| ASSESSING YOUR STRENGTHS AND | | | | this will be determined by the following factors:type of |
| WEAKNESS | | | | business |
| How do you assess your strengths and weaknesses? | | | | -- marketing segmentation (divisions of your market |
| SWOT analysis is one of the components of external | | | | into homogeneous parts that you can efficiently and |
| environmental scanning. SWOT analysis (Strengths, | | | | effectively cover) |
| weaknesses, opportunities and threats). Strengths are | | | | -- raw materials availability (for a manufacturing |
| the core competencies of a business idea. Therefore | | | | company) |
| what do you think could be one of your strongest | | | | -- geography and politics; just but to mention a few. |
| unique selling proposition or core competence? A core | | | | DO MARKET RESEARCH |
| competence or unique selling proposition is a factor | | | | Market research is a systematic, objective collection |
| that will make you business stand out from the rest of | | | | and analysis of data about a particular target market, |
| your competitors (people who do same business as | | | | competition and/or environment. It always incorporates |
| you and with whom you will be competing for | | | | some form of data collection whether it be secondary |
| customers and market share). Weaknesses are | | | | research (often called desk research) or primary |
| limitations that prevent you from achieving your goal/ | | | | research which is collected directly from a respondent. |
| objective. Therefore it is important for you to know | | | | The main purpose of any market research is to |
| what are your strengths and weaknesses. This will | | | | achieve an increased understanding of the subject |
| help you when you are doing internal environmental | | | | matter. With markets becoming increasingly more |
| analysis as it helps you to concentrate on your core | | | | competitive the world over, market research is |
| competences or unique selling propositions. | | | | becoming an increasingly important. Therefore you |
| ASSESSING BUSINESS AND PERSONAL GOALS | | | | have to do market research to help you keep up with |
| This is where you are supposed to identify what | | | | the current industry trends in your area. |
| objectives you want to achieve both as a business | | | | IDENTIFY WHO YOUR CUSTOMERS ARE |
| and as an individual. Setting goals helps you have a unit | | | | The identification of customers involves a process |
| of direction. Both the business goals and personal | | | | called market segmentation. Marketing segmentation is |
| goals should be well refined so that you achieve | | | | the process of dividing the target market into |
| overall organizational and personal objectives. They | | | | homogeneous parts that can be efficiently and |
| should be able to merge into one as well as be in line | | | | effectively satisfied by an organization. The company |
| with your interests. You cannot start a business that | | | | does this on the basis of geography, psycho graphic |
| you do not have passion about. Objectives should | | | | and/or demographic. Geographic segmentation is |
| arouse interest and hence obtain action. | | | | whereby you divide your market according to |
| ASSESSING YOUR FINANCIAL RESOURCES | | | | geographic factors such as location, region, country, |
| This is also an important guiding principle to starting a | | | | country and so on. Psycho graphic segmentation is |
| new business. The avenues where you are going to | | | | whereby you divide you target market according to |
| get financial assistance should be first priority. To do | | | | attributes like personality, attitudes, interests or lifestyle |
| this, you will most probably if not obvious, need to write | | | | and they are also referred to as I.A.O variables (for |
| a well convincing business plan. A business plan helps | | | | interests, activities, and opinions). Therefore as an |
| your financier to measure how feasible your business | | | | upcoming entrepreneur, you have to take into |
| is. A business plan also is a management planning tool | | | | consideration these factors. |
| as it helps you to organize yourself as well as how | | | | IDENTIFY YOUR COMPETITORS |
| best to utilize the resources that will be granted to you | | | | Who is a competitor? A competitor is a person, or |
| by the financing authority. Finance could come from | | | | organization/firm that is in the same business as |
| personal savings (Most Recommended), banks, other | | | | yourself and poses challenges and limitations to your |
| subsidiary financial institutions, grants and so on. I would | | | | business since both of you sell and target the same |
| personally recommend personal savings because they | | | | customers. It is important for you to know people or |
| attract no interest element and you are you own | | | | organizations that you are competing with because it |
| accountant. | | | | helps you identify their strengths weaknesses, |
| IDENTIFYING THE FINANCIAL RISKS | | | | challenges and limitation. strengths and opportunities of |
| A risk is an unforeseen scenario or situation that | | | | your competitors should be avoided as much as |
| poses danger to you or your business. Therefore you | | | | possible. You should instead concentrate on |
| should sit down and evaluate possible personal and | | | | weaknesses and threats as this is one avenue of |
| business risks. Identify what factors could pose a | | | | beating the competition. This is done through a process |
| danger to your unique selling proposition or core | | | | called competitive analysis. |
| competence. Financial risks include: inflation, devaluation | | | | Competitive analysis helps you to identify your |
| of currency, interest rates, operational costs, costs | | | | strengths and opportunities (competitors' weaknesses |
| associated with stock exchange fluctuations, political | | | | and threats) as well as those of your competitors. |
| risks, future business development, competition and so | | | | Competitive analysis is done both when doing internal |
| on. Find out factors either within or outside your | | | | and external environmental scanning. This knowledge |
| business which could affect your business financing | | | | gives you ideas on what areas to avoid and what |
| plan. This will help you to plan for any shortcomings as | | | | areas to concentrate on when refining your product. |
| regards to your financial plan. | | | | Identifying your competitors' weaknesses and threats |
| DETERMINE THE START-UP COSTS | | | | and refining them to become your strength is the main |
| Now you have all information you need in order for | | | | reason behind competitive analysis. Your strengths and |
| you to start a new business. You have identified | | | | opportunities form your unique selling proposition or |
| where to get sourcing from and how you will avoid | | | | core competence. This core competitive advantage |
| common financial risks. How do you determine the | | | | gives you a competitive edge over and above the |
| start-up costs? You can estimate your start-up costs | | | | competition and helps you stay ahead of the pack. |
| by considering the following" | | | | Competitive analysis is also important because it helps |
| Cost of sales- which includes product inventory, raw | | | | you achieve a sustainable competitive advantage |
| materials, manufacturing equipment, shipping, packaging, | | | | which becomes you (unique selling proposition). When |
| shipping insurance, warehousing and so on. | | | | the right combination of circumstances and timings |
| Professional fees- This is fees related to setting up a | | | | permit you take a specific action towards reaching a |
| legal structure for your business(e.g limited liability | | | | particular target market, an opportunity exists. These |
| company, corporation), trademarks, copyrights, patents, | | | | opportunities are presents periods of optimal fit |
| drafting partnership and disclosure agreements, | | | | between the key requirements of your target and the |
| attorneys fees for ongoing consultation, cost of | | | | particular capabilities of your firm and are often |
| retaining an accountant. | | | | referred to as strategic windows. |
| Technology cost- computer hardware, computer | | | | DEVELOPING THE MARKETING PLAN |
| software, printers, cellphones, personal digital assistant, | | | | PART TWO OF THIS ARTICLE WILL CONSIST OF |
| website development and maintenance, high-speed | | | | THE MARKETING PLAN. BE SURE TO READ IT |
| internet access, servers, security measures, IT security. | | | | THE DAY AFTER TOMORROW. |
| Administrative costs- Various types of business | | | | If you are planning to start a business keep in mind the |
| insurance, office supplies, licenses and permits, express | | | | following factors: |
| shipping and postage, product packaging, parking, rent, | | | | -- Uniqueness- your business should be unique so that |
| utilities, phones, copier, fax machines, desks, chairs, filing | | | | you will have a unique selling proposition |
| cabinets- anything else you need to have on a daily | | | | -- Leverage- The ability to use borrowed funds most |
| basis to operate the business. | | | | profitably and generate enough capital. |
| Sales and Marketing Costs- Printing of stationery, | | | | -- Turnkey business- You should be thinking of a |
| marketing materials, advertising, public relations, event | | | | business start-up whereby you do not need to be |
| or trade show attendance or sponsorship, trade | | | | there for the business to operate. |
| association or chamber of commerce, membership | | | | -- Internet business- I highly prefer an internet business. |
| fee, travel and entertainment for travel for client | | | | WHY? With internet business, you are assured that |
| meetings, mailing or lead lists. | | | | the business is international. This means that anybody |
| Wages and benefits- employee salaries, payroll taxes, | | | | can access your website without attracting |
| benefits, workers compensation among other factors. | | | | unnecessary costs. It also helps you to create linkages |
| DETERMINE BUSINESS LOCATION | | | | with other businesses across the globe doing same |
| This is where you decide on where your business will | | | | business. This will help you exchange ideas with |
| be located. It could be in a city, town or local setting but | | | | different entrepreneurs across the globe. |