Whether you’re starting a small business or launching a new product, writing a business plan is essential. But before you start putting pen to paper, there’s some important research you need to complete. Doing solid research will help you create a better business plan for yourself and also shows potential investors that you are serious about your venture and have done the homework.
Just remember that your business plan will be unique to your business. An event venue business plan is going to contain very different information than a physical therapy business plan. That being said, these research areas are pretty much universal and should be explored regardless of the type of business you want to start.
Below are five key items to research before you start writing your business plan. Getting this research done early will help the business plan writing process go faster and smooth later on, so make sure to dive into each area thoroughly so you have what you need.
5 Areas to Research Before You Write a Business Plan
Before you can start writing your business plan, you need to have a good understanding of the industry you’re entering. Research the key players in your industry, as well as any trends or challenges that may impact your business. This will help you identify opportunities and threats and develop strategies to address them.
Your Target Market
Whom are you trying to sell to? What are the needs of your target market that your product or service can meet? What are their purchasing patterns? Answering these questions will assist you in developing a marketing strategy that will reach out to your target market and encourage them to purchase from you. If you are selling to a variety of different people, you might want to include a few different marketing tactics to reach all of them in your business plan.
Where you choose to locate your business can have a big impact on its success. Consider the demographics of the area, as well as any competition you may face. If you’re opening a brick-and-mortar store, accessibility and foot traffic are also important factors to consider. Remember that there is not always a good market for a particular product or service in an area, and a business cannot survive without enough customers. Even if you plan to start an online business, your location may impact how you can build your team later on.
Researching the existing businesses whom you will compete with is also important. Be sure to identify your main competitors, their position in the market, and both their strengths and weaknesses. Understanding your competition will help you develop strategies to differentiate your business and give you an edge in the market. Knowing what they are doing right and wrong can also help you recreate their successes and avoid their missteps.
What are your start-up costs? How much will it cost to run your business on a monthly basis? What are your projected revenues and profits? Conducting a thorough financial analysis is essential to developing a sound business plan. Knowing your financials will also be important in helping you identify any potential investors and secure the funding you need to get your business off the ground.
Apply What You’ve Learned
Once you’ve done your research, it’s time to start putting together your business plan. The information you’ve gathered will help you outline your business goals, strategies, and tactics. Use what you’ve learned to create a plan that is realistic and achievable and that will help your business succeed.