by Doug Walker, guest blogger
Having a business plan is important for the success of any business. A business plan will help you to evaluate your goals and determine how you will set about achieving them. It will help you recognize where things are not going according to plan and help you take corrective action. A good business plan can also help you to attract much-needed funding.
Setting up in business as a manufacturer representative is no exception, and a well-constructed business plan can mean the difference between failure and success. Here we take a look at how you can create a business plan that really works for a manufacturer representative.
Nature of Your Business — One of the first things you should do is define what the nature of your business is. This is partly for the benefit of any potential investors who might be considering making an investment in your company. Before they are willing to part with any money, they will first need to know what your company is all about and how it will make a profit.
Defining the nature of your business is also beneficial to you when it comes to running your company. It can be all too easy otherwise for somebody to get side-tracked and lose focus on their objectives.
Capital Requirements — How much money do you need to get started? How much will it cost to register your company? What do you need to pay to get business premises of your own? What about utilities, IT, desks, and other furniture and equipment? All of these things will need to be taken into consideration to make sure you have what you need; otherwise, you will struggle to function. It is also a good idea to try and account for unexpected expenses. If financial literacy isn’t your strong suit, there are resources online that will help.
Identify Your Competitors — Who are your competitors? Which manufacturers do they represent? Who do they sell to? What advantages do they have over you, and what advantages do you have over them? How can you encourage customers to buy from you instead of the competition?
Knowing the competition will help you understand just how competitive your field really is. If you find yourself in a fiercely competitive market, then you will need to try and work out how you can stand out from the rest, or even consider another field altogether. Identifying your competition could also help you to learn from them. If they have been in business for a long time, what have they been doing to make themselves successful?
Clients and Customers — If you’re a manufacturer representative, who are you going to represent? Do you already have a relationship with a manufacturer that you could work with? Are there others whose products you’re familiar with that you could approach? Bear in mind that if you’re going to go into business selling products for other people, you simply must have something to sell.
Just as important as having something to sell is having somebody to sell to. Your business plan should include market research into the demand for a manufacturer’s products. Are you selling to businesses? If that’s the case, what appropriate businesses are there in your area? Will you need to travel long distances to meetings with potential customers, or can you find a cloud calling solution for virtual meetings? How much will travel cost, and accommodation if required?
Marketing — How are you going to acquire new prospects? Advertising? Door-to-door? Cold-calling? Is your method of gaining new products something you can do yourself or will you need help? Will you need to employ staff to do it for you, or outsource marketing to another business?
Your business plan will need to take into account the cost and efforts involved with acquiring new prospects. It will help potential investors to see that there is a good business opportunity while it can also help you to identify any potential issues with your sales methodology and finding people to sell to.
Identify Potential Obstacles — Things don’t always run smoothly for businesses. Even the best laid plans are not immune to external influences that the business owner has no control over. For example, the recent global health crisis has put significant strain on the supply chain, and a recent report found that 94% of manufacturing leaders report concerns about their current supply chains. This translates to potential shipping delays for your products, which is out of your control.
While we may not be able to prevent issues from happening, however, we can make sure we are prepared to deal with them when they do arise.
Try and consider which obstacles exist or might exist at some point in the future. How are you going to overcome those obstacles? What contingency plans can you put into place? If you’re not prepared for such eventualities, then it can have a severely detrimental impact on your business; being prepared can help make them more of a minor inconvenience.
Financial Forecast — Create a realistic financial forecast. How many sales do you realistically see yourself making, and how much revenue will they generate? How much will your business cost to run? What overheads will you have? What will be your profit margin once all costs have been deducted from revenue?
It’s important you are honest when creating your financial forecast. Trying to make the forecast look better on paper will not achieve anything for you in reality, other than maybe lead you into debt. If the forecast does not look good, then you will need to re-evaluate your goals. Doing so will make it a lot more likely that you have a business that’s a success rather than one that closes down quickly.
A well-made business plan is important for numerous reasons. It can help you attract necessary investment in your company if needed, while it can also help ensure you have a viable business before you start. A business plan will also help you to keep your company headed in the right direction and identify areas that need improvement. The right business plan can make the difference between a company that fails and a company that is a huge success, so it’s well worth spending your time on creating one that really works.