Tag: Gathering

Mind Mapping and Information Gathering For Successful Drafting Of a Business Plan

Information Gathering Prior To Drafting the Business Plan – The planning phase.

Business or hobby?

A question begging an honest answer is, “Is it a business you want to start or is it a hobby?” This is a vitally important question because these are two very different enterprises or entities. To start and run a business takes a lot of extensive, in depth analytical thinking, legal steps need to be taken, and a lot of planning and budgeting needs to be done. One can’t stress this enough.

Entrepreneurial skills

Entrepreneurial skills are naturally inbred in very few people. The Indians and Chinese seem to have it as a natural trait. Many people think that because they’re starting a trading business, that it should just succeed because they are buying at a low cost and selling at a higher price. So, therefore then, a profit should be shown and all should be in order. Not true in many cases, many hidden costs are not taken account of. Hidden costs exist such as telephone, petrol/transport, stall or rental, packaging, owner’s salary, and so forth.

Many times the business owner uses the money, which should be in reserve for purchasing more stock, for his personal use and then he wonders how all the money or profit has “disappeared”. Now he would need to raise more money somehow to purchase his next batch of stock and/or raw materials. Such a business owner is actually getting poorer each day and he is hardly aware of it.

If one approaches only one’s friends and family with a business idea, and none of them have the necessary knowledge to advise one, the rot will begin to set in. Wrong or ill-informed advice is not what you need.

Drafting a complete and accurate business plan is a very important step that anyone can take who wants to start any new business, or expand an existing business. The business plan covers all the important steps, decisions, reports and forecasts needed to assess the likelihood of success or failure in the new venture. At least one then has a foundation from which to work. It can always be used for reference purposes during the life of the business and it can easily be adjusted for future expansions or changes to the business process.

Planning the business, mind mapping and information gathering

If one approaches only one’s friends and family with a business idea, and none of them have the necessary knowledge to advise one, the rot will begin to set in. Wrong or ill-informed advice is not what you need.

The act of planning helps you to think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later.

Bankers and financiers presume that one means business when one approaches them in this regard and they expect to receive honest and accurate information. There is no quick and easy way to deal with this; it’s their way or no way.

We all have skills, talents and learned abilities. These can be used to operate a business, which will generate an income. Extensive, in depth analytical thinking and planning is very important though because, without it one is destined to fail.

Discuss your business plan with people who can give you advice; Bankers, Dept. Trade and Industry, Business Partners Inc., other institutions who grant money for small business initiatives, an attorney, an accountant and various other people who have a wealth of experience in their fields of speciality.

When planning to start a business take the following steps:

  1. Speak to product specialists for their advice concerning your products and/or services.
  2. Speak to bankers, a lawyer, an accountant and a number of institutions offering grants or loans to small business initiatives.
  3. The above people will give you a blank Business Plan form, among other forms, to complete.
  4. The business plan is normally of great assistance in planning and budgeting for the business. And it is a good guide to all that needs to be done and decided upon.

Meet with whoever your partners will be, if any, and discuss the whole planned business process, including:

  • The type of business ownership best suited to your business
  • The products or services to be offered
  • The premises needed
  • The machinery and vehicles needed
  • Start up expenses need to be established and discussed
  • Capital requirements and directorship of the business
  • Decide on who will perform which functions in the running of the business.
  • Your target market
  • The environment of your area to be covered
  • The economy relating to that area, current demand, future growth, etc.
  • Determine what barriers exist at present which may hinder your success
  • Promotion of your products and/or services
  • Distribution channels
  • Operational plan i.r.o purchasing, production, sales, etc. needs discussing
  • Legal environment and requirements
  • Inventory and suppliers
  • Insurance and other professional advisory requirements like, lawyer, accountant.
  • Establish a system of record keeping
  • Bank services needed
  • Personnel requirements and Human Resource policies
  • Do the costing of each product very accurately.
  • Calculate selling prices based on all costs plus mark up
  • Draft the projected financial plan or budget for twelve months
  • Draft the projected cash flow for twelve months
  • Draft a starting balance sheet

This key information will then be used to draft a meaningful business plan. And the information is all inter related an in sync. In closing, the pre-planning phase takes time and effort but it is very necessary as a step to ensuring success.

10 Tips for Effective Competitive Intelligence Gathering

Competitive intelligence gathering can be a useful exercise that yields important information to guide your business and marketing strategy, or it can sit in a computer file and collect the equivalent of electronic dust if you’re not careful. While a competitive intelligence project can bring out your inner spy, it can also lead to confusion, misinterpretation of data, and faulty strategy-setting. Worse still, it can lead to something I call the “me too” syndrome in which you end up pushing your business into a model that’s a poor imitation of a competitor rather than an authentic and rich representation of yourself. The following 10 tips for effective gathering and use of competitive intelligence information may help you avoid the pitfalls of gathering information on your competitors while simultaneously helping you use it effectively.

Tip 1: Schedule Time Regularly to Perform Research

One of the most common complaints from business owners is that they don’t have time to do competitive intelligence. They also complain that they don’t have time for market research, marketing and promotions, and you name it – they don’t have time for it. Every entrepreneur, business owner and executive is faced with this problem. Honestly, have you ever had a day in which you just had oodles of free time? Probably not. The best way to overcome this problem is to block off competitive intelligence time on your calendar as you would an appointment with a prospect or an important meeting. Block off at least one hour a month, and preferably one hour every other week. This should give you some uninterrupted time to do some internet research and begin your competitive intelligence-gathering efforts.

Tip 2: Keep a List of Competitors Handy for Future Research

One time-saving tip I like to share is the handy spreadsheet; keep a list of competitors on your spreadsheet for future reference. Include the date last researched, the name of the competitor, and the URL of their website, and leave the last column blank to type in any research notes. This ensures that each month, when you sit down to conduct your competitive intelligence work, you’ll have the list handy and won’t need to reinvent the wheel.

Tip 3: Listen to Your Customers When They Mention Other Companies

Your customers are an invaluable resource of information about your competitors. If they mention that someone else does the same thing for cheaper or better than you do – note the name. That’s a competitor. Whenever I get a call from a prospective customer, I always ask, “How did you hear about us?” Often they will mention they visited a competitor’s website first and then came to us, or they used a competitor’s services and weren’t happy with either the price or the results, so they are seeking a new vendor. The companies, products and individuals they mention may be competitors, and provide you with great information to start your research-gathering efforts.

Tip 4: Track Products and Services, Messages and Offers

Many people make the mistake of simply tracking the overall efforts of their competitors. It’s important to note not just the direction the competing company is headed in, but what new products and services they are offering. Look at the messages they are using to describe their products and services, and any prices, sales or special offers to entice customers to buy from them. Are they retiring programs? Adding new ones? Touting research projects? Offering special events or announcing participation in a trade show? Each of these pieces adds up to the big picture of the activities of your competitor, and merits tracking and monitoring.

Tip 5: Sign Up for Competitors’ Emails and Social Media

To make your job easier, sign up for your competitors’ press releases, email newsletters and announcements, and major social media sites. You’d be amazed at how much they share with their customers, information that you can obtain freely and publicly. You can even set up a Google Alert to monitor new information and articles published about them.

Tip 6: When You’re Stuck Looking For Information, Search on a Key Executive’s Name

Here’s a useful trick I learned when researching an industry for which there was little published information about industry revenues, market growth, demographics and more; use a key company executive’s name as the search term and see what pops up. In my specific example, the executive had an unusual last name, and when I typed her name into the search engine, the result was several articles in which she was quotes about the detailed demographics of the industry I was researching. If you know the names of your competitor companies, then you can find out the names of key executives. To find any interviews they may have participated in, search their names. You may unearth some golden nuggets of information.

Tip 7: Examine SEO and Internet Marketing Efforts

Take a few minutes to examine any search engine optimization (SEO) elements your competitors may have put into place on their web pages. While a complete discussion of every potential method and element is beyond the scope of this article, there are many good resources online offering advice and suggestions for what to examine and how to find the information. For example, you can plug any URL into the Google Keywords Analysis Tool and the tool will attempt to extrapolate the keywords from the page. A cursory examination of the HTML code on any web page uncovers any meta tags in place, and using your favorite search engine, you can read your competitors’ page descriptions. Learn as much as you can about SEO and use this knowledge both to empower your own internet marketing efforts and to help you uncover your competitors’ level of SEO fluency.

Tip 8: Don’t Fall Into the “Me Too” Trap

One of the pitfalls of conducting competitive intelligence is assuming that what you see your competitors doing is the ‘right’ or ‘best’ way of doing things. If the competition is running ads on certain websites, the company owner feels he must, too. Beware of the “me too” trap and of copying anything, even the smallest thing, your competitors are doing. First of all, you don’t know if what they are doing is successful; they could be failing miserably at their efforts, not generating any sales or leads from their campaign even if you happen to like it. You don’t have access to their results, so you don’t know what is working and what isn’t. Copying anything they’re doing could be dangerous. Why make your business into a poor copy of another? Instead, focus on how you can improve your business, products or marketing efforts based on what you learn during the competitive analysis. Can you add new features? Better service? Focus on your own efforts and avoid the ‘me too’ trap.

Tip 9: Avoid Pricing Wars

Another trap many novices fall into is getting into a pricing war with competing businesses after seeing their prices. Many business owners realize that their prices are higher than the competitions’ and panic, thinking that by lowering their prices they will beat the competition and increase their own sales. You may increase your sales but unless you can decrease your costs, you’ve also just decreased your profit margin. And how much of that can your business withstand? What if your competitor decides to lower prices further – can you afford to keep lowering yours? Can you afford to set your customers’ expectations around lower prices?

Tip 10: Use the Information to Choose Your Strategy

After completing your competitive assessment, use the information you’ve uncovered to establish your own marketing strategy. Strive to improve your products, promotions, and service, always focusing on what you can do better, more efficiently or less expensively (while still maintaining margin) than your competitors.

Focus on your own business strategy, and decide for yourself how you are going to position your business in the marketplace in light of what you’ve learned. The result may be a competitive business, one that acknowledges competition without being a reactionary to the competition. Be the leader, not the follower, and use competitive intelligence to your advantage.

Exit mobile version