Like anything that is designed to stand the test of time, building a business starts with strong foundations.
It requires a plan, which you build the business to; milestones that you need to reach along the way; and a method that indicates exactly what actions need to be taken at what point to achieve the vision you have.
So, let’s investigate how you build a strong foundation for your business, and what exactly you need to put in place.
The foundation is the business plan
The foundation to any successful business is the business plan.
This comprehensive document covers all the information about your business throughout its life, and is altered along the way to cater to all stages of the business journey.
Among a wealth of other information, the business plan covers five key foundations, including the product/service, the business environment, the resources required, and its position in the marketplace.
This business plan is essential during the start-up phase of any business, helping the business owner clearly map out exactly what your business will look like.
It then remains relevant as you chart the further course to business success, helping you set goals, take action and meet the major milestones required to accomplish your vision.
And this plan spans five key areas that are the solid foundations to any business.
Product or service
A clear definition of the product or service you intend to provide is vital.
The business plan maps out exactly how this product or service will be offered, including where you will source the items required and how it will be manufactured or provided.
It sets the foundations of the base cost of the product/service and the fee you will charge in order to turn a profit in the business.
The market
Arguably the most important foundation to any successful business is an intimate knowledge of the marketplace.
In other words, where are your business opportunities? Who is your ideal client? Who will benefit from this product or service? How much demand do they have for it? How much will they be able and willing to pay? And how is your product/service different to other existing businesses already in that marketplace?
This foundation sets out your position in the marketplace including your business’ strengths, weaknesses, opportunities and threats.
Human resources required
What human resources will be needed to create this product or offer this service? How will this change as the business grows?
The plan looks at this in depth, defining key positions, including the ownership structure of the business, and the support staff that will be needed to meet that vision.
Finances
Every business requires initial capital – whether that’s a monetary investment in plant and equipment or premises, or an investment of time on behalf of the business operator.
The financial model and foundation of the business plan walks through the investment that will be needed in start-up and then beyond.
Plant and equipment
Some businesses will require extensive plant and equipment, others will need less and might simply be dependent on the skills or services of the business owner.
Regardless, when you’re running a business, it’s essential to look at the plant and equipment required, including any associated cost, risk and liability involved.
Marketing
It’s no good having a business if no-one knows who you are or what you do. This is where marketing comes into the equation as the fifth key foundation of building a business.
Drawing on what you know about the marketplace and your ideal customer, the marketing component of the business plan maps out your marketing strategies, including who you need to target to attract initial and ongoing business, and how much you need to spend to do that effectively.
The final word
As I’ve mentioned, the business plan is the foundation to building a successful business.
But it’s not a document that you create in the start-up phase then allow to languish, gathering dust on a shelf.
This living document evolves over the life of a business, encapsulating any subsequent dreams, plans or growth goals beyond the start-up phase.
It also covers far more than the five areas I’ve mapped out above in intricate detail. However, if you keep those five principles in mind throughout your business journey, you have the foundations that ultimately lead to success.
