How to set up an online business 2
How to set up an online business 2
How to set up an online business 2
So what's this then?
This is the second in a three part series of articles addressing the subject of How to set up an online business'. The first part begins with a reality check and the importance of having a business plan. The second part deals with how to use the business plan and assessing progress, the third step covers adapting your plan and concludes with some encouraging thoughts from an expert who has set up many an online business and also includes links to some useful government sponsored resources.
Implement your business plan
The business plan is a working document, it is not something to complete, have bound and place on display as a testimony to your ability to produce a business plan! No, this is just the first step in setting up an online business. It is very important, but it is just the beginning, it needs to be referred to by management (or you) as they (you) set off on their (your) journey into business. It will be or will form the basis for motivating potential financiers to lend or invest.
It is not something that should be constantly amended, but it does need to be reviewed and probably amended at pre arranged intervals (i.e. after planned stages). This is because on the one hand it must not impede or distract attention from daily work operations, but neither must it be neglected when considering ongoing strategy.
I would suggest the following topics should be addressed in your business plan:
business case
goals
strategy
marketing
operations (procurement and or production)
finance (especially a budgeted cash flow statement)
resources (human and technical)
owners, lenders and managers
premises (if applicable).
One of the most important parts of the business plan is the Marketing plan. This has to be informed, not by a great outburst of initial enthusiasm at the prospect of setting up your online business, but by some basic cold, hard, market research. Here matters such as likely demand, expected competition, route to market, pricing, competitive advantage, production or supply, sales and credit policy need to be considered.
When considering finance, do not make the mistake of asking for too little financial support in the hope of generating early earnings. If the earnings happen, it is easy to repay any loans that you have, but if not, you could find yourself in trouble without remedy, since any review by a lender at that stage may not look encouraging.
Assess your progress
The business case mentioned above is also very important in setting up an online business and this needs to be revisited at prearranged intervals. The business case provides the rationale for the business plan, it outlines the expected cost benefit of the plan and justifies the plan. The plan is not justified at start up and then considered justified forever after. This justification needs to be validated or modified periodically and this is done after pre-arranged stages. Fundamentally the business case begins by answering the question why'. Initially the question is why begin this is modified to why continue?
Without a robust answer after each stage, resources can be poured into a project without justification, and a small failure is prevented from becoming a major failure.
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