Business plan - GPS

06/2011

Business Plan - GPS

When a relatively new business closes a short time after being established, many put it down to “bad luck”, a faulty product or defective customer service. However, experience in Israel and abroad reveals that one of the best ways to ensure a business’s success and survival is to write detailed business plans from the get go.

Pre-planning your route towards predefined goals will save you time and energy, and its value should be evident to any rational person. Let s take Moti, for example, a resident of Eilat who knows the south of the country relatively well and has some idea about how to get to Rosh HaNikra in the north, where his friend is about to celebrate his wedding.

“They’ll be people on the way I can ask for directions”, he thinks “and anyway, my brother drove to the area two months ago and roughly explained the route to me”. Moti heads out and gets to his destination – via Om el Pacham, Afola, and Kiryat Ata, with a few u-turns and by asking other drivers. But eventually he gets there, exhausted, sweaty, and out of gas. If he had just opened a map, before he set out, he would have saved himself all this unnecessary wandering.

Launching a business is just like driving towards an unknown destination. Just as maps can save a driver time, effort and heartache, so too can a business plan assist the entrepreneur.

So, before you rent an office, order inventory or begin advertising, it is best to prepare a business plan that will help you envision your business and prevent you, hopefully, from running into any of the risks involved in venturing into the unknown.

Who should write the business plan? As you come to write a business plan, you should ask yourself what is its purpose it and who is it intended for? This will help you chose the best person to complete the task. If an existing business plan is at issue, or one that is only for personal use, it may be possible to complete the majority of the writing in-house. However, if the business plan is intended to help raise capital or directed at investors or banks, its financial components and in particular your analysis of ROI, will be greatly important. In such cases it may be best to make use of professionals skilled in writing this sort of business plan.

Who is a business plan intended for? The first version of a business plan is usually intended for the business owner his or herself. This plan may or may not be shown at a later date to partners or potential investors. In this case, additional chapters may be added that detail the division of roles and responsibilities within the company. Plans intended for potential investors tend to include more detailed financial forecasts, with greater attention paid to specific forecasts such as ROI and ongoing concerns. Plans that are intended for banks, philanthropic funds or venture capitalist, may be regarded as setting out the general conditions for funding.

When should I prepare a business plan? As we have mentioned, a business plan is an essential, long term tool for a business owner to use. Business managers should not be concerned only with putting out fires and managing existing operations, rather they should also be thinking about the business’s long-term survival, the potential of a range of variables, business planning, future marketing strategies and more. This planning should always be done in relation to the original strategy as stated in the business plan.

Am I using all the marketing channels I planned to? Should I update my budget to match the spirit of the times and encompass internet marketing in my marketing strategy? If not, why not? We will go into internet marketing in greater detail below and try and answer that question. You may also be asking yourself whether your prices are competitive or have you been dragged into an unnecessary price war that is harming your business? Are your revenues gradually increasing? Are they being influenced by seasonality as anticipated? Are you ordering inventory wisely? Has the time come to expand your business and venture into new ground? And the most important question of all, are you below or over your forecast monthly targets?

Updating your business plan may be a continuous process; however there arises a particular need to do so before making any strategic or organizational changes to your business, or before undertaking any significant expansion.

Internet Marketing

Internet marketing today can be divided into some chief categories:

• Internet Advertising : advertising on websites and search engines

• Building mini-sites for marketing purposes only

• Search Engine marketing and optimization, so that your website is efficiently identified by search engines and gets placed early in search results.

• Website content ( usually comes to play in the website building and design process)

• Blog marketing

• Print media marketing

• Email marketing

• Viral marketing – video clips and the like that are spread online between users and create a buzz.

• Spam mail

• Marketing on social networks

Generally, businesses implement a number of the internet marketing methods listed above, for example using banner ads that link to a mini-site, or uploading video clips and video blogs and emailing links to these. Much use has recently been made of viral marketing – whereby the majority of the work is done by internet users and the target market themselves rather than by the company. Marketing on the internet is currently one of the key aspects of e-commerce and as internet access and popularity grows, this type of marketing is increasingly becoming attractive to large and small businesses alike.

Advertising on Facebook and other social networks.

Most advertisers tend to allocate the larger share of their budget to Addwords or Addsense. These two accessible and easy to use tools, which are offered by Google, promise users complete coverage of a target audience. However, many advertisers fail to use these tools properly, artificially raising their cost and rendering them impractical for certain businesses or for targeting certain audiences.

The trend in Israel, for example, is for certain search terms to become “hotter” than others for no evident reason. This drives businesses to spend illogical sums, with no consideration of their ROI, on words that “seem” crucial. Due to the high cost of advertising on Google using key search terms, the importance of using other online channels such as Facebook has become evident and a valuable alternative for Israeli advertisers, particularly in the case of advertising that is not targeted at a specific audience.

If your goal is to reach the widest possible audience, then Facebook offers excellent return on your investment. You can segment your target audience, selecting Israeli users only, for example, regardless of what product they may be searching for. Or, by predefined criteria, such as: young, educated and from the centre of the country.

When should I use Facebook to advertise my business?

Advertising on Facebook is particularly useful if you are offering a new service or targeting the widest possible audience. However, this demands that you ask yourself; “who is my target audience?” if your advertising is aimed at attracting random surfers, then Facebook presents a cost effective solution. However, if you are interested in attracting surfers with specific search criteria, then you are better off concentrating your advertising budget on search engine optimization and on placing banner ads on relevant websites.

Business plan - GPS