How to Plan your own business?!

[Arabian Princess]

Having a successful business should start sicne the first block you put. Planing for it makes you aware of what you are going to face and what risks you can run into.
So lets argue togther what kind of planing that should we do inorder to capture all those risks and be ready for them.

I would start by:

Market Research

are there enough people ready to accept your business? what kind of people you are willing to serve and why specificly you are choosing those kind of people.
What ages and occuptations you are targeting.

Market reserach could be done by survying (through questionaire) around the attributes around your business. I once had an assignment to start my own business and I wanted to open a library and I was trying to know what kind pf people like reading in order to focus on them more. The same you can do, you can goa round check who are the competitors too inoder to make sure you are ready to face them. Dont forget in your market research you have to include how would you think you want to price your product and service and does it fit teh income of many people around.


This is mostly about market research, what else you think is important.

[Don Khaled]

Arabian Princess, Market research is surely important, because if you have no clue about the market and you want to introduce your product then how will you be able to know if it will get you success?

I believe also you should have a strong advertising managment. Because with no advertising, how will you be able to introduce your product at market?

[Miss Naughty]

nice one... i know its my first time to post here but i liked the thread...

i think also planing ur money is very important... that u have to think how much will it cost, and how much would u sell ur product..
sorry i dont know much about it,, but the way i saw u advertaing i thought i would help u :)

[Arabian Princess]

THanx alot Don for you contribution here :)
and welcome Miss Naughty as a new member of my business team :)

Well Miss Naughty, you brought a very intresting point actually, Financial Reasearch ia an essential part of our business planing.

The research starts from the begining and every penny should be counted for, even the salary you are going to take!!
Managing your money is not an easy task to do (esepcially for me :) ) so planing everything from the begining making the inflow and the outflow of cash at least predictable !

Advertsing Management is important and it is part of the marketing reserach. When you decide which people you want to serve, from there you try to locate what best method of advertsing suit them. For exaple, if you have a children toy, it is not wise to advertise it in adults magazine!!!

[Don Khaled]

Originally posted by Arabian Princess
Advertsing Management is important and it is part of the marketing reserach. When you decide which people you want to serve, from there you try to locate what best method of advertsing suit them. For exaple, if you have a children toy, it is not wise to advertise it in adults magazine!!!

Actually that is in the range of market research, because the question will be "Which market should you aim at". I believe a company with a very rich budget, can easily hit the market with advertising. But what about a company which can not afford much? How do you think the best way to deal with that?

[Arabian Princess]

Don, you touched a very important area. How to advertise when you have a small budget????
Well, I beleive that one form of advertising is Publicity !!!
Publicty could be done by word of mouth and clear explaination to relatives and friends of your product and service and they accordingly would spread the good reputation of your business!

[Don Khaled]

Originally posted by Arabian Princess
Well, I beleive that one form of advertising is Publicity !!!


It's not bad choice, but going public as in telling your family and thier relatives is not enough. Let's say I want to sell "network cards" in oman. Now, no one at the house uses those except few whom set up a network. So this will not work, and you will end up biting your fingers off.

Afflication program is pretty neat. When you can find someone in your similar field, you can make a contract with them for them to advertise your product and you do the same for thier. If this did not work, you can maybe give a company some percentage of what you sell, as a price for them to advertise it. But with someone with no advertising skills or marketing strategy, you can hit it at once, or even twice.

[Arabian Princess]

Don, the advantages of publicty is ofcourse not applicable in some cases.
BUt let me give you an example, one of my far uncles opened a coffee shop, he started telling us about it and ofcourse we started going there and it ended up that it the most prefered coffee shop for the family because they beleive "lets help our relative first".
Ofcourse, you should also offer a great deal of quality along with publicity. YOur family can bear paying the price once for your sake but not all the time!

[arabian-brain]

A word of mouth is not applicable also in today business.


I was surprised how did you guys jump to the conclusion that Marketing research is the first plan to consider in planning your business.

The first block to put is to define your mission statement the purpose that your business is exist or survive for. To say so, it is a vision for the future. Then come the part where you set your goals and objectives and the strategies that will accomplish them.


Do you guys agree with me or I’m too slow?


:)

[arabian-brain]

But what about a company which cannot afford much? How do you think the best way to deal with that?


Public Relation is exactly the answer for your question?

PR is the function of generating goodwill toward a company or organization. (Copied)


Also it focuses on the relationship that is created between an organization and its public. The communication tool, however, is the media that will connect them. Now the good thing about PR is you don’t have to pay any money for it. It is indeed for the public.

This is better then a word of mouth because you will be able to reach a bigger market.

But my question is do we have Public Relation organizations in Oman?

Can I advertise my company’s product in the Omani observer, for example?

Or can my manager get a free interview from Oman T.V to introduce our new product?

So, in which specific region of the business world you are talking about?

Here is some type of PR activities:
News releases
Press conferences
Exclusives
Press Kits
News page
Posters
Community involvement

However, there is one disadvantage of publicity?

It is the difficulty to control the timing and accuracy of publicity. That is why you don’t have to pay anything for it. You are not in control of your advertisement’s message that you want to convey to the public.

[Arabian Princess]

Arabian Brain,
we did not say that we should start with market research, but I asked everyone to post what he/she thinks is important. Thank you again for your post :)

but somehow I dont agree with you that PR does not cost money. If you want to build a strong PR you have to pay for the community a great deal of attention. This attention comes through charity works, exibtions, and so on and all those do cost money.

[arabian-brain]

You are right sister

But if you read my question:

Are you talking about Oman, UK or USA?

In US the local magazine can let you advertise for free. You can talk to the local T.V station and most of the time they let you talk about your business, however, they make the questions for you.

As a matter of fact, as a member of the American Marketing Association, we did a fund raising for scholarships for high school students. We as a non-profit organization, it was difficult for us to have a big budget for marketing activities. So, really the PR helped us somewhat to reach our market.

You might ask me, wait a minute, that is a non-profit organization and that is why it is free for you. However, twice a week in our local T.V station, the station invite two small businesses to address their product to the public for free, however it is only 5 minutes.



So after we collected the funds. We took a portion of it and added it our Marketing
Budget. Later, we advertised in billboards, pens, brochures, and FM radio and business newspaper. So the PR at first helped us to stand up and many people now are aware of our fund raining. This was the first fund raising to do.

The second annual fund raising, we thought a little bit differently in how we are going to collect the funds. Of course, after we have a good budget to do real advertisement
Do I make sense

:)

[Arabian Princess]

Intresting Arabian Brain.
Well ofcourse you do make sense. BUt, if you are talking about those kind of advertisment we do have them (even in a small scale) in Oman. The problem is that not every business would have the opertunity to get those "free" advertsment.

Ok lets say we are opening a business (where ever it is ) without having those free publicty. I know you still think that word of mouth would not be so benefital but it depends on the kind of business. I still think that an ad within ur family gathering "ofcourse for free" would somehow benefit u!!


Any way, going back to the topic. You mentioned that you dont think that marketing research is the way to start .. and started by a mission statment and the company's vision. I do agree with you that they are important .. but I still think before you decide on where you are going to start with you have to check the market you are going to offer because otherwise you would define your mission and vision vaguly !

I am really enjoying those argument :)

[Arabian Princess]

So until now we agreed that to start a new busines you need:

Mission & Vision

Marketing Research

Finacial Research


ok, so what esle??

[Arabian Princess]

Maybe more members will help now in have a scetch of what a business plan need!

[6Sigma]

I think the first thing to do is an Engineering Economy study to see wheather it's worth it or not to start the business at the first place. Second most important thing is a 6sigma team :). Also I wanted to note something out, if you don't have enough money to Market then make a very high quality products. As Crosby say, Quality is free.

[Nimr Mal Zibala]

Business Plan first
Market Research (if u can afford it)
LLC )Land, Labour, Capital resource gathering
Operationalisation
Operations & Capital Depreciation monthly costs
Short run and Long run goals & targets
Profit Maximisation

(word of mouth sucks in Oman unless your business is incredibly attractive)

[Arabian Princess]

Human Resource Planing

This would start as a small scale thing, but at the same time you have to know exactly what kind of people you need and how many of them you will employ. Some people might neglect this part, but personaly I beleive it is important. It is costly to employ a person and then discovering he/she is not the right person.

[Quick Silver]

Here is how both the Business starter and the Investor think of the business plan. ( the top part represents what the business starter thinks of his business and the second part represents what the investor thinks)... business starter is the person, or the group that wants to start the business, while the investor is the funder of the business.......


* WHAT THEY SAY(THE BUSINESS STARTER):
- we conservatively project.......

*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- we read a book that said we had to be a $50 million company in five years, and we reverse-engineered the numbers.

* WHAT THEY SAY(THE BUSINESS STARTER):
-we took our best guess and divided by 2
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- we accidentally divided by 0.5.

* WHAT THEY SAY(THE BUSINESS STARTER):
-we project a 10% margin
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- we did not modify any of the assumptions in the business plan template that we downloaded fromt he internet.

* WHAT THEY SAY(THE BUSINESS STARTER):
- the project is 98% complete
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- to complete the remaining 2% will take as long as it took to create the initial 98% but will cost twice as much

* WHAT THEY SAY(THE BUSINESS STARTER):
- our business model is proven
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- if you take the evidence from the past week for the best of our 50 locations and extrapolate it for all the others.

* WHAT THEY SAY(THE BUSINESS STARTER):
- we have a six month lead
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- we tried not to find out how many other poeple have a six-month lead

* WHAT THEY SAY(THE BUSINESS STARTER):
- we only need a 10% market share
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- so do the other 50 entrants getting funded

* WHAT THEY SAY(THE BUSINESS STARTER):
-customers are clamoring for our product
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
-we have not yet asked them to pay for it, also, all of our current customers are relatives

* WHAT THEY SAY(THE BUSINESS STARTER):
- we are the low-cost producer
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- we have not producted anything yet, but we are confident that-we will be able to.

* WHAT THEY SAY(THE BUSINESS STARTER):
-we have no competition
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- only IBM, Microsoft, Netscape, and Sun have announced plans to enter the business


* WHAT THEY SAY(THE BUSINESS STARTER):
- our management team has a great deal of experience......
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- consuming the product or service


* WHAT THEY SAY(THE BUSINESS STARTER):
- A select group of investors is considering the plan
- we mailed a copy of the plan to everyone in Pratt's Guide.

* WHAT THEY SAY(THE BUSINESS STARTER):

- We seek a value-added investor
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- we are loooking for a passive, dumb-as-rocks investor


* WHAT THEY SAY(THE BUSINESS STARTER):
-if you invest on our terms, you will earn a 68% internal rate of return
*WHAT THEY REALLY MEAN(THE INVESTORS THOUGHTS)
- if everything that could ever conceivably go right does go right, you migh get your money back



taken from Harvard Business Review (HBR), July-August 1997