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You Need to Plan and Organize
Planning and organizing a start up business means you have to actually look at and research certain factors in order for your business to succeed. Here, we'll discuss the five W's or the what, who, where, when, and why of a start up business.
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Planning a Start up Business
The key elements in planning a start up business include:
- Identification of products and services
- Identification of customers
- Positioning the products or services for the identified customers
The first consideration while planning and organizing a start up business is defining in specific terms what the business sells.
People sometimes become obsessed with an idea and start the business without translating the idea into a marketable product or service, and at times, without even ascertaining whether there exists a market for the idea. An idea becomes viable only when anchored in products or services that create or add value to customers. Such products and services also need to be attractive, durable, and timely.
The definition of the product or service notwithstanding, the success of any business depends on finding customers who want or need the products or services the business offers. Market analysis is essential in this process.
The market analysis for a start-up business help identify:
- The type of people who require the products and services
- Why such people require the products and services and how they would be used
- Identifying where customers live and shop
- Prices set so people find the products and services attractive
- Identification of major competitors
- Benchmarking with competitors in terms of similarities and differences, and pricing
Positioning the product or service entails identification of a "niche" or targeting a particular segment of potential customers and designing the products and services in a manner that attracts them. The elements of a niche include:
- Pricing of products and services
- Level of services and support
- Location of the business
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Organizing a Start Up Business
Organization of a start up business entails drawing up a business plan and adherence to the same. A comprehensive business plan or mission statement provides the answers on “how to run the business" in terms of business strategy, resource utilization, and statutory compliance.
A good business plan covers:
- Business name, branding, and steps to protect intellectual property
- Legal registration of the business
- The office space, retail outlets, furniture, equipments, vehicles, and other physical resources required, with an underlying objective of “minimizing resources and control" rather than maximizing resources at the cost of assets
- Financial plan including estimates of start up costs, revenue estimates, and a break even analysis
- Accounting standards and methods including system of bookkeeping and analysis, tax compliance, monitoring and recording income and expenses, preparing budgets, balance sheets, and cash flow statements
- Human resource strategy including how to attract and retain the best people, how to develop their skills and how to motivate and instill commitment
- People management including drawing up effective job descriptions, job clarity, and establishing an effective system of supervision
- Employee compensation strategies and methods
- Marketing strategy including various methods
- Contingency planning including risk analysis
The business plan should set clear guidelines and a framework to organize the start up business. It identifies potential problems and ways to overcome such problems.
The 5 W's provide answers on how to plan and organize a start up business. Identification of the products to sell and positioning the same to the targeted customers answers the "what" "why" and who" of the start up business. The business plan concerns itself with the "when" and "where" of the start up business.