The development of a business plan is the first step in turning an idea for a product or service into a lucrative endeavor. Planning is an essential part of developing and managing your business. Recognizing its value in the early stages of your business will pay off in the long run. A business plan will help you to appreciate what it will take for your company to be successful, and it will keep you focused on your goals when the going gets tough. When it comes to planning, there are no shortcuts.
At first glance, the concept of creating a business plan may seem overwhelming, and getting started can be a challenge. While the process is fairly general, every business has unique characteristics and needs. You may be able to start with simple notes, while others may need a more-detailed analysis. Deciding which of the two you will need, or something that falls somewhere in between, may depend on your need for outside support or financing. Most commercial lenders will require you to provide some research to justify a loan. At a minimum, a plan should provide answers to these questions:
- What do I want and what am I capable of doing?
- What are the most workable ways of achieving my goals?
- What can I expect in the future?
Follow these basic steps for creating your business plan:
Make the commitment to go into business for yourself.
Assuming you have made the decision to go into business, the next step is choosing which products or services you will offer.
Choose the products or services your business will offer. What is your experience with the product or service you wish to sell?
Under the umbrella of “engraving” are several recognized markets for engravable products, some of which require special equipment. Due to the crossover of markets and range of products, any given shop may do a variety of items, serving multiple markets. Having said that, proper research into those markets will make your engraving equipment buying decision much easier. Here are items and markets to consider:
- Gift Items
- Trophies & Awards
Research the local markets, define the local needs and areas to exploit, and get to know your competition.
Regardless of the type of business you choose, there is no substitute for conducting a little market research for your local market. You may be able to get valuable information from trade publications that take a periodic industry census. Also check out local maps and seek information from the local chamber of commerce. Most community organizations will have a business development department that can supply you with key information at no charge.
Ask yourself these key questions when determining your location:
- How saturated is the local market for the products I plan to offer?
- Is the potential customer base sufficient enough to support my business plan?
- Is the community healthy, and does it provide a stable environment for my business?
- Are the demographic characteristics compatible with the market I plan to serve?
As is the case in any business, you will have competition. At first it may not seem obvious, especially if you’ve carefully chosen your niche and location. It will take a little investigative work to determine where your potential customers currently get their engraved products. Some companies provide a wide range of gift items that can be personalized. Others specialize in just one product, such as pet tags, or engraved safety and directional signage. Focus on engraving shops that fail to offer your line of products or services, and capitalize on their weaknesses. Here are items to consider when developing a strategy to beat your competitors:
Hours of operation. This may seem obvious, but it’s often overlooked. Early or late business hours, for example, can be your edge over the competition.
- Product offering. Never underestimate the appeal of unique items and selection.
- Presentation. Offer your customers a tidy shop with good examples of your work.
- Quick turn-around.
- Quality. Standing by your work will create a loyal repeat customer.
- A fair price. In general, people believe that they get what they pay for. As long as you’re fair, you can compete on the other factors that separate you from the rest of the engravers in your area, even if your price is higher.
Take a realistic approach for potential sales revenues. Try breaking down the first year by month, the second year by quarter, and the third year’s sales annually. Take into consideration things like peak/slow seasons for the products you will offer, and holidays and vacations you plan for yourself.
Choose a location.
Location, location, location! Site location is probably the most important factor in determining your shop’s success. Some industry experts believe that a strip mall, industrial location or business complex are the best areas. Almost any area with a high degree of visibility and a fair amount of traffic will do. Pick a location that is easy for your potential clients to reach, that’s safe, and has adequate parking. Also, don’t underestimate the value of storefront windows to show off your engraved products, trophies, and awards.
There are things you will need to consider when making a retail location selection:
- Anticipated sales volume. Will I have the capacity I need for growth?
- Will the location support my business?
- Restrictive ordinances, noise, parking, signageordinances, etc.
- Can my business support a retail lease payment?
- Terms of the lease. Signing for too many years may limit your growth opportunities later.
A home-based business may be an excellent way to get started. This can be a great environment to learn about your new hardware specifically and the engraving business in general. You can also start to build a client base and let your initial advertising do its work. A spare room, garage or basement workshop can be the answer. As long as your home can accept a little more excitement (and mess), you’re probably okay with this kind of decision. If your plans are to work out of the home, remember these three important home-based-business rules:
- Can you successfully separate your business self from your home self?
- Does your neighborhood have zoning regulations that may forbid you from operating a home-based business?
- Can you set up an adequate operation to create an image that will give you the professional appearance you need in order to be successful?
Regardless of your decision, home-based or retail, you will need to plan the space wisely, especially if you want to grow. Start with a simple, easily executed plan, since you can always move to a retail location later.
Create a marketing plan. How will you reach your potential customers?
People do not generally seek out engraving unless they have a need. Since engraving services are not usually an impulse purchase, you will need to do some proactive work to promote your products and services.
Listed are some ideas to help you get started in promoting your business from within:
- Wall/Window Display
- Sample Boards
- Work Binder
- Engraved “Sayings”
- Sample Logos
- Offer Specials
- Customer Testimonials
Promoting your business can be a challenge if you have a limited budget but it’s not impossible. There are traditional methods such as advertising in the Yellow Pages, neighborhood newspapers, and direct mail pieces and flyers. Since the customer’s need for engraving is usually driven by a specific event or need, mass direct mailings may not be your best option, unless you can target a very specific audience or address some special need. Developing a prospect list and sending direct mail pieces targeting schools with a special on trophies, for example, may lead to some inquiries.
Often-overlooked ideas that can give your business a boost at a very reasonable expense may include the following:
- Community Involvement
- Team Sponsorship
- Gift Certificates/Coupons
- Business Card Drop
- Business Cards
- Ad Specialty Items
- Cooperative Advertising
You may want to investigate advertising along with other local area businesses. It can be very inexpensive to have your company name printed on pizza boxes, bowling score sheets and restaurant place mats. If your shop is one of several businesses in a small shopping plaza, consider getting together with your neighbors to print a flyer listing all of your businesses. If the community is small, these are very cost-effective ways of keeping your name in front of potential customers. This is especially true if you have competition in the area.
The Internet and email correspondence has become an integral part of many businesses, our homes and our everyday lives. Your business’s website is your window to the world. Websites don’t have to be technical in nature, although they do allow the flexibility of online ordering (should you decide to grow your business in that direction). Simply putting your name and contact information will give your customers a good idea of the markets you serve and the products you offer. Establishing an email address will enable your customers to communicate with you quickly and efficiently, send digital photographs, logos, etc.
Promoting your business is your responsibility. Simply waiting for the phone to ring is detrimental. Sure, a phone listing will help you get inquires, but is that really the best way to grow your business? Many methods of advertising and promotion are inexpensive and easily accomplished, although you don’t want to try to do them all at once.
Obtain help in developing legal, accounting and insurance plans. Don’t let the costs of professional services scare you away. Business insurance and legal or accounting advice can be important in the early stages of your business, especially if you experience substantial growth.
Plan out a computer strategy. This applies to computerized engraving software as well as accounting and/or business management software. Do your homework. A great deal of information can be obtained at industry trade shows, seminars and workshops. Live demonstrations will give you the opportunity to “test drive,” as opposed to buying a piece of expensive equipment or software sight-unseen.
Compose a cover letter that ties all the preceding steps together and summarizes your plans and needs, and approach a lender.