Every successful business must start with a business plan. That’s because a business plan is the blueprint that gives your company direction and focus. It basically acts as a roadmap for growth.
However, business plans cannot be created out of thin air. They are based on research and facts, both of which drive the goals set out in the plan. The necessary research and facts depends on your business’s needs. What one business needs to support its strategies may be different than what your business needs.
Geographic research
In retail businesses, location matters. Before leasing a space and setting up shop, you must conduct geographic research in order to create an effective development and growth strategy in your business plan. Opening a hip café in the suburbs, for example, may not attract as many customers as opening that same hip café in the middle of a vibrant urban neighbourhood. But, if you intend to run a consulting business out of your home, geographic research isn’t as important because your success is not dependent on your business’s physical location.
Demographic research
Understanding who your customers are is also critical to your business plan. Demographic research is often tied to geographic research because where your customers are likely to be is often dependent on who they are. For example, a clothing boutique for trans and cross-dressing men would need to know the socioeconomic characteristics of its clientele in order to know where to set up shop and to better understand its target market.
Which leads us to one last point…
Target market research
Always closely tied to both demographic and geographic research, in order to write an effective business plan you need to understand who your target market is and how to attract them to your business. Do you find your customers at trade shows, networking groups, conferences, through advisory groups or because your chosen geographic location is in a high-foot traffic area? Target market research requires checking out your competition, analyzing your products and/or services and understanding the demographics within that market. What do they need? What do they want? How will you deliver it to them?
For example, before starting Smart Foundations, our two principals consulted their existing customers to get input on the crossover potential of a marketing business combined with a bookkeeping and accounting business.
Only when you have solid research in hand will you be able to create an effective and strategic business plan that gives your business a roadmap for success.
