Starting a new business venture can feel exciting, yet risky. It’s challenging to know if your venture plans will accurately reflect reality, so how can you create a plan that will take unknown factors into consideration? Keep reading to learn about important milestones for successful venture planning.

What is Venture Planning?

Venture planning helps entrepreneurs and business owners identify new business opportunities, develop a business concept, research their ideas, and analyze the resources and strategies needed to bring them to fruition.

Planning for a new venture is important because having a clear plan can help ensure that resources are used efficiently and that you can reach your goals effectively. It also allows for a better understanding of the resources needed to achieve the goals and helps identify potential risks and opportunities that could affect the venture’s success. Preparing will ensure that the venture is organized and structured properly, which can help maximize the chances of success.

Defining goals

The success of your venture will be defined by the goals you set at the beginning. These goals should be specific, measurable, attainable, relevant, and time-bound (SMART). Once the goals have been established, it is important to set milestones to measure progress and ensure that they are being met.

Milestones should be set for both short and long-term goals and should be achievable but challenging. It is crucial to set deadlines for each milestone, so you can complete the venture in a timely manner. Milestones should also be measurable so that it is easy to track progress and identify any areas that need to be addressed.

You’ll want to write down these milestones as a sequence of events and reflect on each one upon completion. Compare your results to your original specifications to see if you met the milestone effectively. If not, you can determine how to make adjustments with the next steps.

Milestones for Venture Planning

While every venture is unique, you can create milestones based on the steps listed below. These steps can help you refine your venture plan to be as effective as possible.

Concept and Product Testing

Before considering product development, you must determine whether your venture is worth pursuing. According to the Harvard Business Review, testing your product is the best place to start. During this stage, you will find out if a real need exists for this product. You may discover a different opportunity than your initial idea by testing your original concept and changing it if need be.

In this step, you will challenge your assumptions about target markets, product characteristics, pricing, and perception of need. As you test your concept and product, you can ask yourself these questions:

  • Does an opportunity exist with enough of an upside to take on the necessary costs and risks?
  • How has this test changed our assumptions about the venture, and in turn, changed our target market and product development objectives?

This stage offers a cost-effective way to avoid an expensive failure in the future. While it is a bit of a time and money investment, it could save you a massive amount of money in the future if you discover that there is no need in the market for your product.

Prototype Completion

When you complete the prototype, you can glean tons of information by analyzing the prototype development. If there were any roadblocks along the way, you can carefully examine the causes and the solutions. You may find many hidden opportunities by reflecting on the solutions to these problems.

During this step, ask yourself the following questions:

  • What assumptions were made about development costs and time? How have they changed?
  • How did those changes impact our timing and plans regarding new hires, marketing, plant construction, and other categories?
  • How do the changes affect financial needs and timing?
  • What have we discovered about materials, equipment availability, costs, and labor, and how does it affect our pricing?
  • Have our beliefs about our target market stayed the same? How has it changed and affected our plans?
  • Are our assumptions about competitors and competing products still valid?
  • Should we revise our investment requirements?
  • Are our projections about suppliers and service distributors still accurate?

Financing

One of the first steps in getting the necessary funds for a venture is to create a detailed budget outlining the expenses associated with the venture. This will help determine the amount of funds needed to cover the venture’s costs. Once the budget is created, it’s essential to identify the various financing options available. These options may include traditional loans from a bank, venture capital investments, crowdfunding, grants, and angel investors.

Traditional loans from a bank involve taking out a loan and paying interest on the loan. This can be a good option if the venture is expected to generate a steady income. Venture capital investments involve a venture capital firm investing in the project in exchange for equity. This option is best for companies with high growth potential. Grants are funds available from governments or other organizations that are given to a venture with no expectation of repayment. Another option is angel investors, which are individuals who invest in a venture in exchange for equity, and usually provide mentorship and guidance.

You can view this step as a way to learn about the venture’s financial expense and structure from the view of a competitive market. If you are having trouble getting the financing, you can see it as an opportunity to ask and reflect on why the plan was rejected.

Initial plant tests

You can use plant tests or pilot operations (for a service venture) to challenge your assumptions and gather information. From this testing period, you can learn more about:

  • Material costs
  • Processing costs
  • Investment prerequisites
  • Training and skills needed for production personnel
  • Processing specifications

You can improve performance and cost estimates from this data, which will be beneficial when you begin full-scale operations.

Market Testing

This stage may be the most challenging, but also the most informative. During this step, you should reflect on the following:

  • Have customers shown that they would buy this product? Why or why not?
  • Is it different and better than the competition?
  • Are the pricing estimates still accurate?
  • Should we modify estimates of achievable market share or target markets?
  • What impact does this data have on planning and pricing?

Starting Production

After you’ve made several adjustments and changes based on your extensive previous testing, it’s time to start production. When this begins, you will learn the actual costs of producing your product consistently and what it takes to meet the quality requirements. Avoid making delivery commitments to customers during this stage. Many entrepreneurs miscalculate production timing, making delivery promises, leading to extreme pressure to produce the product and poor quality and dissatisfied customers.

Bellwether Sale

In this stage, you want to achieve your first big sale to a significant account or distributor, which will likely give the venture some momentum. From this milestone, you can learn:

  • How your product compares with the real-world competition.
  • If your product is functional.
  • If you need to alter the original selling method.
  • Information on service requirements.
  • Data on quality controls and specifications.

In an ideal situation, this sale will be to a prospect that you’ve been in contact with during the entire development of this venture. You also might run into some new opportunities.

Start getting competitive

While you won’t know in advance how competitors will react to your venture, you can plan alternative responses to potential moves and learn more about your competition. You can be prepared for your competitor to create a rival product or service, planning out if you’ll need to expand your product offerings or alter your prices.

Reflection and Redirection

As you progress through these milestones, you may discover that you need to make changes and alterations – whether it’s to the product itself or with factors like your target market, pricing, or budget. This process requires constant reflection and fine-tuning, allowing you to understand the difference between what you are offering and what people truly need.

When you decide to redesign or redirect, you need to reexamine your original assumptions, including market size, segments, investment requirements, financing, and pricing.

Price Adjustments

Until you launch your product into a competitive market, it’s challenging to know your product’s or service’s real value. You may need to revise your price based on factors such as technology, competition, and costs once you are consistently selling and producing your product. You can ask yourself the following questions during this stage:

  • Should this price change be permanent or temporary?
  • If this change is permanent, is the business viable?
  • What can we do to restructure costs so that the business stays viable?
  • Can the price change be isolated to a specific market segment?

While you progress through each of the milestones listed above, it’s crucial to use them for thinking, reflecting, and making decisions. This process is all about learning and growing. Although many folks want to stay true to their original plan, changing it as you go has proven to be the most successful journey.

I do invest from $100k to $5m in various ventures from time to time. At this point, almost all of them are doing exceedingly well and fetching solid returns. The whole above gamut is a great plus for me to internally evaluate how a particular venture would prove to be fruitful for the future, and which one would be more likely to go bust. I personally diligently write what I folloe, and like everything else in my life, it is perfect, yet changing.

Related Reading: How a Lean Startup Approach Changes Everything

Aniket Warty

Aniket Warty

Adventure Capitalist. I need no sanction for my life, permission for my freedom, or excuse for my wealth: I am the sanction, the warrant, and the reason. The creation of wealth is merely an extension of my innate freedom to produce.
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