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Many of the people I work with have a product that they're nurturing as a side hustle until it can fully support them. However, most don't have a concrete business plan or a clear understanding of their profitability. Regardless of your funding approach – whether it's seeking investors, crowdfunding, or self-funding – having a well-developed business plan is beneficial. It not only sets clear expectations for meetings with manufacturers, but it also guides decisions on the landed cost of goods. Whatever your objectives as a business owner, a robust business plan is essential for the success of a product-based venture. Here is how to create one.
Step 1: Create a Detailed Business Plan
To create an effective business plan, you need to define your goals, target market, revenue projections, and expenses. This plan becomes the roadmap for your business's direction. Some entrepreneurs enter the product space intending to establish the groundwork, then sell their business. In contrast, others aim for long-term ownership, perhaps even opening a physical store. Your specific goals will shape the trajectory of your business, and the plan provides clarity for each step of your journey.
Step 2: Determine Your Pricing Strategy
Once you've secured a manufacturer and assessed profitability, it's time to hone your pricing strategy. Consider the total cost of your landed goods, especially if you're importing. This includes the comprehensive shipping cost, any intermediaries or expeditors involved, potential taxes for overseas imports, and packaging expenses.
Step 3: Develop a Sales and Marketing Plan
Begin by defining your brand's identity. What do you want it to stand for? Whether it's upscale sophistication, playful vibrancy, or edgy uniqueness, your brand's essence will shape your marketing efforts. Set clear goals and revenue projections. From there, reverse engineer to determine your required daily, weekly, and monthly earnings to meet these objectives.
Writing a business plan for your new product is crucial for the success of your venture. It provides a roadmap for your business, helps you understand your goals and target market, determines your pricing strategy, and guides your sales and marketing efforts. Whether you plan to sell your product, grow it into a long-term business, or take a different path, a well-thought-out business plan will be your compass along the way. So, don't skip this essential step in your entrepreneurial journey. It's your key to making informed decisions and achieving your business goals.