Planning is Essentialby Anders Russell
Planning is Essentialby Anders Russell
Planning is Essential
In my previous column I talked about spending time in a course for those wanting to start their own businesses. The best lesson that I learnt from that course is this: Business plans are your best friend. A business plan serves multiple purposes - first it gives you a very real idea of what your business is going to be, it wasn't until I started writing mine that I began to see the form the business would take. Secondly, it gives you a schedule (though these rarely work out perfectly), so you know what to expect and when. Third, it gives you credibility - this is the most important thing of all, as credibility is important, even if only for your own morale.
Writing a business plan is a long process and one not without problems (I had to completely rewrite huge sections of mine the day before I was due to present it to a panel that would decide whether I would get government support for my first year of operations, due to a change in my publishing system). But before you even begin writing a plan you will need to sit down and think of a series of questions to ask yourself - ask yourself what products you could make, where you would sell them, how much for and every other question you can possibly imagine. These questions will form the basis of your market research. The question is, how do you ask these questions and get answers from the community?
I used a number of internet based polls and surveyed with the link posted across a number of high-traffic gaming related forums. These gave me some idea of the community reaction to my concepts. You should track down and read through as much of the histories of every gaming forum you can find to get an idea of the gripes of the community. Contact every publisher and distributor (or try to over and over and over - they don't like returning e-mails, in the end I had to spend a small fortune on international phone calls) to find out what they carry, what their contracts are like and every other bit of info you can scrounge from them. Contact your favourite developers and find out how they got started. Go and talk to every gaming store owner in your town, then talk to every gamer - the kiddies playing Yu-Gi-Oh, the bitter group of 30-something gamers playing Call of Cthulhu 5.5ed, the model store owner with their bizarre political views, the WarHammer players and their self-loathing love of over-priced minis (we've all been there), the Harpoon players and the Pirates of the Spanish Main Players alike, and take note of all their opinions. These people, however distasteful you might find them, are to be your customers. Do all of these things and keep a record of it all (several reams of paper and a printer cartridge or three should cover it). And then, later you'll find you don't have everything you need, but in the mean time you have an amazing base of knowledge with which to start planning.
By the time you actually start planning you should have a basic idea of everything that you need in your business plan. Me, I thought I had most of it - and to be quite honest I did have a lot of what I needed, though there are always a few gaps to be filled in later. Market research is the backbone of the business plan, it tells you everything you need to know about your businesses market segment, target market, finances, industry groups, competition, plans, contingencies, requirements and everything else under the sun. A big recommendation - if you don't have one, get an accountant to help you sort out the start of the financials at the very least. Talk to the Tax Department, or IRS, or other applicable agencies: they have hundreds of people who are there to help you with the questions you might have and also help steer you clear of potential problems you may encounter. Though you might see them as the face of evil and government oppression, they really have a strong motivation to make sure that you succeed, because, if you do - they get to tax you more. Mentoring groups in your area can help you with a business plan - and seek out their help, I want to place great emphasis on this. They have been there before. They know what you are going through. They are there to help. And getting help in crafting your business plan is a good thing, because a good business plan is worth its weight in gold, and often, quite a bit more than that.
A business plan is essential if you want to be taken seriously, and a well written one, with extensive market research, realistic financial projections and hopefully, letters of commitment from publishers or distributors are your best bet if you aiming to gain financial backing from a bank or other institution. I would encourage anyone writing a business plan to get it up to the best standard they can and take it to a bank - the institutionalised seriousness of these organisations mean that they can be the best review panel for your business plan. They will find any flaw, question all decisions and go through your financials with a fine toothed comb to see if it is worth taking the risk on your business. Even if you don't want or need a loan, do this anyway - its good practice for if and when you do present your business plan to potential backers.
Recently, I have personally had to seek refuge in my business plan as things just started to well, go to hell in a hand basket. Scheduling, finances and all the rest just started going crazy, but, when I picked up and re-read my business plan, I realised it wasn't all that bad. My financial projections were thrown a little, but should stabilise - and I had anticipated such unknown factors in my plan, so I looked at my back up plans and away I went again, reinvigorated.
In the next column I'll talk a bit more about the expanded role that the business plan will play as you get going - and more importantly, how to not stall as soon as the lights turn green.