How detailed was your business planning process?

I had my session with a business consultant and she's sent through her recommendations about my proposed bed linen start up. I'm finding that there is a huge amount of detail required, I'm a little uneasy about it as it seems like a lot of guessing, finding it hard to justify spending so much time just to fill words on a page.

The things she recommends are:

• Full business plan, including thorough market research and a full financial analysis (I have already done one but looks like it needs more)
• Business owner's Job Spec to identify things I suck at and need to outsource
• Put together "mood boards" for the product range, by category
• A full review of each competitor's strengths and weaknesses. I have already done 10 but again, it appears I need more.
• Hold a focus group with 10-12 people
• Develop a full e-commerce strategy
• Develop a "brand identity" and brand values
• Develop a strategic marketing plan
• Develop three target market "personas" (demographics, psychographics and geographics). This includes things like customer's opinions and attitudes, behaviour patterns, where they shop and what they like to do Friday night. And yes, give the personas names to bring them to life...
• Create a perceptual map to represent consumer’s perceptions and understandings on a diagram
• Full costings (start up, budgets, cash flow, expenses, p&l, break even analysis...)
• there's more but I'll stop here.

Is this normal?? I feel like I'm writing a uni assignment. Some of the stuff makes sense, but who actually goes into this much detail, and is it ever useful? And I'll do what I can but much of the financials would be pure guesses, especially for revenue.

I've recently read two books which I thought were great for their departure from the usual script: Rework, and the Millionaire Fastlane. The authors of both basically view detailed business planning as a waste of time and what matters is execution. You have to put your product out into the world and then react accordingly, and in my admittedly limited experience, I tend to agree.

Feeling more than a little overwhelmed. Thoughts?

 

I've never done any of those!

 

Seems way over analysed, but it really depends on the person.
I started an online biz just over a decade ago, never had a plan.
Only until a couple years ago when we started some business coaching, we made some general plans, but nowhere close to your list.
We're probably turning over close to 5m at the moment.

Maybe the business consultant Needs to justify their job?

Business is simple.
You don't need any special education to be good at business.
Source product at good prices.
Market product.
Make good profits.
Keep costs low, especially when starting out.
Optimise efficiency.
Offer exceptional service.
Be aware of the market.
Be creative.
Use common sense.
Be very good at problem solving.
Learn to manage people when required.

I don't think I've ever read a business book in my life.
Just bits and pieces online and learnt from experience.
Some people are just too much theory and not enough action.

 

I have owned three businesses over 30 years and never did that depth of business planning. Be careful of 'paralysis by analysis'.

I am more of a Ready, Fire, Aim sort of person. That is, get your missiles in the air and then work out your targets. Better to do this than have your missiles blown up while they are still in the bunker!!!

Having said that, I do believe in doing a business plan (including SWOT Analysis, setting objectives, KPI's, etc), enacting the plan, monitoring progress, taking corrective action, adjusting the plan, etc. That is, if you don't know where you are going, then any road will get you there!!!

 

Sounds too much like an assignment

 

Love reading the responses to this thread

Looking at the business plan template from the business.gov site is overwhelming as well, I got a much better template from the registered builders forum. Business can be over thought!

We do basic business planning but nothing like the list you have written - I'm pretty sure it is a way of scaring newbs out of business. A basic understanding of where you are going - macro and micro goals to keep you on track and a hefty dose of flexibility to ensure responsiveness and the ability to grab opportunities is my method. Seems to be working well so far....

 

I'm with Keirank - ready fire aim ... only ever once did a business plan, and within 2 months it was obsolete as the business took the path the way it was organically meant to.

I find that if you supply a quality product - with a professional method of selling (website, market stall, shopfront etc) - at a price that is deemed "value for money" (doesn't need to be the cheapest) - excellent customer service - an ability to talk positivey about your product WITHOUT pushing a sale - listen to feedback ...

Then you tweak as you go along ... the most important thing for a start up business, I feel, is to be consistant in your image - have a unique perspective to your product - know you market and market to them - and don't launch your website until it is COMPLETELY ready and we've picked the dummy site to pieces on here!

 

This is what I do:

1: Work out what it will take to make a full time wage from this business idea. Obviously you want to make mega bucks but you have to start somewhere.

2: Look at the product or service you are offering. Work out the margin. Look at how much of the product or service you need to sell in 12 months to make money from it.

3: Is the figure you came up with realistic? Yes - Do it. No - Look for something else.

 

This is my experience too - these things have a way of taking themselves where they're meant to go.

My core values didn't change though, just my idea of what the biz would look like.

I've never done a huge plan like that - I just wrote down what the customer experience would look like, and my mission. The rest takes care of itself, with the ready, fire, aim approach already spoken about.

Listening to the feedback in and from your biz and acting on it is the best way to sharpen everything up and hit more targets, in my experience at least.

 

Your plan is your plan, and everybody's circumstances are different, but you might be missing out on some opportunity there.
When I started my biz I only expected to make a couple hundred bucks a week in supplementary income to my wages.
Instead, started making 5k a week in profits after just a few weeks.
Grown much more now, but if you set goals too high from the start you may miss out on some things.
You never know how things will turn out.

 

You underestimated the potential then because you sell items that are of a high price, with good margins and there is a big market from them. If you started off selling $5 socks do you think you would be where you are today?

 

Yes, did underestimate the potential as it was all new to me.
Wasn't highly confident as I had no track record at the time.
Back then I was selling pool tables, had no idea of the market or industry at the time, just wanted to make some cash.
That market crashed about 6 months later, but made some good money and had moved on to different product by then.
Selling low priced items would be tough, considering all the transaction costs involved.

 

In a nutshell that is it. There is always the exception of course but being based in Australia there just isn't enough people to make it with a low priced sale generally. You could always make it with something new and low priced that catches on but that would essentially be taking a punt as it's very hard to do any market research when no market exists yet.

Good example - I know someone who knew the guy who imported those warhead lollies in the 90's, remember those? They were hot sour etc. They were retailing for $2 each when they first came out. The guy was buying them for a few cents each wholesale... Killed it for a few years then it died it. Like that it can work because it is new and something no one had seen before but you are essentially taking a punt as I said.

 

I've always thought about traveling around Europe/the US seeing whats big over there, then pushing it into the Australian market. Think Bounce, inflatable world etc (even hover boards). Probably something I will do one day.

 

Even if it's not a "product" ... I have a friend (who is French), who operates a website in France, that brings together listings of all environmentally friendly products, suppliers, installers for use in building residential houses under one website ... windows, floors, heating, solar, insulation, doors, lights, you name it in one place ... bit like realestate.com is for the house selling market or booking.com for holiday accommodation.

Managing the website is all he does, and brings him a nice bit of coin for clicks

 

Sounds to me as if she has an MBA - and is doing business coaching direct from the text book.

I like having a business plan, especially when entering into partnerships/JV's. It forms a good platform describing where you are going. However...

If it is a start up having this much detail may actually be counter productive as you won't let the business grow organically to where it is meant to go. Certainly one you get to a point where it stops growing and you need to make some decisions.

If you are doing budget planning for a start up, when you are finished with what you think is reasonable, go back and double the expenses and halve the income especially in the first 12months. It will be far more accurate.

I think if you did all this - you would be committing valuable hours 'designing' your business which doesn't yet exist. You will suffer analysis paralysis and won't go anywhere.
Nothing wrong with documenting plans, goals, ideas etc - but spend more time developing the business than designing it. You can come back and put the finishing touches on it later.

In saying that though - do your best to plan forward a bit to get your business structure in place (and correct) from the beginning. It will save some heart burn later on.

Blacky

 

There's gold in all those replies, thank you all for your input.

I'm relieved that I've read a lot in your replies what my 'gut' was saying in the first place. I'm very prone to analysis paralysis and seeing that huge to-do list raised a giant red flag.

I'm very much of the opinion that letting the business develop organically is the better way to go, and such detailed planning would be restrictive.

That, and the comment about it scaring newbies away from business was spot on! My first thoughts were omg I have to do all this just to have a chance??

Feeling a bit better about it now. And @Lizzie I'll definitely put a dummy website up for everyone here to pick apart first. Got a bit of work to do before I get there though!

 

The IT startup for equity stake one, or is this a new?