Anyone can build a website – literally anyone who knows how to use email and word-processing has the basic skills to create a website. However, not everyone, and for the most part, very few actually know how to make a profitable website that will improve their business (improved lead generation, improved sales, improved profits).
Why would you want more traffic to your site if it doesn’t actually do anything? It’s a wasted investment. It’s like putting an advertisement in the paper inviting people to your store but when they get there the store has no sales people to help them – even worse the store is closed and there is only a sign on the door telling people about what may or may not be inside (but there’s no way for them to buy anything). They will leave never to return again.
Only 8 – 10 Seconds
On the web, we only have about 8-10 seconds of our visitors’ attention where we can attract them, motivate them and point them to exactly what they need. Did you catch that? 8-10 Seconds – that’s it. Look at your own web-surfing habits – how long do you give a website before you go back to Google and click on another link?
Careful planning and goal setting will dramatically improve your results. If you expect to make a living online, expect to spend a significant amount of time preparing your internet business. It’s one of the best ways to motivate yourself and keep you on the path to improved results.
Below are the elements of a condensed business plan. A real business plan can take a long time to produce and has to be very detailed and specific. It’s usually created not just as a blueprint for the company creating it but as a way to raise investment capital from external investors. In our example, we’re not going to get that detailed or worry about external investments. We’re going to do it on our own and this will serve as a vivid visualiztion to help you achieve your goals.
Elements of a Business Plan
Executive Summary – Presented first but actually written last. It is essentially your whole business plan condensed in a one page outline. It has to be clear, concise and convincing.
Describe exactly what your business does, who your market is and the market opportunity you’ve found. You need to briefly explain what sets you apart from your competition and provide a Unique Selling Proposition.
You’ll discuss projected revenues and profits and real figures you expect to produce with your business.
Business Description – Here’s where you start writing and visualizing your actual business, what it does, how it makes money and how you will operate.
You’ve found something you’re passionate about and you’ve found a niche market – explain this in detail, even if you’re the only one who’s going to read it. Explain your competitive position and what makes you unique. Describe what you’re offering that others aren’t and why customers will choose you above all others.
This is where you do some real thinking and creative development. Answer those questions and if you’re answers don’t seem good enough to you, they won’t seem good enough to any customer.
Market Strategies – This is where you’ll want to describe, in detail, the target market you’ve found who desperately needs your solution/s. Who are they? How old are they? How much money do they make? How much do they spend on your type of products/services?
You will also plan how you intend to market your product or service to your niche. How will you attract them? Where will they come from? Pay-per-click advertising? Free publicity? Offline advertising? In-store promotions? Banner advertising and so one.
Discuss how much you will need to spend to attract a visitor and what that visitor’s value is to you. If you’re spending $100 to get them to your site but your most expensive product is only $10, you’re going to break the bank in no time. Invest your energy in planning the two to three top methods for attracting your target audience.
Competitor Analysis – Do you know what a SWOT Analysis is? Didn’t think so. I learned it in the MBA and it’s an analysis you do on yourself and your competitors. SWOT stands for
Strengths – Weaknesses – Opportunities – Threats
Do this analysis on yourself first and it will be easier to do it on your competitors. List your own/company’s strengths – what’s your ultimate advantage? List your weaknesses – what will keep you from success? List the opportunities that are available right now and in the future. List the threats to you like stronger competition, changing technology, rising fuel (shipping) prices and so on.
Do an honest appraisal – there’s no point trying to fool yourself. Creating a business plan isn’t meant to fool you or your investors into believing you’ll succeed. It’s meant to hone your thinking and help you plan for success and how to thwart your competition and offset your weaknesses. If you can think analytically and strategically, you will find ways to improve on your business idea and learn how to be better than your competition.
Operational Strategy/ies – This is where you discuss how you will bring your company into the marketplace, develop a mission and milestones for achieveing your goal. Your mission may be to be the top website in sales/profit for let’s say ‘baby shoes’. Your milestones will be to make your first sale, then make $10,000 in sales, help 5,000 parents across the county, grow an opt-in email list to 4,000 subscribers and so on.
This is where you must plan to profit and come up with solid workable ideas for pulling in multiple streams of profit. Multiple streams of income can come from direct sales of your product, advertising, joint ventures, selling subscriptions, and so on.
Doing this section carefuly and with full attention to detail will help you in the long run. Keep note of your milestones and when you want to achieve them. By sticking to a timeline, you will undoubtedly help yourself achieve your goals.
Management/Team – This section will help you clarify how and who will help you reach your goals. Many of you operate a one-man show (even if you have employees, you’re the one responsible for making all the decisions regarding your business) – so make an honest list of your best assets, knowledge and skills. Do a SWOT on yourself and see where you are lacking in skill and where it might be a good idea to hire someone to help you.
List other people who will help you. Do you have an accountant or a lawyer or business advisor? Do you have access to experts in your field of interest who can help you?
Try to make it as robust as possible. When you look at the competition you can easily see how many skill sets are required to make a profitable business. If you’re missing one of those aspects, discuss how you will compensate for it or get it.
Financials – In real business plans that are meant to secure financing, the financials section at the back is usually filled with many spreadsheets and documents including balance sheets, earnings projections, capital requirements and several other very detailed financial statements. From my experience, this section is worthless and won’t mean a thing if the sections preceeding it aren’t fully planned out and if they’re not executed properly.
My suggestion is to make a personal goal for your income. Don’t set it too high and definitely don’t set it too low. Say you want to make $250,000 in profit a year and work backwards from there. Look at your business plan so far and try to be as objective as possible. What streams of income will be most profitable? How many sales do I have to make to reach my milestones and ultimate goals? How much do I have to spend to make it happen?
With those figures in mind, be honest with yourself and if you’re missing some vital information, then do some research. Check online for statistics about your field of interest. See how much people spend on your product or service in a year. Determine what portion of that you need to reach your goals. Is it realistic or are you dreaming? I’m definitely a proponet for dreaming big but hate to set myself up for disappointment so I use very conservative figures (high expenses and low income) – that’s the worst case scenario. If it still works and allows me to reach my goal, I proceed. If not, I go back to work on the business planning and find better ways to make money or decrease expenses.
Conclusion
When you’ve finished your business plan, which for some of you can take days and for some of you it will take weeks, you’ll be happy knowing you’ve actually taken a real big step in preparing for your success.
Actually creating the business plan and printing it off will help you from a psychological standpoint as well. It tends to solidify or make your goals real and seem very achievable. Most people jump into a web business with no clue about the details I just discussed. They see other people online making money and they want a piece. Maybe they get started and maybe they don’t. I’m guaranteeing that after you’ve finished the first draft of your business plan (because as you learn, you’ll want to make ammendments to it) you will be in a much better position to profit and realize your dreams than anyone who doesn’t write a business plan.
[Via Exante]
