The Business Plan Workbook

A Step-By-Step Guide to Creating and Developing a Successful Business

Colin Barrow, Paul Barrow, Robert Brown

• Publisher: Kogan Page
• Year: 2021
• ISBN:
  9781789667387
• Edition: 10
• Topic: Business
• Subtopic: Business Development
• Index: Business

Lay down the foundations of a successful business venture through a thoroughly researched and competitive business plan. Based on tried and tested business methodology used at the leading business school, Cranfield School of Management, this 10th edition of The Business Plan Workbook guides you through all the necessary steps to constructing a winning business plan. This is a practical run-through of 26 key areas of development of strategic planning. It will allow you to think of these areas in isolation through the use of assignments that ensure you have stress-tested your business proposition. This guide covers how to
- Come up with a winning business idea
- Complete market and competitive research
- Set up a winning marketing strategy
- Forecast watertight financials and projections
- Define realistic operations and staffing
- Deliver an unforgettable pitch to potential backers and investorsThis new and fully updated edition includes 67 business case studies that show you how successful entrepreneurs have dealt with strategic planning in the past. The content has been streamlined to focus on the most critical parts of business planning, ensuring you spend time where it matters and stay competitive. With new information resources and financial planning consideration, this is an invaluable guide for entrepreneurs, business executives and students.

ASSIGNMENT 1

Coming up with a winning idea for your business plan

In this first assignment you should introduce your ‘business’ proposition to the future readers of your business plan. Explain something of how you arrived at your business idea, why you think people have a need for your product or service, and what your goals and aspirations for the business are. If your proposition needs financing, you could give some preliminary idea of how much you may need and what you intend to do with those funds. Remember, all these ideas are likely to be significantly modified later on – some more than others – but you need to have some idea at the outset of where you are going if you are to have any chance at all of getting there.

Here are the proven routes to establishing the proposition around which to base your business plan.

Recognizing a gap in the market

The classic way to identify an idea for a business is to see something that people would buy if only they knew about it. The demand is latent, lying beneath the surface, waiting to be recognized and met.

These are some of the ways to go about identifying a market gap:

• Adapting: Can you take an idea that’s already working in another part of the country or abroad and bring it to your own market?
• Locating: Do customers have to travel too far to reach their present source of supply? This is a classic route to market for shops, hairdressers and other retail-based businesses, including those that can benefit from online fulfilment.
• Size: If you made things a different size, would that appeal to a new market? Anita Roddick, founder of The Body Shop, found that she could only buy the beauty products she wanted in huge quantities. By breaking down the quantities and sizes of those products and selling them, she unleashed a huge new demand.
• Timing: Are customers happy with current opening hours? If you opened later, earlier or longer, would you tap into a new market?

CASE STUDY

The Northern Dough Company

This Lancashire-based company is the brainchild of husband and wife team Chris and Amy Cheadle. The idea for the business came after they hosted ‘make your own’ pizza dinner parties. ‘We started the business as an alternative for dining out,’ says Chris. ‘Our friends were invited into the kitchen to create their own favourite recipes. They enjoyed it so much they often went home with a bagful of dough.’

Chris had something of a head start as he came from a family of three generations of bakers in Lancashire. But the business idea wasn’t born in an oven. It was only when he looked for an alternative at the supermarket that he saw a gap in the market for a convenient and authentic-tasting product, and the business was born. The idea was tested at a local food market where they sold out everything they had brought in 90 minutes. By 2017 their customers included 250 Waitrose stores as well as Booths Supermarkets, Ocado, Whole Foods and 130 individual farm shops.

Revamping an old idea

A good starting point is to look for products or services that used to work really well but have stopped selling. By finding out why they seem to have died out you can establish whether, and how, that problem can be overcome. Or you can search overseas or in other markets for products and services that have worked well for years in their home markets but have so far failed to penetrate into your area.

Sometimes with little more than a slight adjustment you can give an old idea a whole new lease of life. For example, the Monopoly game, with its emphasis on the universal appeal of London street names, has been launched in France with Parisian rues and in Cornwall using towns rather than streets.

Solving customer problems

Sometimes existing suppliers just aren’t meeting customers’ needs. Big firms very often don’t have the time to pay attention to all their customers properly because doing so just isn’t economical. Recognizing that enough people exist with needs and expectations that aren’t being met can constitute an opportunity for a new small firm to start up.

Start by recalling the occasions when you’ve had reason to complain about a product or service. You can extend that by canvassing the experiences of friends, relatives and colleagues. If you spot a recurring complaint, that may be a valuable clue about a problem just waiting to be solved.

Next you can go back over the times when firms you’ve tried to deal with have put restrictions or barriers in the way of your purchase. If those restrictions seem easy to overcome, and others share your experience, then you may well be on the trail of a new business idea.

Inventions and innovation

Inventions and innovations are all too often almost the opposite of either identifying a gap in the market or solving an unsolved problem. Inventors usually start by looking through the other end of the telescope. They find an interesting problem and solve it. There may or may not be a great need for whatever it is they invent.

The Post-it note is a good example of inventors going out on a limb to satisfy themselves rather than to meet a particular need or even solve a burning problem. The story goes that scientists at 3M, a giant American company, came across an adhesive that failed most of their tests. It had poor adhesion qualities because it could be separated from anything it was stuck to. No obvious market existed, but they persevered and pushed the product on their marketing department, saying that the new product had unique properties in that it stuck ‘permanently, but temporarily’. The rest, as they say, is history.

Be sure to check that someone else doesn’t already own your innovation, and that you can put a legal fence around it to keep competitors out. Copyrights, patents and the like are dealt with in Assignment 3.

Network marketing

Network marketing, multilevel marketing (MLM) and referral marketing are the names used to describe selling methods designed to replace the retail outlet as a route to market for certain products. Although referral marketing has been around since the early part of the last century, for many people it’s still unfamiliar territory. This is one way of starting a profitable, full-time business with little or no investment. It’s also a method of starting a second or part-time business to run alongside your existing business or career. Network marketing is one of the fastest-growing business sectors. Industry turnover has grown from £1 billion 10 years ago to £2 billion today. This way into business provides a low-cost option for over 400,000 people in the UK to get into business, earn money and run a business with very little risk.

In most cases network marketing involves selling a product or service that a parent company produces and supplies. You take on the responsibilities of selling the products and introducing other people to the company. You get paid commission on the products/services you sell yourself and a smaller commission on the products/services that the people you’ve introduced to the company sell. In addition to this, you often get a percentage commission based on the sales of the people that the people you introduced to the company also introduce, and on and on.

Advocates of network marketing maintain that, when given identical products, the one sold face to face (without the cost of maintaining a shop and paying employees and insurance) is less expensive than the same product sold in a store. Additionally, network marketing fans believe that buying a product from someone you know and trust makes more sense than buying from a shop assistant behind a retail counter.

A wide variety of good-quality network marketing companies from all over the world exist for you to choose from. They offer products and services from a wide range of industries including health, telecommunications, household products, technology, e-commerce, adult products and so on. Household names include Amway, Avon, Betterware, Herbalife, Kleeneze and Mary Kay Cosmetics. Choose a product or service that you’re interested in because, when it comes to sales, nothing beats enthusiasm and confidence in the product. Check out the network company using trade associations such as the Direct Selling Association.

Franchising

Franchising can be a good first step into planning their own business for those with no experience of running a business. Franchising is a marketing technique used to improve and expand the distribution of a product or service. The franchiser supplies the product or teaches the service to you, the franchisee, who in turn sells it to the public. In return for this, you pay a fee and a continuing royalty, based usually on turnover. The franchiser may also require you to buy materials or ingredients from it, which gives it an additional income stream. The advantage to you is a relatively safe and quick way of getting into business for yourself, but with the support and advice of an experienced organization close at hand.

Franchising isn’t a path to great riches, nor is it for the truly independent spirit, because policy and profits still come from on high. The British Franchise Association Diary website gives details of dates and venues of events around the country where you can meet franchisors and find out more about their propositions.

CASE STUDY

Concentric Lettings

Dawn Bennett wasn’t exactly new to the property world when in 2013 she took on a Concentric Lettings Franchise. A single mother with a very young child she embarked on her career in the sector when she was employed as an estate agent sales negotiator in 2003. By 2007 despite leaving school with no formal qualifications she had worked her way up through the ranks from lettings negotiator, to s...