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BUSINESS PLANNING PART 2
Episode 1726th August 2022 • Komard's Klass • Komard
00:00:00 00:29:56

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BUSINESS PLANNING

PART 2

Lesson Plan for New Businesses and Brands

Prepared by Komards NFTS


OVERVIEW & PURPOSE

The purpose of this lesson is to continue from where we left off last week due to time constraints. We are going to continue with the sections and assorted components of the business plan starting with the Executive Summary and will work through as many of the components possible with examples where possible of the Komards NFTS business plans. 

THE EXECUTIVE SUMMARY

The executive summary is generally speaking three to 4 paragraphs and is more of a synopsis. The idea here is to give an informative summary of what the business is and why it will be successful. Most of the time it includes your mission statement, what your products or services are, basic information about the team leadership, team members and location. Sometimes businesses will include a little financial information and a high level growth plan if you are seeking investments from traditional financing or investors.

ADD Quoted text of our Executive Summary

DESCRIPTION

It's in this portion of the business plan that you will include details about your company. You will give details here about the problems your products or services solve and how. You will want to be specific, be sure to list out who your consumers are as well as any organizations or businesses you plan to serve with your products and services.

Take the time to explain your competitive edge or advantages that will guide your business to success. Are there any experts on your team? Why does it work? How does it work? Where is your company or business located?

Use this section of the business plan to boast about the strengths and positive things your business brings to the table.

MISSION STATEMENT

The mission statement is the core purpose you have for your business and the services you provide. It's here that you will go into the nitty gritty of your mission statement and why you place such high value on it and how it will lead you to being successful.

MARKET ANALYSIS

Before you will be able to complete this portion of the business plan you need to have done your homework and have a good understanding of what your market is, how it operates, its dependencies, and your competition. Know what your successful competition is doing, and how you will replicate and make their processes better.

STRUCTURE

What is your business structure? How does the company operate? Under what governance will it operate? Will it change in the future? Why? This section is all about the legal structure and how you will operate, whether you have or intend to incorporate your business as a C or an S corporation, form a general or limited partnership, or if you're a sole proprietor or limited liability company (LLC).

This is where you will show who is in charge of what with regards to your business and its operations. You will want to provide as much detail as you can. If you're seeking investments this section will play a heavy role in the eyes of most investors. You will want to show the assets each member of the team brings to the table. And I am not referring to any financial assets here. There will be a place to include that later in the business plan.

PRODUCTS & SERVICES

This is a fun area of the business plan in my opinion. It gives you the ability to clearly define each of your products and services in detail. You will also use this section to explain how it benefits your consumers. You will also want to answer questions like is there a life cycle for any of your products and services, is there intellectual property? Share your plans here regarding the intellectual property, be it copyrights. Will you be doing research and development on your products or services? What will that look like?

This is also an opportunity to implement your value proposition. With the value proposition you will describe the pains, pain relievers, and the gains for each of your products and services. Be detailed to be clear about each of them.

PAINS

PAIN RELIEVERS

GAINS

IDEAL CONSUMER

Who is your ideal customer? What do they do for a living? Where are they in the world? These are all questions that you will want to answer. Depending on the product and service there may be more questions to ask. You as the owner need to flush out every possible detail of your consumers possible. Having all this information about your consumers will allow you to approach your consumers and to get in front of them appropriately and successfully.

POSITION & ADVANTAGES

One of the benefits and advantages of your business is having a business plan, because it allows you to see the entirety of the company. It allows you to focus strategically, allows you to set the priorities, manage change and milestones.

Other benefits may be your team, why are they an advantage and how? What about your experience in this field? Perhaps you have a specific skill set? Perhaps you have an amount of capital already that gives you an edge. 

KEY METRICS

When we talk about key metrics we are talking about things like your sales revenues, profit margins and more. If your not sure how to determine these metrics there are a number of valuable resources online. Do your research. Among the metrics that you should include on your business plan and the details of are as follows:

  1. Sales Revenue
  2. This is the first among the metrics because you can tell a lot of things about your business. Week after week and month after month sales can be a clear indicator of the demand for the products and services your are offering. It can also show if your marketing efforts are giving you the desired and needed ROI (Return On Investment)
  3. Net Profit Margin
  4. From this you can see the overall efficiency of your business being able to generate a profit and the amount of profit in comparison to the company's revenue.
  5. Gross Margin
  6. The higher your Gross Margin, the more your company earns by each sales dollar. You’ll be able to invest it in other operations. This metric is especially important for starting companies as it reflects on improved processes and production. It’s like the equivalent of your company’s productivity, translated into numbers.
  7. Sales growth year to date
  8. Monitor your sales growth over various time periods – monthly, yearly, and long-term metrics will give you a better understanding of where your company stands. Make it a goal to accelerate your sales growth every month, or at least keep it at the same percentage, month over month.
  9. Consumer Acquisition Costs
  10. The Cost of Customer Acquisition (CAC) is calculated by dividing all the costs spent on acquiring new customers (marketing expenses) by the number of new clients acquired in a specific time frame.

CHANNEL UTILIZATION

What are the channels you're going to use to market and distribute your products and services? This is something you have to have at least a basic idea of. Having an idea of the tools you will use to market and get in front of your target audience will enable you to determine how to utilize these channels for optimum performance.

Digital Channels

Digital channels can include social media platforms such as Facebook, Twitter, Pinterest and so on. But you should know that other digital channels are available and include but are not limited to email, digital ads, ebooks, and more. These are mediums that can be used to distribute your products and services. The trick is to figure out which of these tools best suits your business and where your target users are. Once you establish where your audience is and the tools you will need to use you will be able to build your plan of how to utilize these channels.

Analog Channels

Analog channels can utilize tools like billboards, newspapers and even magazines that are offline. There is a time and place you may want to consider using these analog methods if you have targeted users that utilize these mediums.

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