Business Plan - Know your competition

Introduction

In this fourth publication in the business planning series of 10 articles, I want to talk about your competition and why you need to know about your competition and not just from your own perspective.

It’s one thing knowing who your competion is and what they do, you also need to understand how they are perceived by their customers. From the moment the customers sees your competitions advert, marketing materials or have any sort of contact with your competition, what is the customer experience?

Analysising Your Competition

OK, do you do your weekly food shopping predominantly at one supermarket? Stop and think why. Is it purely price, convenience or is it the whole shopping experience that takes you back there week after week. Obviously I don’t know, however, your prospective customers “shop” for your product or service in a similar way. So, what is it that will make them come to you? Ask the question “what’s in it for them?”

Example of a customer’s choice – “I buy most of my fresh meat from a local butcher. Yes he is more expensive than the local supermarkets, yes I do have to make the effort and, yes I do have to pay car park fees every time I go there. For me, I am prepared to suffer these incidentals to know I will get exactly the cut of meat I require, the advice on preparing and cooking it and the knowledge that I am getting a “good deal”. This is their value for money deal.

So, why not use a supermarket. Some of them have a butchery department, in the main the meat is of good quality, fresh and well displayed. However, for this customer, they like that little extra they get from their local butcher.

So, how do your customers view your competition, what is your competition good at and what are they not so good at. What do they offer that you don’t, what do you offer that they don’t. What are their prices like compared to yours………….. the list goes on.

So, what do you need to find out? For this we use a tool called SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).

(To learn more about SWOT analysis click on the SWOT analysis button at the end of this article)

Traditionaly SWOT analysis is used as an internal analysis of your business. However, I have found that this tool to be a usefull framework for this and other applications. As you will see from our brief explanation and free template (avialable to you if you click on the button below), the Results template requires for commitment to action. As previously mentioned, action planning is an important emlement in planning for your business.

Strengths:  what are they good at?

• What is their profile (advertising, marketing, web site etc.)?

• What are they good at doing/providing?

• What is their market coverage in your chosen areas?

• What do they do that you do not or cannot?

• Pricing and what packages do they offer?

Weaknesses: what are they not so good at?

• What don’t they do that you do?

• What are they not so good at?

• What is their reputation like?

• Are their prices too high compared with yours (and what the market rate is generally)?

• Where do they not cover in terms of area, clients etc.

Opportunities: are there any opportunities for your business arising from their weaknesses?

• For each of your competitions strengths or weaknesses, what could your business do to take advantage of these and become even more competitive?

Threats: what could your completion do to take advantage of your weaknesses?

• For each of your businesses strengths determine if your competition could outperform you in any way

• For each of your weaknesses consider if your competition could take advantage of these and what you could do to improve your current offering

• What developments could your competition consider to improve their market position?

Once you have data and clear evidence of all of the above, the next step is to put in place an action plan for your business to improve your probability of winning business.

Like any competitive analysis, this is only as accurate as the effort that you put into gathering the information. Remember, the analysis is only a snap-shot in time, you need to have an action to revisit this on a regular basis. Remember, your competition will be looking to improving their position also.

Graham Cripps

Results Consortium Ltd

www.resultsresults.co.uk

Business Plan - Define your customer groups

Introduction

Hello and thanks for taking time out of your busy day once again to read this article.

This is the third publication in the 10 part series I will outline why it is important to identify the differences between your customer groups as how this will have a direct impact how you market, and ultimately sell, to these customer groups.

Customer Groups

Business owners often get confused as to who their customers are. For instance, a mobile hairdresser might say that their potential customers are “anyone who has hair”.

OK, this is true, but this is their total customer group. The fact is that within their market place, a mobile hair dresser may have a number of potential customer groups. For example:

• Parents of who want their children’s hair cut or even styled

• Young adults who want their hair cut and styled

• Women who want their hair cut, coloured and blow dried

• Retired person who has a busy social life but has some mobility needs and wants a hairdressing services at home

• And so on………………………………..

I am no hair expert as you will have seen from my photo, however I do know that each of these customers will have specific needs and that a “one size fits all” approach does not work. We need to engage with our customers on an emotional level. To do this we need to understand their likely behaviours. So using this example, our hair dresser needs to establish the likely behaviours of the parent as opposed to the retired person. Of course there will be some common ground, they all want a service from a mobile hair dresser.

So how can we identify behaviours? Well, there’s no easy answer but a good starting point is to use the term “these are people who……..”

E.g. For parents this could be – “these are people who work and engage mobile hair dressing services for their children and themselves outside of school hours.”

There are a few important points that can be derived from this statement and the group itself:-

• Punctuality will be important

• Flexible working hours will need to fit around school hours

• Younger style preferences will need to be in the hair dresser portfolio

• Consideration will need to be given to working with young children and young adults (CRB etc.)

• The appointment may need to allow for 2, 3 or 4 clients at a time (parent and 2 or three children)

• Consideration will need to be given to skin sensitivity of younger clients in term of products used

All of the above could be included for in any information offered as part of the hair dressers’ advertising and marketing materials.

So if we were to compare the needs of say a retired person, they are likely to be quite different.

Here are some examples for new business start-ups I have worked with recently: -

• LOGISTICS COMPANY – Carriers (DHL etc.);Post Office; Home shopping companies; Local business; general public

• DOMESTIC SERIVES – Professional people both working; sinlge parents that work; single men or women; people with mobility problems

• VEHICLE RESTORATION – Prestige classics; common classics; neo-classics; classic clubs/organisations; “pimp my ride”

• ENTERTAINMENT – Parents; corporate; social clubs; pubs and bars; holiday camps

• BUILDING SERVICES – Home owners; private landlords; letting management agents; commercial landlords; housing associations/councils

• OCCASION STATIONARY – civil partnerships (gay community); clubs; user sites (wedding planners etc.); parents; couples; service providers

For each business it is apparent that each customer group will have different needs of the services and products that these businesses offer.

They also present different challenges. So if we have a better understanding of our customer needs, we are able to better articulate our offer and plan to meet these needs.

Previous Articles

If you have missed  any of the previous articles, you can click on the links below to view them.

• A business plan is key for small businesses

• Defining your personal and business goals

• Understanding you in your business

Graham Cripps

Results Consortium Ltd

Business Plan - Understand You in Your Business

Hi, and thanks for joining me on my business planning publications.

This is the second of 10 in this series and is aimed at anyone needing to write a business plan, perhaps for the first time.

How do you feel about the challenges you face each day. How many of those challenges do you feel equipped to deal with?

You might say, well I do understand me in my business, but do you really? I would suggest that there are often disconnects between you, your character and that of your business. This is quite common.

Business skills exist at two levels, technical and personal or behavioural (sometimes referred to as soft skills).

• Technical – these are all the skills required to run a business like industry specific skills (plumbing, welding, painting, printing etc.), IT skills, book keeping, HR and sales and marketing etc. 

• Behavioural – your values and beliefs, the things that tend to dictate your core behaviours.

Technical Skills

I would like you to take a moment to write down your skills and experience. Go for it, capture all of it from your first job to your last job, what have you been good at. Score yourself (6 is good and 1 is poor).

Now write down all of the skills needed to run your business. Again, think broadly, think about now and in the next 12 months.

For example, these skills might include: -

• Good communication skills

• Good with people

• Enjoy working on your own

• Good with paperwork and systems

• Good with figures and finance systems

• Broad understanding of sales and marketing techniques

• etc.

Now take this list, and score how important each skill is to the business (6 crucial and 1 is nice to have).

Now score how good you are at applying this skill, from your skills list (1 is poor and 6 is competent).

OK, if there is a mismatch, then you need to consider how you are going to acquire the skills (you can train or get someone else to help).

See the following example:

Now, be honest with yourself, how have you scored on the crucial skills, are they all 6’s? I’d be surprised if they were.

Behavioural Skills

Finally, referring to the “behavioural” values and beliefs, check if they are aligned to your business behaviours. What in your business will you always do, sometimes do or never do?

Example:

Also look to see if the business behaviours are a good fit with your own values and beliefs. If not what are you going to do to redress the situation?

In business, it is easy to get bogged down with every day challenges, but to be able to enjoy what you do and not experience unnecessary stress, make sure your business reflects what you can do every day with relative ease.

It is important to keep on top of your “things to do” so make sure you include a target completion date. You can download a free template by clicking the (Business Skills Review Template) button at the end of this blog.

The purpose of this activity is to ensure that whist you are striving to develop your business, you don’t forget your own personal development. You may not be able to do everything, that’s OK. If one of your weaker skills is say book keeping or finance, that’s OK. Get a book keeper involved with your business.

Most small businesses involve other skilled and experienced people as part of their team. Things like web site development, book keeping, marketing and IT are often supported by other team members outside of the day to day business.

This team approach is important. Think about who you have in your team, the business team may include: -

• Your bank manager

• Your landlord

• Your business network group

• Your book keeper/accountant

• Marketing specialist

• Printer

• Your suppliers

• Your family and friends

• Your customers

All of these can make a valuable contribution to your business.

Graham Cripps

Results Consortium Ltd

www.resultsresults.co.uk

Sounds obvious doesn’t it? 

Everyone wants to save money. Most people realise that organised work saves money.

The point is – “How do I get to be organised?”

Two things can help.

The first is PLAN-DO-CHECK-ACT

The second is 5 Stages to Workplace Organisation.

Here, we’re going to have a look at PLAN-DO-CHECK-ACT.

(See my separate blog for 5 Stages to Workplace Organisation) http://www.resultsresults.co.uk/blog/

Plan-Do-Check-Act is a simple, straightforward and easy to use system.

Its purpose is to make sure that your actions achieve what you want them to achieve. And very importantly, that we learn from the way we do things.

Consider going out to get some milk.

You don’t leave the house without a purpose, or a target in mind. You don’t suddenly decide one day “You know what; I’m going to leave the house, drive round for a while and see what comes up.” That would be silly – wouldn’t  it?

You know that you’re going out for milk. You know where you’re going to go to get it. You also have a plan of what route you are going to take. That’s your PLAN.

So you set out – you start on your DO. But hey! There’s a “No Entry” sign on roadworks, so you have to go through a detour. But that’s Ok, you can change the plan a little so you use a different route, but the final goal is the same – get some milk.

So you get to the shop. You pick up some milk. While you’re there your partner texts you on your mobile. “Pick up some bread as well”. So you get some bread. Your plan has changed again, but the core objective is the same – get some milk.

So you drive home. Your DO is complete. Some minor changes to the plan were needed, but the core objective was the same.

So you do a little CHECK.  “I got the milk, but then I had to get bread as well, and I had to use a different route”.

So now you ACT – you learn a lesson “Maybe I could think a bit more about what I need before I go to the shops. I’m going to do that from now on. I’m going to use a different route until I know the roadworks are clear”.

This all seems reasonable here in our “personal life”. We try to do things without wasting time and effort. That’s what we do in real life. But sometimes, that’s not what we do in business.

So we need to apply that same common sense from “Real Life” to business.

• Plan what it is you want to achieve, and how you are going to achieve it.

• Do carry out the plan and allow for modifications to the plan.

• Check whether the plan is working and decide what lessons can be learned.

• Act on the check by applying the lessons.

Notice that we’ve spent a lot of time on the plan. That’s because the old rule of “fail to prepare, prepare to fail” is actually true. If you do what you planned, and act on the checks on how well it works, your success rates will improve. If you don’t plan, you won’t know what you’re trying to achieve or whether you need to change your approach. If you don’t plan, you won’t really have a concrete objective – so how will you know if you are achieving it?

Be very careful though! Only change the Plan during the Do if it is absolutely necessary, and cannot be avoided. And make sure you learn the lessons from the need to change the Plan. That should make your next Plan more robust.

Planning what to do saves time and unnecessary expense.

Doing what we planned, and allowing for necessary modifications saves us time, effort and money.

Checking what worked and what didn’t allows us to learn from success and failure.

Acting on our lessons learned allows us to stop wasting time on things that don’t work, and to concentrate on things that do.

This all saves time, effort, expense.

One question I often get asked when I first meet business owners is “why do I need a business plan?.” The answer is quite simple, but the practice is a little more time consuming (maybe that’s why many businesses don’t have one). As a small business owner myself, I know only too well the challenges that running a small business can present. From getting customers, dealing with problems and then worrying about money. It all falls on your shoulders.

I have been working with small business owners for over 2 years now, both new and established and the problems and challenges are very similar.

So, you are running a small business with all its challenges. How do you spend the day? For most small business owners, they spend time reacting to whatever they are presented with at the beginning of, and throughout, each working day. Fair enough, some days can be like that. However, wouldn’t it be good to be able to have some control over what you do and know that everything you do takes you towards your goals? Having a business plan is the first step to achieving just that.

So what is a business plan?

A business plan is a structured document that sets out your objectives or goals as a business and, once written, becomes a working document that you use to do everything in the business. This is a “how to” plan.  

A considered and well written business plan will clearly describe your goals, and will include the actions that need to be taken to get you there.

So what are the steps you need to take to achieve a viable business plan? For me, there are a few basic steps you need to consider before and during the business planning process. Each step requires commitment to taking action in and on your business.

Oh, just one thing, the business planning process is part of your on-going business activity and must be reviewed on a regular basis.

A Business Planning Model 

• Define your business and personal goals

• Understand you in your business

• Define your customer groups

• Know your competition

• Define your unique selling proposition (USP)

• Establish your sales plan

• Establish your marketing plan

• Establish all your costs

• Determine your business processes

• Plan-Do-Check-Act: Keep the plan alive
  

These 10 steps form the basis of a business plan that provides you with the framework you need to determine “what’s next” before circumstances determine that for you.

Set yourself on the right path. Why not download our FREE business plan template?

Each week we will publish an article on each of the 10 business planning steps to help you on your journey towards writing your own business plan. There will also be access to other free templates for you to use like cash flow forecast, sales plan, marketing plan and many more.