Venture Planning and Development
Critical Steps for Planning a Successful Business
Starting a new venture is filled with risks and uncertainties. A venture is a business enterprise established despite the uncertainty, and risk of failure or loss, for the purpose of profit generation. Our previous article, “In the Market for New Venture Opportunities?” discussed various ways of identifying new venture opportunities. Having gone through that, you should be bursting with various ideas and may already have one you’re leaning towards. In this article, we will be talking about how to plan for a new venture.
Venture planning is not about writing a business plan. It does not require the intricate details of funding source analysis, professional opinions, entity formation or detailed market analysis. Venture Planning is the process of identifying opportunities, evaluating said opportunities, deciding on the opportunities and starting the venture. It is an assessment of the feasibility of a venture and stance of the founder. The process begs the questions;
i. Should I Be Doing This?
A very important question as you do not want to get into anything you can’t see through. You want to venture into something that aligns with your pre-existing values and vision. It’s important to weigh the pros and cons and decide if the venture would be worth your while.
ii. Why?
This looks at the specific objectives the venture aims to achieve. This could be a solution to a societal need, customers’ pain points or even your pain point; creating a product out of a repetitive process to shorten run time and bulk. Find out the driving force behind this new venture.
iii. How ?
This covers how customers will access your products or services as well how you intend on offering the solutions and the resources required to kick off.
iv. For whom?
This refers to the users of your product or service.
The Importance of Venture Planning
It is easy to ramble on about the economic benefits of starting a venture such as creation of wealth, provision of employment opportunities and bolstering the economy. Nonetheless, there are also a few other reasons that are way up there with the others:
- Planning for a venture helps identify the needs of people, finding out what their pain points are and providing a solution.
- It provides an answer to non consumption
- It gives rise to innovative solutions as it identifies inefficient processes either within the society or an organization;
- which in turn creates efficiency in society and organizations.
- It keeps organizations ahead of their competitors and abreast of the dynamics of their industry.
As an organization, it is important that you kill yourself else a competitor will.
Breaking It Down Into Steps
The first two steps to the venture planning process are identifying opportunities and evaluating said opportunities which we have discussed in detail in our previous articles here and here. Therefore, for the sake of this article, we will be looking at the last two steps, deciding on opportunities and starting the venture, which is mostly just one step as you will see.
Deciding
- Get Familiar with Your Potential Competitors
After answering the major questions we asked earlier in our introduction, it’s time to get familiar with what is happening in the industry you are venturing into and what is currently obtainable. The importance of doing this is to help streamline if need be and refine your idea. Knowing what to expect helps to build a strategy.
2. Evaluating Various Business Models
The venture planning process involves the development of a means of comparing various business models, usually through financial modeling. However, a business model is an outline or rather defines how the organization intends to create, deliver, and capture value, in its economic, social, cultural or any other context. It is the organization’s fundamental profit-making plan which defines the products or services it will sell, its target market, and any expected costs.
It is important to compare various business models and find what model produces profit for the organization and also has the least moving parts. A great business model offers value, minimizes cost and produces profit.
3. Asking Questions
The next thing to tick off your list is finding out if this is a solution your target market requires. You want to know the opinion of the people who will use your product, for whom the solution is provided. However, it is important that this is done without losing sight of the main objectives and mission the organization wishes to achieve. This should be done with a focus.
4. Decide to Go or Not
Once all the necessary information has been gathered and evaluation has been done, it is time to decide if it is something you’re willing to venture into and if not, you repeat the process from step one, identifying venture opportunities; if yes, you move onto the next step, which is starting the venture.
Starting the Venture
It’s important to carry out a pilot program. A pilot program is a small scaled version of the product or service you want to offer. The purpose of this is to ensure that you’re able to evaluate the feasibility, logistics, costs and reactions of users to your product/service. In order to carry out your pilot program successfully, here are some things to note:
- Set Clear Goals
Understanding what success will look like for your new venture would help to know what to look out for. This will be in line with the objectives of your venture. Having identified what the goals are, ensure they are measurable to help decision making at the end of the program.
2. Define the Timeline
Decide how long it would take to test out your product/service under normal conditions; as it would be when you do launch. Set out an appropriate time to test the various aspects of the new venture. It is important to also allow time to test for additional use cases or try out features that you may not need as frequently. This will aid in making a more informed decision.
3. Select a Sample Group
This group is made up of individuals who your product/service is targeted at, people who will interact with and use your solution. It is important that this group is large enough to derive inferences from. A great way to attract this group is through free product and service offering or free trials. These people are usually known as early adopters. Once your sample group is selected, resources should be provided to ensure that they get a great experience and understanding on how to use the products during this phase.
4. Feedback
While the sample group tests out the product/service, ensure there is a platform to receive and keep track of feedback. This is the time to troubleshoot issues as well as receive feedback on what works and what doesn’t and try out solutions. Feedback can be received through user surveys, discussions as well as your own evaluation of how the pilot program meets the intended objectives.
5. Address Challenges
After the pilot program has been concluded, issues, inefficient processes and non-cost effective processes should be addressed. The benefits derived from the product/service should outweigh the cost of executing it. Find out what your return on investment and break-even would be to manage expectations. Once this has all been done and the evaluation returns positive, you can go ahead and scale, refining with newly learnt information and discovery.
Planning for a venture can be difficult so we’ve made it easier in the steps outlined above. Implementing the idea may be more challenging especially when it comes to deciding what model works and finding out the best model to apply to your idea. So, in our next article we will be discussing how to develop a business model that works.
