Imagine yourself a new businessman, what are the objectives of business that you will keep in mind, if you have to launch a new business. In business, not every good idea succeeds. The dot-com experience showed that even if you get millions to fund your business, your business could still fail if all the elements for success are not present. Selling pet food on the Internet is a dumb idea; hence, it is no wonder that Pets.com perished. WebVan.com closed one of its warehouses, after learning that delivering groceries 80 miles away from a distribution center is not such a bright idea after all.
So what do we need to do to successfully jumpstart a new business? I think here are six steps to launch a new business successfully.
1. Provide a benefit.
A new business stands a greater chance at success if it is responding to a need of a consumer. Our potential customers will buy our products or service if they see that it provides some benefits to them. We must be able to respond to their “what is it for me” question.
As a new business owner, our main task is to understand the difference between the features of our business and the benefits it provides. For example, if we are in the business of selling baby gift boxes, the feature and benefits are:
Feature: Baby toys, books, CDs and videos not found in department stores
Benefit: The customer will be able to conveniently find in one location the baby gift items she or he wants.
Remember, customers buy on the basis of the benefits, and not the features of our products. This is what we are going to use as our main selling proposition, or what we will highlight to convince people to buy our products and services. By understanding the business and its benefit to consumers, entrepreneurs can differentiate their business and create niches in the market where they can enter and survive long enough to build
2. Determine the fit with our market.
Before we can start marketing our new business, we first need to determine our target market. That’s right: not everyone is our customer. Some people erroneously think that they should sell to everybody, and that targeting will limit the scope of their pool of potential customers. Wrong! The purpose of defining our market is to make our life easier and increase the effectiveness of our promotional activities. We can’t strike anywhere: we need to focus our energy and money.
To identify our market, we need to look at our market data and personality attributes of those whom we think would most likely buy our products. Aside from the demographics of our potential customers (age, gender, income level, geographic location, etc.), we also need to determine lifestyle factors. Are there any special interest activities that they belong to? Are there any social factors and cultural involvement that govern our customers? How do we think our market will use our products or services?
3. Right timing is everything.
Some new businesses are way ahead of their times. We may have a brilliant idea, but if the market is not ready for our products, the venture will fall by the wayside.
If we have a product that is so new in the market, be prepared to take on the cost of informing the buyers. Since they are not familiar with your products, show them how it will benefit their lives and demonstrate how they can use it. Infomercials, while costly, are very good vehicles for very new products.
4. Be ready to support our business.
One business reality is that we need money to earn more money. We need resources to allow us to buy equipment, supplies, procure or manufacture products, package our products well and market it. Will our existing capital allow us to buy all the assets that we need in our business? How are we going to finance our inventory? If we are starting online business, do we have the resources to create our site and pay for its upkeep? If our business does not show a profit within the year, do we have the money to support yourself?
When starting a new business, we need to consider three major expenses and plan for them accordingly: our living expenses, direct costs and overhead. Living expenses is the “salary” we must produce to support our self and our family. Direct costs include supplies, materials, and others that we need to produce our product or deliver our service. Overhead is the cost of running a business, and it covers marketing, utilities, office furniture and equipment.
Sure, we can start a business even with little cash, but we need to be extremely creative in stretching our money and be prepared to compromise the growth of our business. We will have no choice except to build our business gradually.
However, having money is not enough to assure success. The dot-com woes, especially, showed that we can burn millions and millions of dollars only to end up a failure. Digital Convergence, for example, got 0 million of funding for investors to distribute Cue Cats barcode readers for free yet laid-off most of their staffs after their business model showed to be unsustainable. The key is to use whatever money we have — smartly.
5. Develop a blueprint for success.
We cannot go into a business unprepared. It is important to have a plan. Think of going to business like going to war: we need to develop strategies to help us overcome our enemies. Without thinking through what we want to achieve and how to get there, you are a sitting duck waiting to be clobbered.
Starting a new business entails a thorough and objective analysis of both our personal abilities and the business requirements. We need to have a clear strategy for marketing and the production aspects of our business. If we are a retail store, we need to have a plan in terms of procurement and sourcing. For all the excitement of a new business, we need to know where and how we will get the funds to finance our business. Do we have the available resources to make this business a success? And a million other details.
A business plan is essential. Even if we do not want to write it all down (especially if we do not have investors), the process of preparing a business plan allows us to think through of every aspect of our business. It makes us think about the viability of our business and helps us avoid costly mistakes. When starting a new business, we base our projected performance on a set of assumptions. If we have a plan, we will be able to test our planning assumptions and create fall-back measures in the event that real life proves to be vastly different from our initial visions.
If we think through our business well, we can discover problem areas early on and initiate efforts to correct the problem. Remember, the business owner with a realistic plan has the best chances for success.
6. Market, market, market.
In this world dominated by hype, we must be prepared to publicize the business or its chance for success will be slim. Unless we are a nationally known name with built-in clientele or our business is located in a prime location, we need to promote customer awareness for our business. If we’re on the Web, we cannot expect to just sit in a corner and expect people to stumble on our site.
Our marketing plan should revolve around three goals. The first is to inform customers what we have. We can do this by letting customers know what we have for sale, either through press releases for possible publication in print and TV media, brochures for our customers and leaflets distributed in your neighborhood.
The second goal is to persuade potential customers to do what we want them to do – buy from us. If we’re in e-business, we do this by writing a very good sales copy on our site including testimonials from satisfied clients. If we have sales representatives, they could do the persuading in our behalf.
The third function of marketing our business is to remind existing customers to come and buy again. If we are a Web marketer, we do this by sending a regular product updates, special offers and promos to customers’ emails. As a smart marketer, we know that we need to hold on to our existing customer base as it is much harder (and more expensive) to get a new customer than to sell to someone who already knows our product and the quality of our customer service.
Developing a business strategy and then launching it can sometime be overwhelming but if we have the right tools, focus and fortitude then the launch of our business strategy can be successful. As a business owner, having a business strategy in place is very important to our online and offline efforts to grow our business.
Some of the essential parts to a successful launch of a business strategy are:
Create a solid foundation with a vision statement. This will help us keep in mind the goals and objectives for our business.
Build on our foundation with a mission statement and a list of goals. Once our foundation is in place then all we have to do is add on the things that will compliment our vision and help to keep our business growing.
Assess our industry and competitors. Having a thorough knowledge of our industry can help us determine who our competitors are and how to make ourself standout among those in our industry.
Monitor our success. Always make sure that you have included a way for us to be able to determine the level of success that we are having with our business strategy.
Be flexible. Once we have generated reports from what we have found when monitor, see if there is room for improvement. Be open to change any area that may need to be tweaked.
As we keep these things in mind during the launch of our business strategy, I’m sure that we will experience success.
Business planning is one of the most important steps towards building a successful startup business, and we can use some specific strategies to create a comprehensive outline. An effective business plan will help us determine our goals and help us organize all of our small business ideas with ease. If we’ve ever been stuck with too many ideas and not knowing where to start, business planning will help take the pressure off. Understanding the business planning process is important for creating something that works, and something that will help us reach our goals. Launching our small business startup is much easier with a clear, step-by-step outline; here’s what we need to know:
Step 1: Organize our table of contents. This will help us outline each area of our business to include our mission statement, products and services, number of employees, and any basic market research information.
Step 2: Collect attachments and appendix materials. These are especially important if our business plan will be reviewed by potential investors or business partners, and can also help with our online business planning strategy.
Step 3: Create a list of key topics and sections. Not only will this create a cohesive document, but we’ll also be able to jumpstart our business planning process with a clear ‘map’ or guide of all our strategies. This list is especially helpful if we’re not sure where to begin, since we can just put each item down on paper and organize it accordingly.
Step 4: Assign projects and tasks for each area. This is an effective business planning strategy as it helps us break down each goal into actions steps. Assigning tasks and objectives in this way makes it much easier to stay on track during each step.
Step 5: Check for grammar, spelling, and even factual errors. Making sure our plan and notes are clear of mistakes is especially important if we’ll be presenting it to others. Doing a quick check will also help you determine if we missed any pieces of critical information and help us fine tune the final draft.
Step 6: Write up an executive summary for our small business startup. This is an important step for all business owners, and can help us pull together the entire plan in a few short pages. Many business owners turn to this summary when they need a briefing on objectives during the course of business, and we can include basic points and topics as if we were presenting it to a board or audience.
Step 7: Get an outsider’s perspective. While we need to keep our business planning strategy and ideas as confidential as possible, sharing our plan with a trustworthy person can help we catch a few key elements of our project. Get an objective view of our plan and notes so we have everything in well-organized and presented in a logical way.
Business planning doesn’t have to be difficult, but many startup business owners are intimidated by the process. Take the time to organize the critical areas of our business and put them in a logical order. Then, break them down into specific objectives and tasks so we have a strong idea of how we can be successful in each area. The time and effort we put into business planning will pay off for the long run, and help us launch our small business startup with success.
Launching a new product, entering a new market segment, being the first to market can bring huge returns.
To be successful we need to identify the right opportunity, build a winning strategy and execute with maximum effectiveness. It is a tough but exciting challenge. And it is essential that we and our stakeholders are confident throughout the process that the project will deliver the desired results.
By definition each new business initiative is unique with the organization possibly moving into uncharted waters. The successful company will be one that understands, anticipates and stays ahead of the market. It makes sense to exploit the knowledge of experts who have been there before: to advise, to test and to learn.
When a sole trader sets up they may have some unstated aims or objectives – for example to survive for the first year. Other businesses may wish to state exactly what they are aiming to do, such as Bangalore, the Internet CD and bookseller, who wants to “make history and have fun”.
An aim is where the business wants to go in the future, its goals. It is a statement of purpose, for e.g. we want to grow the business into New Delhi.
Business objectives are the stated, measurable targets of how to achieve business aims. For instance, we want to achieve sales of Rupees twenty crores in Indian markets in 2009.
A mission statement sets out the business vision and values that enables employees, managers, customers and even suppliers to understand the underlying basis for the actions of the business.
Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. This can motivate the employees. It also enables the business to measure the progress towards to its stated aims.
The most effective business objectives meet the following criteria:
S – Specific – objectives are aimed at what the business does, e.g. a hotel might have an objective of filling 60% of its beds a night during October, an objective specific to that business.
M – Measurable – the business can put a value to the objective, e.g. Rupees hundred lakhs in sales in the next half year of trading.
A – Agreed by all those concerned in trying to achieve the objective.
R – Realistic – the objective should be challenging, but it should also be able to be achieved by the resources available.
T- Time specific – they have a time limit of when the objective should be achieved, e.g. by the end of the year.
The main objectives that a business might have are:
Survival – a short term objective, probably for small business just starting out, or when a new firm enters the market or at a time of crisis.
Profit maximization – try to make the most profit possible – most like to be the aim of the owners and shareholders.
Profit satisfying – try to make enough profit to keep the owners comfortable – probably the aim of smaller businesses whose owners do not want to work longer hours.
Sales growth – where the business tries to make as many sales as possible. This may be because the managers believe that the survival of the business depends on being large. Large businesses can also benefit from economies of scale.
A business may find that some of their objectives conflict with one and other:
Growth versus profit: for example, achieving higher sales in the short term (e.g. by cutting prices) will reduce short-term profit.
Short-term versus long-term: for example, a business may decide to accept lower cash flows in the short-term whilst it invests heavily in new products or plant and equipment.
Large investors in the Stock Exchange are often accused of looking too much at short-term objectives and company performance rather than investing in a business for the long-term.
Alternative Aims and Objectives
Not all businesses seek profit or growth. Some organizations have alternative objectives.
Examples of other objectives:
Ethical and socially responsible objectives – organizations like the Co-op or the Body Shop have objectives which are based on their beliefs on how one should treat the environment and people who are less fortunate.
Public sector corporations are run to not only generate a profit but provide a service to the public. This service will need to meet the needs of the less well off in society or help improve the ability of the economy to function: e.g. cheap and accessible transport service.
Public sector organizations that monitor or control private sector activities have objectives that are to ensure that the business they are monitoring comply with the laws laid down.
Health care and education establishments – their objectives are to provide a service – most private schools for instance have charitable status. Their aim is the enhancement of their pupils through education.
Charities and voluntary organizations – their aims and objectives are led by the beliefs they stand for.
A business may change its objectives over time due to the following reasons:
A business may achieve an objective and will need to move onto another one (e.g. survival in the first year may lead to an objective of increasing profit in the second year).
The competitive environment might change, with the launch of new products from competitors.
Technology might change product designs, so sales and production targets might need to change.