You have been researching for years and reading all the hype and glory of how easy it is to make money using the Internet. More than likely you have fallen for more than one get rich scheme in the past few years. None of this works without a business plan and knowing what you want to do. If you are serious about opening an Internet business and you believe you have a good idea, it is now time to develop your idea.
Developing your Business Plan
The first phase of opening a new business and finding investors is your company’s description and what type of business you want to open. Your business plan tells your potential investors about your business, your goals, and what your unique proposition is. When writing your business plans include the following:
- Detail what the nature of your business is and give examples of the marketplace your new business can satisfy.
- Give complete details of your products and services and how they will meet the needs of your targeted market.
- If your new business serves consumers, organization, or businesses list all the details of how you plan to carry out these services.
- Most important, list how you can bring value to your customers. Describe your competitive advantage, your site, if you have experience in your field, and how efficient are your operations.
Research and Market Analysis
Phase two of your business plan illustrates your new industry and outlines your market knowledge. Include any and all your market research findings and your conclusions. Your research and market analysis should include:
- A description of your industry, your current size, and a historical growth rate chart for the next 5-years.
- Describe your customer’s needs and how you can meet these needs. Show demographic charts for the site, groups, seasonal or cyclical purchasing trends that will impact your business.
- Include analysis charts for your market, project annual purchases, and forecasted market growth.
- Define your geographic location and what you forecast your market shares are and the percentage of customers your business will gain.
- Give complete details of your pricing structure, your gross margin levels, and if you plan on offering any discounts.
- Chart your competitors, their product lines and services, and what percent of the market share your business will gain.
- If your new business has regulatory restrictions state all restrictions and how you plan to comply with these restrictions, and the cost of the compliance process.
Your Business Organization and Management Chart
The third phase of your business plan is the organization and management structure of your new business. Create an organization chart with narrative descriptions. Prove to your investors you have left nothing to chance. You have thought of everything, what each person’s responsibilities are, who is in charge of each function, and who is on your board of directors. State if your company’s incorporated, if you have formed a general or limited partnership, or if you are a sole proprietor. Include your board of directors, salaries, benefit packages and what incentives you are offering.
Define your Service and Product Line
Phase four describes your service and product line and emphasizes the benefits to potential customers. Include all the information that outlines the benefits of your product from a customer’s perspective. Show the ability of your product or service to meet the needs of your clients. What advantage does your product or service have over your competition? Show growth charts and life cycle charts on your product and what the product’s current stage of development is.
Define your Marketing and Sales Plan
The fifth phase of your business plan is designing your marketing strategy. Make your plan unique for your business and part of your ongoing business-evaluation process. In your marketing plan always include:
- A penetration strategy for the market.
- Your company’s growth strategy.
- Your distribution strategy.
- Your communication strategy for reaching your customers.
Once your marketing strategy defined, your last step defines your sales strategy. How do you plan on selling your product or service to your clients? In your sales strategy include the two primary elements:
- Your sales force strategy.
- Your break down for your sales activities.
Funding your new Online Business
Your last step in your business plan requires the capital to launch your new business. Your new company needs start-up funds to grow. Venture Capital Firms invest in new companies after reviewing their business plan. If the VC firm likes your business plan they will invest in your start-up company. The seed round gives your company the first round of funds. Over time your company will receive another 3 to 4 rounds of funding before going public.
Before submitting your business plan for funding make sure you have polished your presentation and you are ready for anything. When presenting your business plan, speak with confidence. Know your business plan and be ready to answer all their questions. When seeking funding from a Venture Capital firm, remember the firm expects a return on their investment. Be ready to offer the VC stock in your company and some control over your decisions. In return, the VC firm can offer you more than just money. In some cases, VC firms have contacts in your new start-up industry or the valuable experience they offer to your company.