Bestselling author, investor, and entrepreneur James Altucher says that for him, “Being an ‘entrepreneur’ doesn’t mean starting the next Facebook. Or even starting any business at all. It means finding the challenges you have in your life, and determining creative ways to overcome those challenges.”

So, even if you’re not tinkering away at the next world-changing invention or looking to set up shop in Silicon Valley, there are aspects of the entrepreneurial mindset that will enrich your work and life. Here are 8 things entrepreneurial people do differently.

They’re brave enough to commit to their dreams.

Entrepreneurs choose to forego the security and familiarity of a ‘regular job’ to live an uncertain and insecure lifestyle. It takes a lot of bravery to make that tradeoff, but for icons like Walt Disney, the potential reward is worth it.

They think of their customers more than themselves.

Entrepreneurs are rarely out to seek fame for themselves. Instead, they’re more concerned with the people they want to help or the problem they want to solve. This infuses their task with a layer of meaning that can be the difference between success and failure when things get tough. In his book, APE – Author, Publisher, Entrepreneur, former Apple chief evangelist Guy Kawasaki writes, “In your darkest, most frustrated hours, remember the value you are trying to add to peoples’ lives, the satisfaction you’ll feel, or the cause that you’ll further.”

They never stop learning.

Since they’re in the business of creating new products and inventing new ways of doing things, much of what entrepreneurs do can’t be taught in a classroom. They know that the most important lessons are learned through living, so throughout their lives, they remain open, flexible, and curious in order to absorb as much as possible.

Richard Branson, founder of Virgin Group, started off with a small student magazine, before eventually growing a string of record stores, a music label, an airline, and now even a commercial spaceflight company. Rather than becoming an expert in one area, he continued to learn and adapt throughout his life.

They never give up.

Rarely does an inventor or entrepreneur succeed on the first try. To create something lasting and worthwhile, it usually takes years of hard work, focus, and dedication; an idea is just a starting point. Kelly Zen-Yie Tsai, a spoken word poet and the founder of a production company, believes this level of persistence is a critical element of entrepreneurship. “That’s what it means to be an entrepreneur: to really focus on that one thing that does not exist yet and keep working towards it until it becomes real,” she says.

They love failing.

For most of us, the fear of failure is entirely paralyzing, but for entrepreneurs, failure is something to embrace. It’s an indication of pushing the limits, and inevitable when one is constantly trying new things.

They find and fill a need of the world.

Entrepreneurs want to do more than indulge their own interests — they want to solve a problem or create a product that satisfies a need.

Some started businesses because of frustration with an inefficient or defective system. Others were moved by a personal encounter with poverty or misfortune. Blake Mycoskie, the founder of TOMS, started his business after traveling to Argentina and seeing kids who didn’t have shoes: “An absence that didn’t just complicate every aspect of their lives — including essentials like attending school and getting water from the local well — but also exposed them to a wide range of diseases,” he writes in Start Something That Matters.

They take old ideas and make them way, way better.

While one might think that entrepreneurs are focused mainly on never-seen-before ideas, they often revamp an existing model or upgrade an outdated product. Sometimes, these reinvented ideas change the way we exercise, read, or eat.

And once in a while, they revolutionize ice cream.

Ben Cohen and Jerry Greenfield, the co-founders of Ben & Jerry’s ice cream, started out in a renovated gas station in Burlington, Vermont, before growing a globally recognized brand that features unusual flavors like ‘Cherry Garcia’ and ‘Hazed & Confused.’ They’re also pioneers in the socially responsible business movement, speaking often about how business can give back to the community and earning Ben & Jerry’s a B-Corporation certification.

Above all, they act.

Entrepreneurs execute when for many others, an idea simply fades into the past. They are masters of turning the abstract into the concrete. This seemingly simple action is one of the great challenges of life and in the end, it’s what defines an entrepreneur.

Five critical questions your business plan should answer

Ask not what you can do for your business plan. Ask instead what your business plan can do for you.

Questions about pricing, hiring and other factors can put you in trouble. A detailed and revised business plan should help you answer these questions. Getting these answers will not only help your company to achieve short-term milestones but will also help you to keep an eye on your long-term business goals.

Here are five key questions and how your business plan should help you answer them:

1. Is my price right?

There are two essential components of pricing that should be included in your business plan:

i. Consider whether your price is in line with your marketing message. If you are offering a high quality product or service, you cannot charge a low price without contradicting your own marketing message. You should set your prices according to the relative value of your offer, or risk confusing your potential market.

ii. Your business plan should include revenues and costs on a per-unit basis, your overall direct costs and overhead. These factors can help you establish the constraints related to making enough profit. You have to cover costs, which can include expenses beyond the direct costs of buying what you sell, such as rent and payroll.

2. Can I afford to hire?

Especially when you are running a new company, you think to hire additional employees as they might help you with the mounting list of tasks that have to get done.
But wait, What would happen if you had hired an extra salesperson? Could an extra administrator solve some of your problems?

Go back to your business plan and determine what happens to projections if you add the extra salary and benefits. Check whether the improvement in people power will add to your revenue, or cut costs.
Instead, you should consider hiring a contract worker. Of course, hiring someone is almost always cheaper but only if there is a long-term need that justifies adding the fixed costs. If it is a short-term need then the cost won’t affect your overheard forever.

3. Am I implementing my strategy?

Test your strategic alignment: Do your milestones, spending for marketing activities, product or service development, and related expenses show the same priorities that are reflected in your strategy?

Generally, business owners say one thing in their strategy but do something different thing in their actions and spending.

For example, assume that you think to emphasize your extensive computer expertise in your strategy. But, you pay your service staff below market rates.

4. Can I afford to relocate?

Sometimes new business owners need to relocate to help cut costs or to take better advantage of a prime sales area. If you need to switch your location, consider prospects like Bevmax NYC office space rentals if they are applicable to your business. Then, get back to your basic numbers and break the problem into its business plan parts.

Estimate how much more your monthly rent will be at the new location. Also estimate your moving costs, costs for fixing up the new location, if applicable, and costs of the business lost while you are absorbed in the move.

Then adjust your sales forecast to either add in the additional business you would be able to do there or the costs you would be able to cut. If you don’t see enough long-term improvement, then perhaps you should not relocate.

5. Am I stunting my own growth?

Go back to your business plan and give your assumptions a fresh look. Consider your target market and strategy, and add in your business offering and distinctive differences.

Does your business offering match your market? Are you sending the right messages to the right kinds of people?
Think about things could easily add on to sell more per customer. Is there are any low-hanging fruit that you are missing?

Now look at marketing. Is your message changing enough to match changes in the market? Is your marketing mix adjusted to technology, media and social changes? What if you spent more money and time on marketing, could you increase sales?

Your business plan is not a static document, it’s your best tool for steering your business. Answering these questions periodically can help you to keep long-term goals in mind while you adjust your immediate steps and actions.

How to write a business plan for your new startup

Here are the four basic steps you need to take to write a comprehensive and useful business plan.

If you’ve recently decided to start your own small business, there are many details you’ll have to figure out before you can get your company off the ground. Before that, though, it’s important to first have a business plan in place to act as a framework for building and expanding your business. Here are the four basic steps you need to take to write a comprehensive and useful business plan.

Decide What You’re Offering and for How Much

The most fundamental aspect of any business plan is what product or service you’ll be offering and how much you intend to charge for it. While this may seem like an extremely simple point, it’s important to plan in advance. Knowing what you’re going to do to add value to your customers and how much you should be compensated for that value will help you make production, marketing and growth decisions later on.

Figure Out How You’ll Get Customers

As any successful entrepreneur can tell you, a product or service is worthless if you don’t have customers to pay you for it. As a result, it’s critical that your business plan include at least a basic marketing framework. Decide who your ideal customer is and how you can make that person aware of your business, and you’ll be much better positioned to hit the ground running when you start your company.

Include Plans for Medium-term Growth

Although all businesses start out small, it’s important to have at least some path charted for growth. Including plans for hiring, scaling and volume increases in your business plan can help you navigate the growth process more easily and make fewer mistakes along the way. If you need help developing a growth plan, you may want to consult with a business development agency for experienced guidance.

Plan for Success, Prepare for Failure

No matter how good your business model is, there are bound to be some obstacles along the way. One of the best things you can do to prevent your business from failing when these obstacles arise is to try to predict them and write contingencies for them into your business plan. Try to consider possibilities like legal difficulties, slower than expected growth or production problems and decide how you could handle them. By having a plan in place in advance, you can make it much easier to navigate difficult situations when they do arise.

By putting these four items into your business plan, you can successfully prepare for profitability and growth while also ensure you have plans in place for when things go wrong. Once your business plan is complete, you can start putting together the money and equipment you’ll need to get started and begin making money from your new business.

How to help your small business plan for office emergencies

Most people don’t like to think about the possibility of serious emergencies occurring in the workplace.

Most people don’t like to think about the possibility of serious emergencies occurring in the workplace. This can make it easy to put emergency preparedness and prevention on the back burner while you focus on successfully running your company. However, this is something that every business owner should take seriously because avoiding it could potentially lead to the harm of yourself and your employees as well as damage to your property. Some steps you can take include developing effective prevention methods, creating an evacuation strategy, and creating an emergency kit.

Developing Prevention Methods

It is important that you take preventative measures within your business in order to keep emergencies from happening in the first place. This can potentially make a huge difference and will help to protect your employees as well as your work space. Some effective preventative measures you may want to consider include regular maintenance of fire sprinklers, smoke alarms, carbon monoxide detectors, fire extinguishers, and security systems. You should also ensure that the building you work in is up to code and safe. You might want to have it regularly inspected by an electrician, plumber, or building inspector. Also, you should ensure that all repairs are made in a timely manner.

Creating an Evacuation Strategy

In case of an emergency, you will want to ensure that you have an evacuation strategy already in place. You can achieve this by creating primary and secondary escape routes, ensuring that all employees know where the exits are and that they are easily accessible, and designating a place to meet up once everyone has exited the building so that you can account for each individual. It can also be helpful to have emergency contacts for each employee in case they are needed.

Creating an Emergency Kit

If an emergency does occur, it will be incredibly beneficial to have an emergency kit readily available. Some items you might want to consider adding to your kit include a cell phone, first-aid kits, flash lights, non-perishable food items, water, radios, can openers, and batteries. It is important that you keep your kit in a place where it can be easily accessed during an emergency.

Overall, an ounce of prevention is worth a pound of cure. If you ensure that you take the proper steps towards preventing an emergency, this can drastically decrease the chances of one occurring. However, if an emergency does occur, being properly prepared can help you to protect yourself, your employees, and the space in which you work. You also might want to consider backing up all of your important business data using flash drives or a cloud service so that you can prevent losing files, which could negatively impact your ability to conduct business once the emergency has been stabilized.

7 Expert tips for finding safe sources for business investment

If your business is already started, but you need investment money to take it to the next level, you also have a challenge.

Getting a business going is the dream of every entrepreneur. Unfortunately for some, finding safe sources of money can be the one thing keeping them from pursuing their dreams. Safe sources of funding not only help startups get going, but they can help them get over the five-year hump that takes out many small businesses.

If your business is already started, but you need investment money to take it to the next level, you also have a challenge. You might have to take on debt or give up a share of your business. When looking for money for a pre-existing business, the investors will take several factors into account, including the age and performance of the business. They will also want to know what your market is and the opportunities for growth.

These seven tips will help you find safe sources for business investments. It is best to find the perfect fit for your business and financial needs.

1. Review and revise your business plan

While writing a business plan isn’t a guarantee that your business will be successful, it does show potential investors that you actually have a plan. Before you turn to potential investors to ask for money, take a close look at your business plan to see if it is viable. Look closely at your startup plans and how you plan to keep the business going for the first five years.

Then, make changes that will entice an investor. Conduct research about your market and clearly show how you plan to take your small business and make it scale. Create a budget and show how you plan to function within its confines. Investors want to see how you plan to spend money to make money. Investors don’t want to give away capital, they want to make money off of it.

2. Use an online financial source

Some companies focus on investing in businesses. You can find more information at equifyfinancial.com. Investment websites like this are dedicated to helping businesses get the equipment they need so they can take their businesses to the next level. Equify Financial looks for reasons to invest in a business, while others look for reasons not to invest in a business.

3. Consider crowdfunding

If you have a product that will get the attention of the general public, you might consider crowdfunding. Of course, to get money from the crowd, you have to offer something to the crowd. If you entice the general public with rewards that they cannot resist, they will invest in your idea. As long as you eventually bring the product to the marketplace, this is a safe form of financing that has proven to help businesses find success.

Crowdfunding will quickly tell you if your idea will succeed. Crowdfunding websites can be geared toward investors or the general public. If neither group shows interest in your idea, then your idea probably won’t make money in the long run. Or, it might need a subtle tweak to make it an idea that people will consider supporting.

4. Find a strategic partner

Sometimes you just need a partner. When you work with a partner, you not only get a second brain to bounce ideas off of, but you also get a second wallet. With a strategic partner, you also reduce your personal liability, because both of you are on the hook for the business.

The problem with a strategic partner is that you do have to split everything, unless you decide to use a different partnership.

As the mergers and acquisitions experts mention here neumannassociates.com/white-plains-ny, if you do decide to find a partner, be sure you set everything up with a lawyer so that you can work through issues before they arise.

Often the best strategic partnership is where each partner brings something unique to the table. You might be the person who works with marketing, hiring, and sales. Your partner might be the person who works well with finances and accounting. If you’re both good at the same things, then the partnership might not be needed. Consider each other’s roles before you commit to sharing the business.

5. Turn to your local bank

If you have a relationship with your local bank, you can always go there to ask for an investment. Banks do have to follow protocol, so they might have to offer the investment in the form of a loan. Or, they might want a percentage of your business. Banks are generally safe sources for investments, but you have to play by their rules.

6. Try the SBA

The Small Business Administration provides loans to small businesses that need money to startup or to grow. They usually back loans from commercial banks. They also require the business owner provide a percentage of the capital for the project. To keep their interest rates low and their funds guaranteed, they require that businesses put up assets for security.

SBA loans are usually approved within a week, so they are a good source of quick funding, as long as the requirements are met. If you cannot get a loan through a local bank, look for a local bank that uses SBA money.

The SBA does have strict rules for repayment and default. In many cases, if you default on an SBA loan, you might need to try to restructure the loan. Otherwise, the federal government will put your business and you into collections.

7. Use your money

Another safe source for business investments is your own money. If your business has made profits, you should be able to reinvest the money into the business. If you are starting a new business, most lenders and investors will ask that you put some of your own money into the project. This shows investors that you believe in your idea and are willing to take some risk to get it going. If you are unwilling to take a risk with your own money, why should a complete stranger give you money?

Some people prefer to use a personal credit card as a safe source for business investment. Consider the interest rate before you use a credit card. If you do use a credit card, set up a payment plan so you do not accrue an excessive amount of interest.

Check all the vital tips to launch your startup

If you are going to start a new business, then there are lots of things that you should always keep in mind.

If you are going to start a new business, then there are lots of things that you should always keep in mind. Starting a new business is not a piece of cake, so it is important to pay equal attention to several factors. You should decide your business goals, and then you can achieve them with the help of making a good plan. You should take every step very carefully before going to establish a new business. It is really important to manage finance and many other aspects related to business.

With the help of paying proper attention to your plans, you can get success in establishing a business. Starting a new business is all about the right planning because many uneducated people are also running their businesses smoothly. First of all, you should decide whether you want to establish a small or large scale business. After this, you can take your next steps accordingly and get the desired success. Many people are still confused about how to start a new business. If you are also one of them, then you should follow some important tips that have been shared by experts.

To start a new business, you need to manage a lot of tasks at the same time. You need to make a good plan, and it is also important to follow it properly. There are many other things that you should do like evaluating the business idea, choosing the name of the company, etc. most of the people want to build an online presence of their brands and businesses. In this situation, it is also essential to design a quality website that will guide the customers for 24×7 and help them to know more about your business.

Prepare yourself

To make your business dreams a reality, you should make a lot of efforts. Well, it is not as simple as you think so you should pay proper attention to it. First of all, all you need to do is to complete the basic work and try to prepare yourself to move forward. While preparing yourself to start a business, you should analyze your business idea, and you can also consider the business idea of your competitors to get an idea. You should also check the type of products and services that are more in demand these days. After doing this, you can take your next steps with ease for your startup.

Try to understand your customers

Before going to start a new business, you should know about your customers. With the help of considering the needs and requirements of your customers, you can provide them better services. It will also make a good impact on sales as well as the profitability of your business. All you need to do is to build stronger relationships with your customers. By doing this, you can attract them to come back. When it comes to an understanding of your customers, you should analyze their needs and do the market research properly.

Make a business plan

With the help of knowing the needs of customers and getting some more information, the next thing you should do is to create a business plan. Many people are taking it lightly, which is not good. Everyone should pay proper attention while building a business plan. They should make the right use of time and other resources to create the best business plan. With the help of an effective plan, you can make complete the other steps with ease. With the help of a good plan, you can easily get success in achieving your objectives.

Business structure

After making a business plan, you should follow it and take the other steps very carefully. Before starting a business, it is essential to choose the right business structure. Well, there are mainly four business structures present to choose from, such as sole trader, partnership, trust, and a company. You should understand the various types of business structures, and then you can choose the right one for your business; you should make your choices wisely after doing the proper research about these various options.

Register the business name

The name of the business always plays an important role, so you should always choose it wisely to run your business smoothly. With the help of choosing the best name for your business, you can easily introduce it in front of your customers and the people from all around the world. After the selection of the right business name, the next step you should take it is to register it. If you are a sole trader or have a partnership firm, then it is up to you that you want to register your company name or not.

Registration and license

With the help of getting certificates and license regarding your business, you can achieve your goals much faster. Most of the people prefer to hire licensed and registered companies to avail quality services. There are various types of permits as well as certificates that you should get according to the type of business that you want to operate. With the help of getting registered or licensed, you can improve your chances of getting success in the future.

Business finance

After completing all the steps before starting your new business, one more thing you should do is to manage the finance. You should check out the various finance options available for you, and then you can pick the best one to get started. Most of the people always face various finance issues while starting a new business. To get rid of all these finance issues, you should visit libertylending.com or other similar websites. With the help of managing your business finance, you can operate your business smoothly.

Wrap it up

It is not easy to run a business in the competitive market, but you can make it possible with the help of right planning and other efforts. You should always follow the important tips carefully to achieve your business goals.

5 Important questions to ask yourself before pursuing any business idea

Starting a new business is exciting, but it is also extremely crucial for you to do your research thoroughly before embarking on such a journey.

Starting a new business is exciting, but it is also extremely crucial for you to do your research thoroughly before embarking on such a journey. It is sure to be a tough road and here is how you can prepare yourself mentally for the challenges that are bound to come your way. You need to know your customers, your product/service, and also do your market research before you make the final decision.

So, here is a list of questions that you need to ask yourself, before going ahead with your business plan:

1. Who are your customer

For example, if you are starting a Smartwatch startup, then you should define what age segment it will address to. Ideally, you would be catering to a younger demographic, so you simply cannot assume that people across all age groups would be interested. You need to be specific about your customers.

If you are starting a media company, then specify whether it would cater specifically to men, women or would it be a conventional media company, or even a news portal.

Similarly, if you are developing a CRM (customer relationship management) app, then ask yourself whether you would be targeting big established chains or the main street dealers. For a business to be successful, you should know all about its potential customers, because, in the end, it is them who you are catering to.

Related Post: 10 Step guide to launch your own startup

2. What exactly does your customer need?

This is one of the most important questions you need to answer before embarking on the journey of starting a business.

In most cases, this question is what gives you an idea about your startup. You need to know what exactly is your customer’s problem that your service or product would solve. You need to identify if it is a need or a want.

For instance, let’s take an example of Elon Musk’s startup journey. He started an online payment company X.com, which later became Paypal and made the process of transacting money hassle-free. He now heads The Boring Company, which is focusing on making travel easier for the public. He identified a problem and started creating solutions.

3. Are your customers already addressing that need? If yes, then how so?

It is basic common sense to ask yourself this question in order to provide your customers with a better solution. You cannot simply assume that your customers are not addressing this need today. They might be doing it, even though with a less efficient method. Before we had subscription services like Netflix, people used to, and a majority of people still have a cable connection or a dish service.

So, assume that a solution is already there and people are using it. You simply need to know if you can make it better.

4. What is your product/service?

This one is a bit tricky as it needs simplification. As Albert Einstein said, “If you can’t explain it to a six-year-old, you don’t understand it yourself.” Well, you might not need to explain your plan to a six-year-old in this case, but certainly to adults who have no idea of your domain.

Many a time, people have no idea of what it is that you are providing. Is it a service, a product or a combination of both? Run your product description by people you know and get their feedback. How will people buy your product if they do not know that they need it?

5. How will your customers benefit from this product/service?

This is a crucial question that an entrepreneur or a business person often comes across. There are chances that you get swept away by the sheer brilliance of your product idea, that you don’t stop to think if people need it or not. If your customers won’t benefit from it, then maybe you need to rethink your business plan.

Asking yourself tough questions like this will help you build a stronger business plan with more chances of success.

All you ever wanted to know about a business plan

A business plan is necessary even for a small organisation.

According to Wikipedia, a business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.

Business plans may target changes in perception and branding by the customer, client, taxpayer, or larger community. When the existing business is to assume a major change or when planning a new venture, a 3 to 5 year business plan is required, since investors will look for their investment return in that timeframe.

A business plan is necessary even for a small organisation for the following reasons:

• Internal Purposes:

– A structured plan for your business which entails each person’s roles.
– Specified short-term and long-term targets
– It can also serve as a method of evaluation as the entrepreneur can strike off stuff that’s accomplished.
– Helps with the planning process
– Can be edited as the company grows

• External purposes

– To present to banks and other investors for investments
– A document for the statutory agencies
– Helps in attracting business partners
– Attracts key employees

A comprehensive and detailed business plan should consist of the following parts:

• Executive Summary:

The executive summary is not a preface or an abstract but it is a concise version of the business plan itself. It should explain the contents in brief so that the viewers are aware of what’s coming up.

• The Company:

The next part should speak about the company itself. A good business plan should contain your big idea and how it is going to benefit people. Also, any specifications or developments of the product/service should be mentioned in this part.

This part should also speak about the background, current status and the estimated future concisely.

• The management team:

It is essential for the investors or proposed alliances to know about your team. Include the qualifications and the skills possessed by the head and some experienced employees in the team. Including the financial status and the knowledge about the market in this part is also a good idea.

• The industry & the markets:

This part is self explanatory.

For instance, if you are venturing into the pet market, write about the pet industry and why it is booming. Try and incorporate the psychographics of the market you would be catering to along with the major competitors in the same market.

• Operations

This part of your business plan should comprise of a chart of milestones and dates and also cover inputs required for the business to run. Also, it must take into consideration cash-flow & people related plan.

• The marketing & sales plan

This segment should cover the target market you are aspiring to approach along with the pricing strategies and coverage plan of how you’ll reach them using different marketing tools– social media, personal selling, ATL ads etc.

Include the periodic sales and the collection methods as well.

• Financial plan

This is the most important part of your business plan. It should comprise of the point you will most probably reach a breakeven point (total revenue=total costs incurred). It should have properly structured and supported data about the investments made till now and how much more you’re expecting and how you’d use those financés.

• Risk & Contingencies

This fraction of the plan shows your deep thinking and research done by you and should encompass the financial and other risks one is undertaking.

Related Post: 8 Common business plan mistakes

• Appendices

This is an optional segment but it’s better if you have an appendices. It can consist of CVs of important people, Gantt charts, references, projected profits and losses, cash flow, the balance sheets and important documents such as land acquisition, raw materials etc.

You can find sample business plans here:

http://www.bplans.com/sample_business_plans.php
https://www.liveplan.com/features/samples_and_examples
http://www.smetoolkit.org/smetoolkit/en/content/en/236/Sample-Business-Plans

Startup Success: Pitch Your Business Idea Like a Pro

Everyone has ideas; it is the implementation which makes the difference. So when working upon making an idea a reality apart from working on the basic business plan, you need to pitch your idea to an investor.

We all have ideas. But how many of us actually do something with our ideas. So how do you end up making an idea a reality?

Not all of us our blessed with cash rich heritage and are dependent on external investments to get funds into our startups. What may look good on paper needs to be reflected in a summary form so that the investor gets the idea immediately instead of having to look into a cumbersome booklet, which states every morose detail.

There is no point having an elaborate slide or presentation unless you actually have something which is concrete and tangible. No investor wants to invest in an idea which has no base. You cannot simply talk about your business and why you need the money alone, you need to pitch in your idea, which showcases the actual concept which people will get.

If you cannot make the investor understand, then the investor will think the concept shall also be lost on the mass. You need to show your business viability. Why would anyone invest their money if the business which is not viable?

Have a prototype and a test launch of your product. This helps the investor understand the actual reality of your idea. Remember one thing, when you are going to investors, you are going to people who know their business.

So never beat around the bush and waste the investor’s time. Get to the point and be reasonable and sensible. If Rome was not built in a day, then remember neither will be your business.

How to write a Business Plan: A step-by-step template

Writing a business plan doesn’t have to be an intimidating task, but it does require foresight, honesty, and plenty of research. Here is an outline and some smart tips to help get you started.

Creating a business plan is the first and most crucial step to building a successful company.

A business plan is important because it communicates to everyone involved in the organization what the goals are, and how management plans to get there.

The parts that make up a business plan are straightforward. Here’s a step-by-step breakdown to get you started with your business plan, along with a few expert tips on how to attract investors.

1. Describe your startup

The first step is to simply describe the business you want to build. During the process, it’s important to be honest about the obstacles you’re likely to face.

Starbird suggests including a breakdown of the target market and customers. You should also be clear about the factors offering a competitive edge.

Be careful not to have any blinders on when it comes to your product or service. People spend a lot of time focusing on the features that make them unique without taking the time to translate that into a value proposition.

Do diligent research on what your market is, and how to communicate with customers accordingly. The most successful investors are looking for an idea that is going to have a clear and understandable market potential.

2. Have a thorough plan: Document all aspects of your company

As the founder, you need to be concerned about all parts of the plan. That means including any licensing agreements, or your location strategy, for example.

It’s especially important to know and understand your numbers. The number one reason firms go under is inadequate cash flow. If you don’t know what’s going on in that area, you’re going to be in big trouble.

3. Make sure the plan is modifiable for different audiences

Different sections of your business plan will be more important depending on your audience. Investors, for instance, will want to see your financial projections, whereas employees might be more concerned with the organizational structure of your company.

The SBA recommends that you project that status of your company for between three and five years into the future, though it’s a good idea to outline your annual goals, too. Keep in mind that the further ahead you look, the less accurate your conclusions are going to be.

A five-year horizon is fine, but a thorough business plan looks beyond that [up to 10 years], with the recognition that some of the forecasts would be of decreasing accuracy.

4. Include details to put you over the edge

When writing the market analysis, it’s a good idea to include any information about external growth trends, and why one company might have the market share. Pricing power – meaning how consumer demand would be affected if your company shifted its prices – is one detail that often gets excluded from business plans, but which can help put you over the edge.

It’s also important to keep your expectations realistic and honest: The biggest mistake entrepreneurs can make when writing a business plan is to be overly optimistic with sales and future cost estimates.

5. Remember why you care

Your business plan should reflect not only your financial goals, but also your values, and those of the community you’re working to build.

Key checklist that Askme considers before investing in any startup

Piyush Pankaj, VP Corporate Finance and M&A at Askme Group, speaks about what are the key checklist that the company considers before investing in a company.

Askme, majorly owned by Malaysia’s Astro Holdings, invested a whooping $20 million in Indian online market place Mebelkart last year, in turn for a stake in the company. The company also acquired online grocery marketplace BestAtLowest.com for $10 million in 2015.

The key factors checked before a partnership or funding

Piyush said that the two main criteria that the group seeks are the synergy opportunities the startup has with the Askme Group and entrepreneurial skills of the team or the founder. Once these two main requisites are checked, then the Askme looks for other qualities like market opportunity and others.

When a startup begins operations, they have very limited resources. So the first thing we do is to keep the resources so that they can rapidly grow. We focus on how the company can further grow using the Askme ecosystem and how Askme’s gross users can generate revenue for the startup.

One of the challenges that we face is to integrate Askme’s philosophy and culture in the startup and at the same time create an environment where the startup continues to develop and innovate fresh ideas with complete freedom.

When a founder approaches us they should keep in mind whether they will be able to create any synergies with the Askme Group. We have the ability to incubate in our area — the online ecommerce, hyperlocal and penetration into the SMEs and bigger markets. So whoever comes with their idea, they should keep in mind if the idea matches our ecosystem and of possible synergies. The founders should have a clear idea as to how they can help grow our business or how they themselves could grow their startup using our platform.

What made Askme to invest in Mebelkart?

The idea of Mebelkart really appealed to us, as the concept of online furniture business has a lot of growth opportunities in India. The online business mostly caters to the metro cities. What Askme can provide to them is penetration into tier 2 and 3 cities.

Our main idea was to help Mebelkart rapidly grow using the Askme ecosystem. We also looked at the promoters, who come from a good IIT background, and have successfully created a sound technology platform which is very scalable. We have also seen a great amount of hunger in their team for success which made this decision come easy.

When Mebelkart approached us they had done their research on how we can help them and what are the opportunities that we could provide.

Ecommerce space can benefit from Chinese investments

The whole ecommerce industry is still at a nascent stage and penetration into the smaller cities is not up to the mark. The ecommerce industry still requires a lot of investment to help it penetrate into smaller cities. So with the Chinese investments coming and the new FDI norms, it is going to help the ecommerce industry, especially the startups.

Currently the whole ecommerce space is led by mobile and apparel categories, all other categories continue to remain at a very nascent stage. So wherever there are more hyperlocal businesses coming to the play, those startups are going to get benefitted because the market is moving towards these new distribution models. Right now in the grocery domain, a lot of categories can penetrate into the hyperlocal model. The closer one gets to the consumer the better it is.

Lower funding in 2016 should improve quality

Money is drying up because everyone today is looking for profitability. On an industry basis, I think it’s good for the overall space as people will now stop giving several of those discounts, which the government also has tried to control via FDI rules. This will make a semblance for every player as it will make it a levelled play for everyone rather than giving the upper hand to those who were funded previously. It will help clear off the euphoria and let real businesses to emerge. People will focus on quality rather than quantity.

This article was originally published in Entrepreneur.com

10 Great ways to generate business ideas

You know it’s time to venture out on your own, but what to do? Find the business of your dreams with these ideas.

Great business ideas are all around you. Just open yourself to the possibilities, and you’re bound to find a winner. To start your search for that drop-dead idea that’s going to set the world on fire, start with the following sources. These can be the first steps in your search for the business of your dreams.

1. Start with family

Tapping family for great business ideas may not seem like an obvious first step. Sure, you’ll hit them up for cash once you’ve developed your idea, but what can your aging father or cousin contribute this early in the process? Plenty. Donald Trump certainly wasn’t bashful about learning the real estate business from his dad, Fred, who ran a thriving real estate development company, says Ries. Trump had the good sense to get some priceless training before going off to become one of the country’s foremost builders and real estate developers. “If his father hadn’t provided the foundation and training [he needed] to create a profitable business, Trump wouldn’t be where he is today,” Ries explains. “Unfortunately, many people insist on [creating a business] themselves without any help from their family. That’s foolish.”

2. Get a little help from your friends

Ries says you are severely limiting yourself if you rely solely on your own ideas–especially when your creative juices run dry. This is reason enough to listen to ideas others may have. If you have 15 or 20 friends, chances are a couple of them have some incredible business ideas.

If it weren’t for Steve Jobs’ good friend Steve Wozniak, there would be no Apple Computer today, Ries points out. “Jobs didn’t know anything about computers,” he says. “Wozniak, on the other hand, was the computer genius who developed the first Apple.” Jobs had an eye for great business ideas and saw the marketing potential for developing a new type of computer. The important lesson is to keep your antenna up at all times so you can retrieve good ideas when you stumble across them. Ries insists you can make more money recognizing someone else’s idea than creating one yourself.

3. Look at all the things that bug you

It may not sound profound, but this is fertile ground for great business ideas. How upset Kemmons Wilson was in the 1950s when a motel owner wanted to charge him an additional price for each of his five children. He was so ticked off, he launched Memphis, Tennessee-based Holiday Inn, today one of the world’s largest hotel chains.

If King C. Gillette hadn’t been fed up with the tedious process of sharpening his straight-edge razor, he wouldn’t have founded the massive disposable razor industry. When he took his idea for a portable razor with a blade that could be used several times to a research university for assistance, engineers questioned his sanity. Gillette followed his instincts and the rest is history.

4. Tap your interests

Thousands of clever people have taken up hobbies and turned them into a successful business. Tim and Nina Zagat, who launched the Zagat Surveys, a publishing empire that sells restaurant guides for many major U.S. and European cities, are great examples. In the early 1970s, the Zagats were high-priced corporate attorneys whose passion was dining out. For fun, they created a newsletter in which they asked their friends to rank popular restaurants in several categories. Each year, the newsletter encompassed more restaurants. Eventually it became such an expensive and time-consuming undertaking that the couple began charging money for it to allay their expenses. That was the meager beginning of the famed Zagat Survey, which is sold in bookstores worldwide.

When you’re doing something you love, it’s never considered work.

5. Travel

Traveling opens your eyes to a plethora of potential business ideas. Leopoldo Fernandez Pujals’ discovery of Domino’s Pizza on a trip to the United States from his native Spain. Pujals was so impressed with the fast-food operation, he went back to Spain and launched his own version, called TelePizza, in 1986. His company now registers $260 million in sales, and employs 13,000 people in eight countries.

6. Keep your eyes open

When you see something that piques your interest, ask yourself, What is it about this situation that’s special? The process of zeroing in on the idea often spawns important niche markets. “Blockbuster Video’s niche is renting videos, and Bulbs Unlimited’s niche is selling light bulbs”.

7. Examine old mousetraps-then build a better one

If a product doesn’t meet your own high standards, create a better one. That’s what put Ben & Jerry’s on the map. Ice cream fanatics Ben Cohen and Jerry Greenfield felt popular ice creams weren’t rich and tasty enough for their cultivated palates, so they created their own super-premium line of ice cream, which is a bestseller nationwide. Just think: If these ice cream gurus weren’t such picky eaters, there would be no Cherry Garcia, Chubby Hubby or Phish Food to enjoy.

8. Take it to the streets

There’s no better place to lock into up-and-coming trends than city streets. Street culture spawned punk, hip-hop, grunge and a number of other fads that rapidly evolved into multimillion-dollar businesses. Great ideas can often be found by just browsing happening inner-city neighborhoods in virtually any big city.

9. Sleep on it

Many people ignore their dreams, and some don’t remember them at all. But sometimes it pays to listen to those inner messages, no matter how strange or unintelligible they are. You never know, you might just find the germ of a great idea. The tough part is crawling out of bed in the dead of night to jot down those great ideas before they’re forgotten.

10. Check out the Net

Finally, Web surfing is a fun way to log on to potential business ideas. “Virtually every search engine has a ‘What’s New’ or ‘What’s Hot’ section, where it lists new trends, news tidbits and hot new Web sites. “Make it a point to check out various sites daily. It may trigger an idea or concept you never thought of.”

This article was originally published in Entrepreneur.com

Image credit: under30ceo.com

Five keys that every investor looks for in a start-up

Here are a handful of the things that most investors look for in promising startups. Which do you find most valuable, and which do you believe are irrelevant?

As an entrepreneur who’s looking to attract funding, it’s imperative that you understand what investors are looking for in start-ups. By getting a clear idea of what investors want to see, you can better frame your pitches, and guide your conversations to encourage positive outcomes.

The Importance of a Formula

Ask any investor what they look for in start-ups with high growth potential, and they’ll begin to rattle off a list of trademarks that they search for and red flags that they avoid. While they may not refer to their process as a formula, that’s essentially what it is. If you want to be a successful start-up investor, you must follow a formula. That’s the only way to keep your emotions in check, and make sound decisions that are likely to deliver high returns.

There’s no such thing as a perfect formula–and most undergo frequent changes and tweaks–but having a process will help you to identify profitable opportunities that others might miss.

Investing in an unproven business is a lot like betting on a sports team to win. You can study the trends, and look at historical data points, but you’re always taking some kind of a risk. If you want to learn about investing analytics, study sports handicappers.

As an investor, the takeaway is simple: don’t listen to what everyone else tells you. Do your own research, develop your own formula, and put your money where you believe it’ll deliver the highest return. Your investing formula is the only thing that matters.

Five Keys That Investors Look For

With that said, you need to identify important keys, and give appropriate weight to the different factors that you deem valuable. In no particular order, here are a handful of the things that most investors look for in promising start-ups. Which do you find most valuable, and which do you believe are irrelevant?

Strength of the Founding Team

There are certain elements of a start-up that can be fixed and others that are unchangeable. The makeup of the founding team falls under the latter category. You can’t force change upon a startup’s founder. They either have what it takes to be successful, or they don’t. An entrepreneur may have all of the knowledge necessary to launch a venture, but do they have the passion to navigate through difficult seasons? A founding team may be capable of creating colorful presentations and well-worded briefs, but do they really understand what’s happening at a foundational level?

As an investor, one of the first things you need to consider is the founding team. Look at their history, ability to lead, incentive to succeed, and overall versatility. If you don’t feel good about the founding team, you can’t be confident in the future of the business.

Clear and Unsolved Pain Point

The next thing that investors turn their attention to is the pain point. Any time you’re studying a new start-up, ask yourself three questions in regards to the value offering:

Does the product solve a palpable pain point in the marketplace?
Is that pain point widespread and relevant?
Are there currently any other solutions?

If you can answer “yes” to the first two questions and “no” to the last one, then there’s a clear, unsolved pain point. This is promising, but it doesn’t mean that you’ve found a start-up worthy of an investment. You’ll now need to turn your attention to the actual product.

Sales Momentum and Sample Data

Investors want to be sure that a start-up will be successful before investing money in the venture. One of the best ways to do this is by studying past performance. While past performance isn’t always indicative of future success, it’s generally a good indicator.

You can look at any number of metrics to determine success, but analyzing sales momentum in the form of data is the most objective method of studying success. If the start-up has been in business for any amount of time, they should be able to supply you with this data.

Long Term Business Model

A start-up can have the right people, a palpable pain point, and some sales momentum, but you’re investing in its future growth. What happened in the past does very little to deliver a return on your end. That’s why you need to study the start-up’s business model, and consider its feasibility.

Does the business have the right structure? Is the business plan accounting for future competition? What are the three, five, and ten-year goals? If you want to feel confident in the long term growth of the business, you need answers to questions like these.

Fair Valuation

As angel investor Basil Peter points out, “Over-valuation is one of the most common structural problems angel investors encounter.” If you over-value a start-up when you present an investment, you’ll find yourself swimming upstream for years to come. The negative repercussions of over-valuing are hard to overcome.

While a founding team obviously wants to attract as much capital as possible without giving up more equity than they feel comfortable forking over, the reality is that the investor often does the entrepreneur a favor by correcting the valuation. They may not like the fact that they’re getting less capital on the front end, but it’ll save a lot of headaches down the road. With that being said, make sure that you only invest when the valuation is fair for all parties.

This article was originally published in Inc.com

Image Credit: http://www.businessinsider.com

10 Things entrepreneurs must avoid while starting their ventures in India

With the launch of ‘Start Up India, Stand Up India’ initiative this weekend, many would-be entrepreneurs who were earlier waiting in the wings will be more willing to take the entrepreneurial leap and start their own ventures.

But even the most experienced professionals will agree that entrepreneurship is a tricky choice to make. On one hand there are so many things that you have to do to achieve success and growth, while on the other there is an equally lengthy list of things that you absolutely must NOT do at any cost if you want your venture to survive.

So, in a bid to empower the budding entrepreneurs with the knowledge to make the most informed and viable business decisions, here are a few things that you should avoid like a plague if you want your venture to succeed in India.

1. Half-prepared entry

This is one of the most elementary mistakes a first-time entrepreneur can make, and yet it is one of the most easily avoidable ones. Often, while starting their ventures, entrepreneurs can be swayed by their own vision so much that they fail to factor in several key requirements to make their vision a reality.

Do you have enough employees to support your business? A viable revenue model? Do you know who your competitors are in the market? Any future strategies that will help you evolve past the initial stage? All these things need to be addressed before taking the plunge into entrepreneurship.

2. Ignore the value of analytics and research

Another easily avoidable mistake that most entrepreneurs starting their own businesses make is discounting the pivotal role data analytics and market research can make to your business.

Data analytic tools have improved to such a great extent today that they can often identify and predict consumer behavioural patterns and market trends well before they even occur. Leveraging them could give your business a big boost by identifying the strategic opportunities for your venture.

Moreover, a market research can also help you in identifying the target demographic for your product or service, which will make it easier for you to decide on the optimal brand positioning.

3. Modelling your business on short-term trends

Jumping on board a particularly popular bandwagon is a needless pit that entrepreneurs often end up jumping into. Needless to say, most of these startups often fail to survive beyond the initial few years.

In a digital age where people have the attention span of a goldfish, what is popular today may not be popular tomorrow. Therefore, if you are in for the long haul, always devise your products to address market gaps instead of trends.

4. Make more than just another job

Most entrepreneurs start their ventures to ‘work for themselves’ and escape the tedium of their professions. This sort of approach can hamper the growth of a start-up. Entrepreneurs must always look to evolve their businesses beyond just another ‘job’ that they do and continuously work on expanding their business.

5. Focusing too much on the idea and not enough on the team

A great business has a great idea at its core, but at the same time it also has a great team working hard to make that idea a success.While the idea that you come up with might be very good in itself, you also need to hire individuals that can support your venture’s long term vision.

6. Square pegs in round holes

This covers everything from hiring to incorrect business decisions. As a first-time entrepreneur you will require individuals who work as an employee as well as independent freelance contractors for one-off tasks.Both have their own sets of benefits and drawbacks; a contractor getting paid on a pro-rata basis might fail to meet deadlines, while having an employee is a full-time drain on your resources. The difference lies in identifying what to choose as the best-fit for your venture.

Most entrepreneurs also end up taking on multiple responsibilities to cut down operational costs. This practice should be avoided, as it leaves you with no time to build your business. Moreover, follow the tenet of ‘you get what you pay for’. Do not compromise on the quality of your service to save a few pennies.

7. Over emphasis on a certain business function

A successful business is a seamless confluence of several vital functions – sales, administration, marketing, finance and operations.End up concentrating on only one area of your business and you end up neglecting the others. This can be detrimental to a budding start-up.

8. Focusing on short-term gains

Many entrepreneurs often lose sight of the bigger picture in order to secure short-term gains. The effort, instead, should be on building lasting professional relationships with clients in order to ensure repeatable business. Will taking a cut in fees ensure the client will be associated with your venture for the long haul? Do it.

9. Inflexible business model

One of the most frequent mistakes that first-time entrepreneurs make is getting too attached to their idea. It sounded good when you told your colleagues about it and it looked good on the drawing board. However, always create an agile business model that will help your start-up survive the rough and tumble of the real market.

10. Ignoring the importance of contracts and legal framework

Never, ever, ever get into any arrangement without defining the contract. You and your clients mutually decide and agree upon certain terms and conditions when entering into a business deal; a contract is a documented proof of that agreement.

It often becomes your saving grace when the client expectations start to strain your budget more than your initial operational outlay. The benefits of a legal advisory, whether associated full-time with the start-up or on a consultation basis, cannot be stressed enough in these cases. Always ensure that you cover your legal bases in all your business dealings with clients or auxiliary service providers.

Image Credit: www.huffingtonpost.com