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Develop a pricing strategy

Develop a pricing strategy

Pricing is a crucial element of business. Find out what you need to consider when you price your products and services, types of pricing strategies, legislation obligations, what your price should include, and where to conduct research.

What is pricing?

Pricing is the process you use to set the price of your product or service. Pricing your products and services can be difficult to determine. If you set your prices too high, your customers may find your products too expensive; however, you can also affect your profits if you set your prices too low.

The following steps can help you through the process of pricing your products.

Before you calculate your price, it’s useful to calculate how much it costs to produce or deliver your product or service. When coming to a figure, always consider the cost of producing your product or service as well as your overheads. Don’t forget to also factor in The standard rate of Value Added Tax (VAT) in Cambodia is 10%. However, 0% VAT rate applies to support industries who supply certain goods and services to exporters. and other relevant taxes in your costing.

When you’re pricing your products or services you need to remember to include:

  • manufacturing cost
  • market place
  • competition
  • market condition
  • brand
  • quality of product

Once you know the true cost of your product or service you can then start analysing other influences and set your objectives and strategies.

A key consideration when you develop your pricing strategy is to understand your objectives when you price your products or services. One objective of pricing is to make a profit on your products or services, but there are many other pricing objectives that can affect your pricing decisions including:

  • position in the market
  • competitors’ positioning
  • ability to supply to or increase demand

Positioning

Positioning can help you establish your products or services in the market. For example, your business might sell high-end products, try to compete on price, or get into the budget level market. Price can indicate a level of quality so it’s important that the price of your products or services complement your overall brand.

Remaining competitive

For many businesses, being price-competitive is important, whether as a price leader or responding to the competition. When setting prices it’s always important to anticipate what your competition will do in response to your prices and ensure that you factor it into your strategy.

Increasing demand

Using price to increase demand in new or existing products or services can be a good objective for establishing customers or boosting lagging sales. When multiple products or services are involved, it’s a good idea to be aware of how the prices complement each other.

It’s important to keep your business and marketing objectives in mind when developing your pricing objectives to ensure they’re complementary to one another. By establishing your pricing objectives early, your choice of strategy may be easier to determine.

There are a number of pricing strategies you can employ when setting your price, including strategies based on:

  • costs
  • competition
  • perceived value
  • product

When choosing your pricing strategy, it’s also important to keep your overall marketing strategy in mind to ensure your strategies complement one another.

Cost-based pricing strategies

  • Cost-plus pricing: a strategy that adds a small margin or mark-up to the costs of producing and distributing the product or service. Care should be taken when calculating your price to ensure that all relevant costs such as cost of goods sold, fixed costs including Goods and Services Tax (GST) and other taxes are factored in. If your calculations are accurate this strategy can keep your price competitive while ensuring that you still make a profit.
  • Charge per hour: this strategy is often used by service-based businesses and independent contractors. The ‘per hour’ method calculates all the relevant costs of a business at an hourly rate. When using this method it’s important to factor in all your business costs and not overlook taxes, a wage for yourself, superannuation and leave entitlements.

Competition-based pricing strategies

  • Going rate pricing: this strategy is a safe way for small businesses to remain competitive without eating into profits. The strategy means you price your products and services close to the market price leader.

Value-based pricing strategies

There’s a number of value-based pricing strategies you can use including:

  • Value pricing: this strategy is based on what customers think a product or service is worth, rather than actual costs. The value is determined through market testing and a price is set based on this value. For example, sometimes customers will pay more if it saves them a lot of time. The price reflects this saving.
  • Premium pricing: this strategy reflects the prestige, luxury or exclusive value of the products or services you provide. Typically, at a premium price customers have high expectations of quality, performance and service.

Product-based pricing strategies

There’s a number of product-based pricing strategies you can use including:

  • Penetration pricing: this strategy provides you the opportunity to set a low initial price on a new product or service to gain high sales or market share. Once this point is reached, the prices are increased to normal pricing levels.
  • Skimming pricing: this strategy sets a high initial price which aims to excite audiences who desire products or services that are in high demand and are highly valued. Once the required profits are made, the price is then lowered for a wider market.
  • Loss leader pricing: this strategy aims to attract customers by offering a product or service at below cost. The strategy hopes that customers will also purchase other products or services with a higher profit margin.

Research can help you find the optimum price for your products. Generally, the optimum price is one that your customers are willing to pay, without it affecting your profits. This isn’t a one-off activity, you must monitor your key pricing influences regularly as part of your overall market research to ensure your prices stay competitive and you still meet your customers’ expectations.

Market testing

To help you determine how much your customers are willing to pay for your product or service you should perform some form of market testing. As a start, research your customer’s purchasing behaviour such as:

  • their current and anticipated demand for this type of product or service
  • what they pay for similar products or services
  • the quantity likely to be purchased
  • additional features they value

With this customer information in mind, you can then develop a price comparison offering a number of different product or service options for testing to help you determine a price range that is acceptable.

Competitors

You should have already determined who your direct competitors are and how your business compares to them when you developed your marketing plan. This information can be useful to help you determine your price point.

If you decide to use your competitors’ prices as a guide, be careful that it doesn’t dictate your prices too much, as it can seriously undervalue your product or service and drive down your profits.

When you compare your business to competitors, it’s also important to ensure you look at the business as a whole and compare on other value-based traits (such as special features, quality and customer service) as well as price. 

Influences

Pricing influences are external factors that can impact the price of products. Four influences that you may encounter include:

  • price sensitivity
  • level of demand
  • level of competition
  • government regulation

Price sensitivity

Price sensitivity refers to price fluctuations as customer demand increases and decreases. For example, commodity goods such as petrol have high price sensitivity. The difference of a few cents in price can impact a customer’s behaviour.

Some markets are more sensitive to price increases than others. Price sensitivity can change over time based on a number of factors including changes in the economic environment, competition or demand. Factors other than price, such as quality, service, and uniqueness, can also influence price sensitivity.

Level of demand

Product and service demand can influence your prices. If there is high demand, it is likely you can increase your price. Price can also influence demand. For example, if the price lowers, then demand can temporarily increase.

Level of competition

Competition can also influence your product’s or service’s price. In general, the less competition you have, the more demand there is for your product. If a new competitor enters the market, the competitor can affect your price.

Government regulations

Government regulation can influence your pricing decision, as additional fees or levies may increase the sale price of your product or service.

Discounts can affect your bottom line. While you may quickly sell and remove stock from your supply, you also need to understand how discounts affect the rest of your business.

Your business can benefit from offering a discount. These benefits can include that you:

  • attract new customers
  • sell unwanted stock
  • entice customers to return

There are different types of discounts. These include:

  • special offers or pricing deals
  • packages or bundles
  • quantity discounts
  • value-add offers
  • seasonal or periodic discounts

If you intend to offer discounts, you should develop a plan specifically for that sale.

Tools and software to market your business

Tools and software to market your business

Learn about the digital tools and software available that can support your online marketing goals.

Marketing tools and platforms can help you conduct your online promotion and retailing. By streamlining how you deliver targeted messages to your customer, it can help you achieve your business goals.

These tools and platforms can help you:

  • retain customers
  • keep customers and clients up to date
  • track your customers’ purchasing behaviours
  • personalise messages to your customers.

The type of platform and tool you use will depend on what you want to achieve.

Email marketing systems are platforms that can help you send and schedule emails to you customers. You can use them to send emails advertising your products or services or to keep your customers informed of company updates and other news.

Use an email marketing system to help you:

  • stay connected to your customers
  • target email messages to specific groups of demographics of your customer base
  • measure the success of your email campaigns with inbuilt analytics.

Marketing automation software platforms can help your marketing team be more efficient. They can allow you to market through multiple channels at the same time and automate repetitive tasks.

You can send out and track all your marketing messages from the one platform. You can use them for:

  • email campaigns
  • social media
  • websites
  • text messages.

Through a marketing platform, you can automate your marketing message to send at a specific time on a specific platform. You can also use them to create a more targeted experience for your customers, such as sending out messages to customers on their birthday.

By having all your platform data and information in the one place, you can be more effective when speaking to your customer and maintaining your brand.

A social media management system allows you to manage all your social media platforms from the one place. It will help you maintain consistency when speaking to your audience on each channel.

You may also be able to schedule social media posts ahead of time and then analyse the effectiveness of your posts. You can use both these features to help you better plan your social media communication.

Advertise your business

Advertise your business

Advertising is an effective way to promote or sell your product or service. Understand the benefits of different advertising types, what to include in your advertisements, and your legal obligations.

Advertising is a marketing activity that can help you to reach out to potential customers and encourage them to buy your products or services. 

An effective advertising campaign can help you to:

  • increase customer reach
  • build customer awareness of your business and brand
  • promote the benefits of your products or services
  • communicate information about your business
  • increase sales and demand
  • gain an advantage over your competitors.

For your advertising to be successful you need to set yourself apart from your competitors and grab your audience’s attention. Identify your target market and tailor your message to connect with those customers.

When creating your ad:

  • use a powerful headline
  • tailor your message to suit your target audience
  • talk about the benefits of your products or services
  • have a call-to-action for the audience to take
  • use exciting images and testimonials if relevant
  • always deliver on what you promise.

Examples of advertising media include:

  • digital channels (including websites and social media)
  • television
  • radio
  • print (for example, in specialist magazines read by your target audience)
  • cinema advertising
  • billboards and transit signs
  • door-to-door sales.

With a range of choices, finding the best advertising mix for your business can be challenging. The advertising you choose should depend on:

  • your business
  • your budget
  • the types of media your target audience accesses.

For example, social media may be a free or low-cost way to advertise, but is used differently across different age groups. Make sure your target audience accesses your advertising platform. You may benefit from using a mix of media.

Digital advertising

Digital advertising allows you to reach a larger target audience, all over the world, 24 hours a day. You can focus your efforts on your ideal buyer and build a community around your product or service. You can reach your customers and your customers can engage with you in a two-way format.

Some digital options include:

  • social media advertising
  • mobile app advertising
  • email marketing
  • online promotion through website banner ads, display ads, keywords and video.

With digital advertising, you can:

  • track your customers
  • analyse their buying behaviour
  • customise your message to their preferences.

Market your business

Market your business

Thinking about all your business activities can help you to position your business, and your products or services in the market. On this page you’ll learn how to use the 5 Ps of marketing to help build your business brand and target your customers’ needs.

Marketing and position

Marketing aims to build your brand and business. It can help you to reach your customers, attract new ones and increase your profit. But before you plan your marketing, you need to have a clear idea of your business’s position in the market.

Positioning your business

Positioning is your business niche or how you want your customers to think about your products or services. For example, is your business a budget choice for families? Or do you offer more high-end services?

Positioning helps you to be clear and focused in your marketing efforts. It shows what your business does, who you do it for and why you’re different from your competitors.

You can use key features such as your location, your experience or packaging, to position your business. For example, a home-based accountant might use their international experience to position themselves as an up-market service provider.

The 5 Ps of marketing

Once you have a clear idea of your positioning, you can use the 5Ps of marketing to reach your target market. Working your way through each of the Ps can help you identify areas of your business you can change or improve on – to meet your targeted customers’ needs.

Product refers to what you are offering as a whole. What exactly are you selling to your customers? This includes the value added features, branding and packaging as well as service and warranty terms.

For example, if you’re a jewellery maker who is looking to grow your business, you might think about giving your customers a free gift wrapping service as an incentive to buy from you.

Price refers to the way you set prices for your products or services. It generally includes all the parts that make up your overall cost, including the advertised price, any discounts, sales, credit terms or other payment arrangements or price matching services you offer.

Your pricing will also depend on your business’s position in the market. For example, if you advertise your business as a budget car rental service, your pricing should reflect that choice. If you’re looking to grow your business, consider if your pricing reflects your positioning.

Promotion refers to all the activities and methods you use to promote your business and products. This includes sales, public relations, direct marketing and advertising. For example, if you’re growing your sports management business, you might add sponsorships to your marketing mix to help promote your business.

Your promotional strategy will be part of your marketing plan.

Things to consider before promoting your business

Your marketing and business plans

Consider what you want to achieve with your advertising or promotional campaign? Does it align with your brand and your business goals and objectives?

Before you start any promotion, write down your goals and objectives. You’ll then be able to track and evaluate your success after the campaign. This will help you decide whether to take this approach or to trial different promotions in the future.

Your target customers

If you’ve been in business for a while, you should have a good understanding of who your target customers are. These are the people who you expect will buy most of your products or services. If you’re not sure who your target customers are, then have a look at who is currently buying your products and services. Look for ways to make sure your promotional activities are reaching them.

Where to advertise or promote

How do your customers normally find you? Through the internet, social media, word of mouth, flyer, ad in a publication, online, on radio or TV? Find out how your current customers find you, then target your advertisements and promotions in these areas.

Your budget

Advertising and promotion can be expensive. Pick options that will give you the best value for money, while still reaching your target customers. Remember, the cheapest option is not always the best. The best option will be whatever is most effective for your business. Some budget-friendly advertising options include flyers, posters, social media and newsletters.

Place refers to how you deliver your product or service to your customers. This might include the physical location (such as a shopfront, online or a distributor), your delivery methods and how you manage your stock levels. For example, you could choose to provide your product from a shopfront, over the internet or through a distributor.

If you’re looking to grow your business, you might consider changing or expanding the way you sell your products and services. For example, if you’re a homewares distributor, you might think about setting up a new store in a different location or offering franchises. Or you might consider setting up an online website to supply other businesses.

People refers to you, your staff and your customers. This covers customer service, as well as communication and training for your staff.

For example, if you’re thinking of expanding your business online, you’ll need to think about:

  • how your customers use the internet
  • how comfortable would they feel purchasing your goods online
  • whether they’d be willing to pay shipping costs for your products
  • if your staff have the skills to manage a website
  • if you need to provide further staff training

Examples of the 5 Ps

Here’s a couple of examples of the 5 Ps in action.

Family restaurant

Say you run a restaurant catering to families. To position your restaurant towards your target market, you might consider:

  • product – food catering to fussy eaters
  • price – affordable prices for families
  • promotion – advertisements in school newsletters
  • place – location and opening hours suited to busy, family lifestyles
  • people – staff that are friendly and accommodating to the needs of parents and children.

Develop your marketing plan

Develop your marketing plan

Writing a marketing plan can help you define your marketing strategy and identify the best activities and channels to market your products or services. Learn how to develop a marketing plan with our marketing plan template.

Having a marketing plan can help you to:

  • identify your target market and how your product or service can benefit it
  • identify how you might attract new customers
  • encourage your existing customers to continue purchasing your product or service
  • set goals and time frames for your marketing activities
  • map out a strategy to reach your target audience, including the messages, channels and tools you’ll use
  • evaluate your marketing activities
  • provide a marketing budget and see your return on investment.

Our marketing plan template helps you identify who your customers are, how you’ll meet their needs and what marketing tactics you might undertake.

Marketing plan template DOCX

Our template steps you through the process of developing a succession plan with links to extra information if you need it.

You may want to check our tips below before you start.

1. Analyse your market

Market research can help you to understand your strengths, weaknesses and the opportunities that you can take advantage of. Analysing your own business and your competition can help you identify where you’re positioned in the market.

It’s important to analyse your competition to identify their strengths and weaknesses. This can help you refine your marketing strategy and what’s unique about your business. 

A strengths, weaknesses, opportunities and threats (SWOT) analysis can help you determine where your business fits within the market and your unique selling point. Use it to help identify what your business is doing well and how you can improve.

Identifying and understanding your customers is an essential part of your marketing plan. Not everyone is your potential buyer, so it’s important to have a clear understanding of your target market early on.

2. Set your goals and objectives

Once you’re clear about your business and its positioning, you can start thinking about what you want to achieve. Think about your main business goals, whether it’s the size of your business, expansion plans or desired sales. Set specific, measurable, achievable, relevant and time bound (SMART) goals to increase your chances of success in achieving them.

3. Outline your marketing strategies

Once you’ve set some goals, consider what marketing activity, process or price will help you achieve them.

Try and choose marketing activities that suit your business and your customers. For example, if you want to target young adults, newspaper advertising may not be as effective as a social media campaign.

Choosing multiple activities that complement each other is a good way to help you get your message across. For example, if you’re trying to establish a new product in the market, you may choose to advertise on the local radio, as well as setting up social media channels and introducing a low-cost pricing strategy for first-time buyers. When used together, these strategies complement each other and help you reach a broader market.

4. Set your marketing budget

Knowing how much you have to spend on marketing and how to spend it is critical to the success of your business. A marketing budget will ensure you accurately calculate your marketing campaign or advertising.

When developing your marketing budget, make sure you’re only spending money on the activities that contribute to your current marketing goals. Advertising and promotion can be expensive. Make sure to pick options that will give you the best value while still reaching your target customers.

5. Keep your marketing plan up-to-date

It’s important to evaluate your marketing activities. Analysing your results and being aware of new marketing trends is important to keeping your marketing plan up-to-date and reaching your business goals. You should tweak and change your plan as your business and market grow and change.

Research your market

Research your market

Market research is a valuable tool for all businesses. It can help you to understand your market, including potential customers and their needs. Learn how to research your market, including goods and services, customers and your competitors.

Why research your market

Market research helps you to understand your customers and their needs, as well as what your competitors are doing.

This understanding can help you to better focus your marketing efforts, make informed decisions about your business and make the most of opportunities. It’s important to make sure market research is part of your ongoing business plan and daily operations.

Read our steps for researching your market to get started.

 

Your market research should cover your:

  • customers
  • competitors
  • product or services
  • suppliers
  • business location and local area
  • industry and market trends.

There are both primary and secondary methods of research you can use to conduct your market research.

  • Primary research involves gathering information yourself first-hand.
  • Secondary research uses information and data that has already been collected and analysed by others.

Before you embark on gathering first-hand information about your market, you can use research that has already been done. For example, look for market reports, government statistics, and trade and industry association publications.

Sources of government statistics and data

Government statistics by topic:

  • Food statistics
  • Health and safety information
  • Immigration statistics
  • Labour market information
  • Quota management and statistics
  • Taxation statistics
  • Tourism research
  • Tourism statistics
  • Trade and investment data
  • Transport statistics
  •  

Testing your business idea with customers can give you an idea of how successful it might be. You can do this by talking to people about your idea and seeking their feedback on your product or service. This could be through direct contact, surveys, focus groups or social media polls.

You may also consider a test run or pilot test of your product or service with a small number of clients to fine tune your idea. This will help work out if your idea is viable, find any problems, develop a price for your product or service, and see how quickly your business might grow. This may help you identify where your products or services fit in the market and how they differ from your competitors.

You can also work out your product or service’s:

  • positioning – whether your products or services are high-end, competitive or a low-cost alternative to the products or services offered by your competitors. Read more on positioning your business.
  • anticipated demand – the amount of products or services your customers are likely to purchase from you. For example, how much will an individual customer buy in 6 months or 12 months?

Ways to collect customer data include emails, online surveys, interviews, and even talking directly to your customers.

You can discover:

  • what their needs are
  • what they’re willing to pay for different products
  • the anticipated demand for your products.

Finding out how your customers think and behave (including their likes and dislikes) can also help you better target your marketing activities.

Using existing customer data

  • customer relationship management (CRM) database
  • customer loyalty or reward program information
  • point of sale (POS) system and sales records
  • inventory management system
  • records of customer complaints, feedback or suggestions
  • reports on customer service benchmarks and targets
  • website statistics and traffic.

Example of using customer research

If your research shows that your customers are looking for an affordable, family-friendly restaurant, your business could cater to that need. Marketing is about working out what problems your business or product can help solve.

You can collect data on your competitors through:

  • observing their advertisements and sales
  • observing businesses in your industry and area through trade magazines, general advertising or site visits
  • networking
  • the internet, including websites, blogs and other social media.

You can use this competitor data in your strengths, weaknesses, opportunities, threats (SWOT) analysis when you develop your marketing plan.

Analysing your competitors can also help you understand where your business or products fit in the marketplace.

Questions to ask when researching your competitors

Consider the following:

  • Who are your competitors?
  • What do they offer their customers?
  • Where are they located?
  • What marketing strategies do they use?
  • How do they communicate with their customers?
  • Do they have an online or social media presence?

Identify your target market

Identify your target market

Identifying and understanding your customers is an essential part of your business and marketing plan. Not everyone is your potential buyer, so it’s important to have a clear understanding of your target market early on. Learn how to analyse your market and define your customer segments.

A target market is a group of potential customers that you identify to sell products or services to. Each group can be divided into smaller segments. Segments are typically grouped by age, location, income and lifestyle. Once you’ve defined your target audience, you’ll find it easier to determine where and how to market your business.

For your business to thrive you need to know who your customer is. Knowing your customers will help you to target customers who are willing to pay for your product or service. This is a much more effective and affordable way to reach your customers and generate business. You’ll be wasting resources if you aim too broadly, or find out too late that there aren’t enough customers for your product or service.

By understanding your market you can promote your product or service more effectively to the right customer group. You will know:

  • where they are
  • which media channels they use
  • what their buying habits are
  • how to tailor your marketing to motivate them to buy your product or service.

To define your target market effectively you’ll need to do some research. Gathering statistics and other market research data helps you to understand your potential customers and their needs and make better marketing decisions.

Find out how to research your market.

 
RESEARCH YOUR MARKET

Work out if your market is large enough and accessible. Then segment the market into groups of buyers with similar preferences and buying habits. For example, the athletic shoe industry is broken up into several segmented groups – first by gender, then by the activity or sport.

Once you’ve identified your market segments, you can define your ideal customer for each segment.

To define your target customers, ask yourself the following questions:

Who your customers are

  • Are your target customers male or female?
  • How old are they?
  • Where do they live?
  • What is their marital status?
  • Do they have children?
  • How old are their children?
  • What is their education level?
  • What do they do for a living?
  • What is their average income?

Customer interests and buying habits

  • What motivates a customer to make a purchase?
  • What are your customers’ common interests?
  • Who makes the buying decisions?
  • How often do they purchase a product?
  • Do they shop online or prefer to see their product before they buy?
  • How long does it take them to make a buying decision?
  • What form of media does your target rely on for information?
  • How far do they travel to make a purchase?
  • What other products do they buy?

Then target your marketing efforts to explain how your product and service will fit into their lifestyle and how it best meets their needs.

Business marketing

Business marketing

There are many definitions of marketing. Broadly, it involves activities that help to build your brand and business. It’s about identifying and understanding your customers, and developing products and services that meet their needs. Marketing requires careful planning and research – but investing time and money now will pay off in the long term.

Marketing is more than just advertising and logos, it can be across many areas of your business, including:

  • how your customers are greeted on the phone
  • your customer service procedures
  • what your staff wear
  • your email signature.

Good marketing tells a story about your business and gives your customers a reason to purchase from you instead of your competitors. It helps you to look at everything in your business that could affect how your customers identify you.

Writing a marketing plan can help you define certain aspects of your business and focus on your priorities.

Learn how to write a marketing plan.

 
DEVELOP YOUR MARKETING PLAN

When marketing your business, products or services, make sure you’re aware of any regulations or legal requirements including the ones we’ve listed below.

  • Advertising your business
  • Running competitions, lotteries or promotions
  • Direct marketing
  • Telemarketing
  • Privacy
  • Using intellectual property
  • Trade mark laws
  • International regulations

How to develop your business plan

Whether you’ve just started out or been running your business for years, business planning can be the key to your success. Having a business plan:

  • can help you prioritise – it gives your business direction, defines your objectives, maps out strategies to achieve your goals and helps you to manage possible bumps in the road
  • gives you control over your business – the planning process helps you learn about the different forces and factors that may affect your success. If you’re already in business, it helps you to step back and look at what’s working and what you can improve on
  • is vital to help you get finance – if you’re seeking finance for your business, you’ll need to show banks and investors why they should invest in your business

Before you write your business plan

Before writing your business plan, honestly evaluate yourself and decide if your business idea has a good chance of success. Analysis can help you anticipate any challenges you may face and help you overcome them. It can also help you set the goals for your business in your business plan.

Things to consider before writing your business plan:

  • Analyse your business idea – Is your business idea viable? Is there a market for your proposed product or service? Is your business idea worth investing your time and money into?
  • Analyse yourself – Are you ready to venture into business? Do you have what it takes to be an entrepreneur? Do you have the skills needed to run your business successfully? Are you ready to put in the hard work?

Does your business plan have more than one purpose? Will you use it internally, or will you involve external parties, such as an investor or bank?

Deciding what your purpose is, can help you develop your plan for the right audience. If the plan has been developed for third parties, you will need to determine what they’ll be most interested in. Don’t assume they’re just interested in the financial part of your business. They’ll be looking at the whole package.

You’ll need to make quite a few decisions about your business including its structure, marketing strategies and finances before you can complete your plan. Research can help you develop goals and targets, as well as a better understanding of where your business should be heading. It’s important to make sure your research is up-to-date and accurate before presenting to lenders or investors as market conditions can change over time.

Lenders and investors need to know your finances are in order and your business is in a strong financial position. Both lenders and investors will want to know how much money you currently have, how much money you need and how much you expect to make in the near future. While a bit of extra funding will help you ensure you’re covered for unexpected costs, be realistic and avoid asking for more than you need.

Summarise the main points of your business plan using as few words as possible. You want to get to the point but not overlook important facts. This is also your opportunity to sell yourself, but don’t overdo it. The summary should include details about your business, market, goals, current financial position, how much finance you’re seeking and what it will achieve.

Don’t leave your business plan to the last minute. It takes time, research and careful preparation to develop an impressive plan that can sway investors and lenders.

If you aren’t confident in completing the plan yourself, you can enlist the help of a professional to look through your plan and provide advice.

There are a number of government services available to help you plan, start or grow your business. These services can provide general advice, workshops, seminars and networking events, and can even match you with a mentor or business coach.

Review your plan regularly. As your business changes many of the strategies in your plan will need to change to ensure your business is still heading in the right direction. Having your plan up to date can keep you focused on where you are heading.

It’s a good idea to keep a record of each version of your business plan as they may contain some important historical information as well as your intellectual property.

Having an understanding with third parties when distributing a plan could be enough protection for some businesses. However, others who have innovative business practices or products or services may wish for each person to sign a confidentiality agreement to protect their innovations.

It may also be a good idea to include some words in your plan asking the reader not to disclose the details of your plan.

Business plan template

Our business plan template and guide provides a roadmap for your business’s future. It can help you start your business and manage your future goals.

Business Plan Template

Business Plan Guide

Preparing yourself for business

Whether you’re about to start a new business, buy an established business or turn your hobby into a business, you’ll need to prepare yourself for any challenges you may face.

Before you start to work in your new venture, we recommend you take some time to consider the following key areas to help develop your business.

The very first step of the process is to do some research and analysis to determine whether your business idea has potential and if you’re the best person to build it.

Some questions to consider include:

  • Is there a need for your product or service?
  • Is there a desire for your product or service?
  • Who will buy the product or service?
  • How hard will it be to develop your idea?
  • Is your idea financially viable?
  • How will you protect your idea?
  • Who are your competitors?

Consider yourself

Operating a business is not just about working for yourself. It also means having the necessary skills to grow and succeed.

It’s important to consider whether you really understand what’s involved and whether you’re suited to running a business. Ask yourself:

  • Why do you want to start a business?
  • Do you have the skills to set-up and run your business or will you need to outsource?
  • What are your business and personal goals?
  • What income do you need to generate for your business to be successful?
  • Do you have the financial capacity and time to start and run your business?

Conduct market research to help you understand your customers, your competition and your market. Research your customer’s habits, needs and where they’re located. Analyze who your competitors are, where they’re located and what they do better than you.

Through this research you’ll understand:

  • who your customers are, their needs and buying patterns
  • who your competitors are, what they sell and for what price
  • how you can improve your business, product or service to become more competitive

When you conduct your research, you may want to consider:

  • What your customer demands and expectations are?
  • Where your customers are located?
  • How and where they receive marketing?
  • Who your competitors are?
  • What are they selling and for what price?
  • How they market their business?

An essential part of starting your business is developing your business plan. This will include the operational, financial and marketing aspects of your business. This is important if you are looking for a loan, applying for a business grant or pitching to investors. Lenders and investors want to see the true potential of your business idea. 

The plan can also help you identify your goals and develop strategies for achieving them.

Use our business planning template and guide to help you.

Remember a business plan is a living document. You should review it regularly to remind yourself of your goals and modify it when plans change.

While setting up your business can be an exciting time you should also think about how you can protect your future business in times of crisis or change. Create emergency management and succession plan, to prepare and protect yourself against potential risks.

Consider what you would do:

  • during a natural disaster
  • if you could no longer run your business
  • if you retire
  • during technological disruption

Now that you have a more of an understanding of your business, your product and your customers, you need to register your business and decide on your business structure.

Pick a business structure that best suits your needs. Your business structure refers to the way you will operate your business. You can also change your business structure as your business grows.

Types of business structures include:

  • Sole trader: an individual trading on their own.
  • Partnership: a group or association of people running a business together and distribute income or losses between themselves.
  • Company: a legal entity run by its directors and owned by shareholders.
  • Trust: an entity that holds property or income for the benefit of others.

Your business name is the name under which you operate your business.

To find out if your business name is available search the business names register on the Ministry of Commence (MoC) website.

If your name isn’t available, try altering your choice or keep searching until you find a suitable name that is available.

Your domain name is your website address on the internet. Your domain gives your business an online identity for your customers.

When you pick a website name, remember to pick a name that:

  • represents your business
  • is easy to remember, pronounce and spell
  • is 3 syllables or less

If you want to buy a .com.kh or .org.kh web address you will need to have a company name or a business number (TIN). 

Also, you can use our Qbiz Solution’s service for digital marketing such as:

  • Domain
  • Hosting
  • Mail Service 
  • Website Design
  • Business Enterprise Centres, Association and our Qbiz Solution’s adviser who provide low-cost advice and support.
  • Advisory services to help you find local business advisers and professionals.
ABOUT US

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