We all have our Eureka moments, where in a flash an idea comes to mind and you just know that it could potentially be the next big thing. So now what? First of all you have to distinguish between a good business idea and a viable business idea; the main distinction is that the latter can actually be turned into a viable business.
So how do you know if the business is viable? A business plan is the only way! Business plans are not only used by budding entrepreneurs who need to work out the numbers to check how many euros will be made over a span of time, it is also a common tool used by entrepreneurs and well-established firms who wish to see if their current or new business ideas make financial sense.
The first thing you need to prepare a business plan is time to think and do initial market research. Many people come up with what they think is a good idea and they immediately start planning routine things such as where to get finance from, how many people will need to be employed, and where they will set up operations without taking a second to think if the idea is something new or if it has been done already. A basic online search for whatever you are thinking about will immediately reveal if the idea is new or not. If it has been thought of, you might want to reconsider the idea, perhaps to tweak it just a little bit to have that unique selling point.
The next thing to think about is what makes your idea so special? If you have an idea for something which has never been thought of, then you are possibly onto a good start, and at this point you have to think about how you can keep your product/service as innovative and fresh for as long as you can. If on the other hand your idea comprises of a better version of an existing product/service you have to consider doing more in-depth research of how possible it would be for the original product entrepreneur to catch on to your thinking and kick you out of the market before you have a chance to finish executing your business plan.
Financial planning is the next on the list; you have to clearly outline what costs you will incur. It helps to split the costs between costs which you need to incur to offer the product/service, also known as the cost of sales, and the overhead costs. When making this list of costs it is very common to forget the most basic items, such as water, electricity and registration fees so do make sure that you think about all possible costs.
Do not forget to get quotations from possible sources and also keep yourself up to date with current statutory costs which you will have to incur to get an import license, VAT number or registration of an entity with the relevant authorities. A common practice when preparing a business plan is to also add 10 per cent of the total cost as a contingency for any costs which you may have forgotten to add, just to be more prudent.
Once you have clearly outlined what costs you will incur, you can now start examining your selling price and how many units of the product/service you would need to sell in order to cover your costs and make a profit which will lead to two questions: is it possible to offer so much of the product/service? Is there that much of a demand for what I am thinking of?
Clearly setting achievable targets to execute your business idea is also an important factor in preparing a good business plan. Any business plan which you think of and decide to execute, no matter how prudent and conservative your targets are set to be, will definitely encounter a lot of bumps on the way some of which, without good business and financial planning, you will find hard to overcome.
In today’s world it is already hard enough to come up with an idea which could actually be transformed into a viable business, and there are not many opportunities available for young entrepreneurs to be given a chance to transform their business idea into a viable business plan. The need for such opportunities has been addressed by Junior Chamber International Malta through the 10th edition of the Best Business Plan Competition.
This opportunity is open for all future entrepreneurs aged 18 to 40 who wish to have their business ideas developed, as an individual or a group, and to turn them into a concrete business plan. Through the support of HSBC and KPMG, JCI has managed to organise this competition which gives entrepreneurs seven training sessions specifically focused to give you the tools needed to enhance your business ideas, prepare a successful business plan, market your business plan and execute it.
Successful candidates will also have the opportunity to bounce ideas off professional business advisers through one-to-one sessions and finally make a sales pitch to a panel of judges who will evaluate your business plan.
The successful individual or team will be given a prize of €2,500 which will go towards registering the company with the relevant authorities, applying for all statutory requirements as well as to serve as seed capital to start your own business as laid out in your business plan.
So if you think you have a good idea for a business plan, but are not sure what the next step is, then the JCI 2011 Best Business Plan Competition is the right choice for you. Start by emailing annalisa.schembri@jci.org.mt to receive your information pack and learn more on how you can turn your business idea into a viable business plan.
jjborg@smartlightsystems.com