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If you’ve been in business for a few years, chances are that you are more or less following the same business plan year after year — targeting the same type of customers, competing on more or less the same criteria and likely getting more or less the same results, perhaps with some incremental improvement. But suppose you want more? Suppose you want much more? Suppose you really want to ramp up your business?
If you really want to jumpstart your business, I would suggest that you re-evaluate how you are currently doing your business, rather than just doing a lot more of the same. I believe that while most entrepreneurs think they have a great strategy, superior tactics, and terrific execution, the truth is that they don’t. Let’s face it, the average business has an average strategy, average tactics, and average execution. It’s the law of numbers.
If you think you are an exception, maybe you should confirm this by asking yourself some hard, specific questions. For example:
- Do you have high customer loyalty?
- Are you able to charge a premium for your products?
- Do you clearly represent something highly distinctive to your customers that they feel they cannot get from your competitors?
- Do you target a different market segment than your competitors?
- Are your profit margins significantly higher than your industry average?
- Are you the market share leader in your segment?
If your answer to these questions is not a clear “YES” then you may want to consider re-evaluating your business plan from scratch. You may want to especially focus on such core elements as:
- Who are my target customers?
- Is there a niche that I could serve better than my competitors?
- What elements do each of my competitors compete on?
- How am I competing?
- Could I find another core way to differentiate my products or services?
- What do I think my competitors’ business plans look like?
It might be difficult to think of such core business plan issues in the abstract or by reviewing a suggested business plan template. However, I have created a business plan sample for my first business, Bob’s Rent-a-Bike, that highlights the key issues in developing a truly differentiated business model. I successfully used the strategies in this plan to compete against much larger, better financed, and more established competitors.
However, like so many real-life business situations, until I came up with a differentiated approach, I made no progress in competing against the larger firms. Initially, I tried to follow the same strategies that my competitors used by copying their every move. But because they were better established than me, they had much better rental locations. And because they had more money than me, they had new, shiny, brand name bicycles, while all I could afford was a motley collection of used bicycles.
I also put lots of effort into advertising. Different media. Different copy. It didn’t work for me.
I tried cut rate pricing. I offered discounts for longer rentals and free baby seats. It didn’t’ work. I tried every day lower pricing. It still didn’t really work for me.
What did work for me? A totally new strategy! Forget copying my competitors. Instead, I focused on a particular niche of the market that my competitors didn’t want to bother with. And then, my first business immediately succeeded.
Should you throw out your current business plan? If you are the undisputed market leader in your segment with the brand identity and profit margins to match, then maybe not. Otherwise, what have you got to lose? I’d throw out the old plan and start a fresh one today!
About the Author
Bob Adams is a serial entrepreneur and founder of BusinessTown.com.