Sunday, February 23, 2014

Growth Template for New Business Development

Taken from Dilbert Comics
Business Development Plan for a New Business

The most difficult task for one, who is taking entrepreneurial plunge is to balance between risk and growth opportunities. Each new step brings more growth opportunities but also more risk. However, a good conscious of following things can help a lot in minimizing risk:-

1. Business Planning

With Strategy, you have a plan in place which could be deployed at local level or global level. The objective of business planning is to test the viability of project and predict the income and expenditure of the project
Simply put, it is a resume for your strategy planning. A standard template or main components of business plan are as stated below:-
  1. Executive Summary: Write this last. It’s just a page or two of highlights.
  2. Company Description: Legal establishment, history, start-up plans, etc.
  3. Product or Service: Describe what you’re selling. Focus on customer benefits.
  4. Strategy Development:- Majorly PESTLE- Political, Economical, Social, Technical, Legal and Environment Aspects. It gives you broad overview.
  5. Market Analysis: You need to know your market, customer needs, where they are, how to reach them, etc.
  6. Strategy and Implementation: Be specific. Include management responsibilities with dates and budget.
  7. Management Team: Include backgrounds of key members of the team, personnel strategy, and details.
  8. Financial Plan: Include Income Statement for atleast 3 years, Cash flow, balance sheet, break-even analysis, business ratios etc.
A. Strategy Development:
 Standard way to think about your plan is to start with - Industry --> Company--> Customer---> Product--> Sustaining Value

Strategy is effective use of one's resources keeping an eye on long term perspective. For an entrepreneur, it is a challenge to develop or rather follow a clear strategy because there is always a dilemma between short term goals and long term goals. You cannot ignore one at the cost of other. Various frameworks like Porter five forces, SWOT, Competitive Analysis, BCG matrix, Strategy Group Analysis, Segmentation can help you in defining and selecting right and profitable Customers.

The key lies in breaking down Overall strategy into small steps( tactics) or operational steps which can be followed on a daily basis by respective stakeholders. 

In order to achieve this objective, the first step is to identify lucrative markets and perform segmentation. Segmentation is  done on the basis of Customer based variables; which may be price, quality, service etc. Identify the one which is most relevant in your Industry and then categorize Customers.For instance if price is the chosen variable then you can define segments- Highly Premium, Less Premium and Price Conscious Customers.

Identify the key success factors in each segment. These factors will help you in aligning resources and building capabilities in accordance with segments. 
For instance, if you decide to target price conscious customers then you have to build your capabilities to achieve low cost in the industry by achieving methods like economies of scale, efficient procurement, effective manufacturing techniques etc.

The whole idea of segmentation allows you to align your key resources or build capabilities according to the most profitable segmentation.

B. Marketing Planning
So you are ready with your Business Plan and Marketing environment i,e.Target Customers, competitors and the overall economic, political, cultural and technical environment; covering developing trends, as well as the current situation.

Success of Marketing Planning defines the right projection of your products in the market and minds of Customers

1. Portfolio Planning- This serves as deciding factor for right set of product and services. One has to decide which set of products and services supports your mission and Customer needs.

For instance, Taxonomy of Product Portfolio- Length, Breadth and Depth

2. Pareto Principle:- Marketing plan must be simple and concise so that 20% of Customers provide 80% of Revenues. This serves as a yard stick for your Marketing Budget( Staff, Lead Generation, Communications, Trade Shows etc.

3. 7 Ps: Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 Ps can sometimes divert attention from the customer, but the framework they offer can be very useful in building the action plans.
  1. Price — The amount of money needed to buy products
  2. Product — The actual product
  3. Promotion (advertising)- Getting the product known
  4. Placement — Where the product is sold
  5. People — Represent the business
  6. Physical environment — The ambiance, mood, or tone of the environment
  7. Process — The Value-added services that differentiate the product from the competition (e.g. after-sales service, warranties)
  8. Packaging — How the product will be protected

Management Team:-

Depending on the scale of operations and complexity, management team can be formed. The management team is responsible for day to day operations and profitability of company. The size of management team varies from company to company.

Financial Strategy:- A well made financial strategy and tight grip on following parameters is very crucial to adapt to changing market conditions
  • Income Statement for atleast 3 years
  • Cash flow Statement
  • Balance sheet
  • Break-Even Analysis
  • Business ratios etc.


Danny said...

You have to keep in mind that, customers handling is very important for a business. This needs a high professionalism to keep the present customer for the future and also attract more customer from them. So you can hire Best Outsourcing Companies to manage this situation for you at a low cost.

Morgan said...

Now to do those things, then you need tools like complicated models or data visualizations or writing code. But essentially as a data scientist your job is to solve real problems your company is facing. And what kind of tools you use? No one cares. data science course in hyderabad