What kind of competition do you have for your donut business? How does your business and your product measure up to theirs? Evaluate what your competition does so you can copy what works for them and discard what does not. In other words, learn from those who are trying to get your customers. How do competitors define the product (donuts) in your area? How much market share does each have?

In the competitive analysis of your business plan you will want to look at donut businesses similar to yours including national chains that also operate storefront businesses. If you operate a trailer and move between fairs and festivals your competition is not necessarily other donut businesses (although those count too) but those next to you selling other vending items. Granted, it will be difficult to research these other businesses on wheels before hand. When you get to a fair and set up observe everything the other vendors do that attracts customers and everything they do that has no effect.

Also consider how likely other competitors may enter the market at a later date. Investors will want you to research how saturated the market is and what the barriers are to people who want to make donuts like you do. Do not let your emotion get in the way of your analysis. It is easy to assume that your product will be superior to everybody else’s, but there is much more to consider. Taste, size, price, and service are all important things to look at but are only part of the picture. Try to learn the internal business practices behind the scenes to gage the strength of your competition. Are they creative, motivated, and financially secure? Do they have high employee turnover? These are keys to success as well.

Investors do not want to know why you are a little bit better than the competition. They want to know why you are way better then the competition. Try to view your donut business through the eyes of a customer and if possible be a customer of other donut businesses to gather your information.

Business planning is one of the most critical steps to online or offline business success. It is so much easier to work from a blueprint, when running a business, than it is to work without direction. When you work without any guidance or sense of direction, you get blown with the wind. You get lost in a sea of problems.

When you have a good business plan you can follow it to achieve your life’s dreams. You can modify it as you work from it so that your plan remains relevant at all times. A business plan is the route map to your wildest financial aspirations. All the more reason why you should pay attention to its preparation.

A business plan is a strategic document that manifests the principle of thinking before acting. As a strategic document it details the long term plan to be followed, covering a period of 3-5 years. A business plan is also a tactical document in that it is best constructed at a detailed level that makes the forecasts reasonably accurate over the first year.

Many obstacles stand in the way of constructing a business plan, and this article discusses four of them… being unsure of how to implement a plan, failure to recognise the need for regular updates, ignorance of product planning, and ignorance of marketing planning. The article also proposes solutions to these and other business planning problems.

IMPLEMENTATION

What is implementation? Why must we implement a business plan? How do we implement it? Implementation is the process of acting on a plan. We follow it and apply its findings, while watching the business environment for any significant changes. When there are changes we take them into account by modifying the plan. If the changes are minor we make only tactical changes. If they are major we make strategic changes.

It is one thing to plan, but it is a completely different matter implementing the plan to achieve the desired results. To succeed we must be disciplined while remaining flexible. We must also be objective in our assessments so that we can accurately monitor progress, and we must be ruthless in correcting deviant behaviour. Sometimes this means sacking incompetent personnel and hiring better ones. We shall deal with other implementation issues later.

UPDATES

Why must we update a business plan? A plan must always be up-to-date if it is to remain relevant. You don’t want to follow an outdated plan or it will lead your business astray. An updated plan is one that responds to environmental changes by listening for such changes and using them to adjust its methods.

The necessity to keep a plan relevant means that we must conduct business planning every year. The plan must cover a 3-5 year period in order to incorporate strategic elements. But what are the details behind updating a business plan? We shall discuss this later.

PRODUCT PLAN

A business sells products to make money. As such it must engage in product development or acquisition. What is a product plan? Why do we need a product plan? How do we develop a product plan? How do we implement a product plan? We shall deal with these questions soon.

MARKETING PLAN

Marketing is about bringing customers to your business. Without customers your business can’t survive. You can’t get customers if they don’t like your products or services. Therefore product planning must be driven by marketing considerations.

First you determine what your potential customers want and then you give it to them in the form of products or services. But what is a marketing plan? Why do we need a marketing plan? And how do we develop a marketing plan? These questions will be addressed soon.

Now let us turn to the answers to this and other questions mentioned above… Unfortunately, we do not have enough space in this article to address the aforementioned questions. So we have prepared a special page with all the answers you need. Before directing you to that page let us first summarise what we have done here.

FINAL REMARKS

This article has discussed a number of key problems that you will face when you try to construct a business plan. The problems include…

1. Your lack of skill in implementing a business plan.

2. Your failure to recognise the need for regular updates.

3. Your ignorance of product planning.

4. You ignorance of marketing planning.

The article also points at the solutions you must undertake to resolve these problems. The link to these solutions is provided below.

Here is a simple overview of a planning hierarchy: The business plan is the master document that directs all aspects of an enterprise. Yet, many executives fail to fully understand its importance for achieving goals. Too often, the plan is written then filed away and never used as a key tool in managing a business. A good plan is not necessarily about how well it is written – more important is how well it is implemented. Someone once said, “A partial plan implemented well is better than a well written plan never placed into action”. It is very important to use the plan as your guide, but it must also be dynamic under constant revision because the marketplace is not static. Without a plan, how do you know where you are going and how you will reach your destination?

A business plan addresses functions related to product, marketing, operations, administration, finance, legal, and budgeting. Yes, you can argue that more goes into the plan – remember this is just a simple summary. Planning is like preparing for a road trip. You know where you are and know where you want to go, but how do you get there?

Let’s say your trip is several hundred miles long. Studying your map, you ask yourself questions about time and resources needed before you start the journey. You want to get to your destination as quickly and efficiently as possible, but at the lowest cost without sacrificing essentials or your comfort.

Factors to consider for your trip include mode of transportation, cost, length of trip, and best route in a realistic amount of time. What happens during the trip, if you encounter road construction, traffic jams, or even detours? What if your car breaks down along the way? You tried to plan properly in advance, but now you’re faced with unexpected choices. What resources do have at your disposal? How do you tap resources you don’t have now? What are the opportunity-cost to consider? Which options make most sense to keep you moving on?

Planning your road trip, you consider all the route options. Route A is the shortest, but research shows the route is full of road construction. Taking this route will make your journey longer because of delays and it may cost more in gas money because poor mileage efficiency caused by many stop and go driving. Route B is significantly longer meaning it takes more time to reach your destination. However, there are no detours or construction to deal with. You can zip all the way with minimal stops and find the improved mileage efficiency means less gas station stops resulting in cost savings.

These are the kind of factors requiring consideration when starting a plan. After you decide on the route to take, you must now consider your available resources and their capacity to fulfill your goal. In our road trip example, your next considerations will be influenced by a systems check of your automobile – is it road worthy for a long trip? Must you invest in new tires? Is your battery reliable? You get the idea. How much money do you have allocated for gas, food, and the unexpected? Are you doing all the driving and navigation yourself? When do you start your trip after considering your options?

Being realistic with your goals and anticipating roadblocks will assist you in starting your plan. Don’t waste time constantly refining your plan at the start or you will never reach your destination. Just start with the basic elements using research and a little common sense. Risk is part of the game, but you can significantly reduce future risk if you plan, learn, evaluate, and adjust. Adjustments are always necessary because the market is dynamic – so should be the application of your plan. You cannot anticipate every obstacle, but you will be better prepared to resolve issues if you have a plan and evaluate it on a regular basis.