Planning ahead

Business planning involves developing a comprehensive strategy to operate and grow a venture. This plan outlines the overall goals, target audience, revenue sources, and business operational structure. In the eSports context, the primary focus is creating a sustainable and profitable venture within the industry.

A business plan is all part of the experience. The business plan is what sets the business in motion.

Let us look at the components of the eSports industry's business plan.

Idea generation

Forming innovative ideas and concepts is integral to a successful business plan. What differentiates you from others? Brainstorm what business venture you would like to take and choose one to complete the rest of the business plan for.

Mission statement

Mission statements should align with your business goals and what you want to gain. When creating a mission statement, ensure you have done so ethically.

Ethical considerations

Acting ethically in a business context involves conducting oneself and the business operations in a manner that aligns with moral principles and values, respects laws and regulations, and considers the well-being of shareholders.

Each business will have ethical considerations. These include:

• acting reasonably
• not discriminating based on:
  • age
  • nationality
  • gender
  • relationship status
  • race
  • religion
  • sexual preference, etc.
• maintaining confidentiality
• compliance with laws and regulations
• demonstrating honesty and integrity, etc.

If a business finds itself in unethical circumstances (especially in the eSports industry), it will likely find endorsement and sponsorship challenging. These shareholders are not likely to invest any money in an organisation with an unethical reputation.
This will have an impact on them as well as the organisation in question. Acting ethically promotes trust and goodwill and enhances the long-term sustainability and reputation of the business.

SWOT analysis

Strength, Weakness, Opportunities, and Threats. SWOT analysis is a process to analyse the competition. Entrepreneurs, product designers, front-end developers and many more use this simple yet effective process to build a more robust new product that has the potential to stand out from the competition. This is an opportunity to analyse everything! Material, retail price, cost of production, durability, features, variety, colour, appearance, etc.

After a SWOT analysis, you should be able to identify trends and new ideas that you can take back to the drawing board. Remember, you do not have to use every new idea; this allows new ideas to be thought of and really lets the creative juices flow.

Market research and resources

Market research

Market research systematically collects and analyses information related to a specific market or industry. In this instance, we are looking at the eSports industry. Therefore, the research will be conducted within this context. This process helps businesses understand customer preferences, industry trends, and competitive landscapes to make informed decisions. Types of market research may include the following:

• Player Demographics: Gathering data on the age, gender, and geographical location of eSports players to tailor game development or marketing strategies accordingly.
• Viewership Trends: Analysing viewership statistics for popular eSports events to determine the best platforms for advertising or sponsorship.
• Gaming Preferences: Surveying gamers to identify their favourite game genres or platforms, aiding game publishers in creating content that resonates with the audience.

Market resources

Market Resources refer to the tools, data, and assets that businesses utilise to conduct market research effectively and make informed decisions. Types of market resources within the eSports industry may include:

Target markets

• Data analytics software
• Streaming platforms
• Gaming forums and communities.
• A target market refers to a specific group of customers or consumers that a company aims to reach and serve with its products or services. This group shares common characteristics and interests, making them more likely to be interested in and purchase what the business offers. The following are some examples of a target market within the eSports industry.
  • Casual gamers
  • Competitive gamers
  • eSports spectators
  • Sponsors and advertisers
  • Game developers and publishers.

  Sales forecast

  A sales forecast is a prediction or estimate of the future sales revenue a company expects to generate over a specific period, typically based on historical data, market research, and current trends. It serves as a valuable tool for business planning, budgeting, and decision-making.

  Job roles and responsibilities

  Job roles and responsibilities include details about the organisational hierarchy, specific tasks, duties, and functions assigned to individuals within an organisation. These roles are designed to ensure the efficient and effective operation of the business, with each employee contributing their expertise and efforts toward achieving the company's goals and objectives. Job roles and responsibilities vary widely across different positions and departments whether in gaming, management, marketing, or production, all aimed at collectively driving the success of the business.

  Advertising

  Advertising refers to the strategic communication and promotion of products, services, or brands to a target audience through various media channels. Its primary goal is to raise awareness, generate interest, and persuade potential customers to take a specific action, such as making a purchase or engaging with the advertised content.

  Feasibility

  Feasibility refers to assessing whether a proposed business idea, project, or strategy is viable and practical. It involves evaluating factors such as market demand, financial resources, technical capabilities, and potential risks to determine whether the concept is achievable and likely successful.

  Pricing strategy

  How do you plan on pricing for the business when selling goods. Additional research may need to be carried out here to find out what other businesses are selling and for how much. You will need to compete with others, therefore your pricing must attract attention without losing profit for the business.

  Budget

  A budget is a financial plan that outlines expected revenues and expenses for a specific period. It serves as a valuable tool for managing and allocating resources, setting financial goals, and ensuring that spending aligns with the company's strategic objectives. Budgets include, estimates of income, expenses, and projected profits over a specific timeframe. Plans for securing initial and ongoing funding, which could come from investors, sponsorships, or crowdfunding.

Knowledge Check Activity

There are hundreds of roles in a business. When you work for a business and have the aspiration and goals to “climb up the ladder” some businesses welcome this with open arms. Companies love to take on employees who are thriving to develop their career.

The following graphic visually represents the common business hierarchy.

If you don’t have the qualification to be a manager or higher when you first apply for the job, you can start as a staff employee and work your way up. Dedication, self-improvement, and willingness to learn are traits to have or build to reach the goal of management or higher.

Marketing planning in a business involves developing a strategic approach to promoting the business, building its brand, and attracting a dedicated audience. In the eSports context, this plan must outline the tactics and channels to reach potential customers and fans, fostering engagement and loyalty within the eSports ecosystem. If you were creating a marketing plan outside of the eSports realm, your marketing plan needs to fit the ecosystem of the chosen field.

When planning for marketing, you may wish to consider the following. Click on each of the following headings to learn more.

Statistics is a field of applied mathematics that involves collecting, describing, analysing, and dividing findings from quantitative data.

Analysing statistics is a skill you get better at with time. At a glance, you may be able to identify trends or outliers based on your findings.

Statistics are commonly used to persuade an audience. If you heard that sales were up 23%, you would think, “Great, I am in!” However, sometimes they can be used to deceive. As an entrepreneur, it is very beneficial to be able to use stats effectively, particularly for the business plan. Just remember, you must be able to recognise the difference between statistics that are useful and those that may not be telling the full story.

Data analysis also plays a pivotal role on business ventures. It is important to know this skill a s a business owner to make smart business decisions. Indeed (2023) says, “The data analysis process involves transforming numerical values into accessible insights about different business areas. By learning how to gather and assess data properly, you can improve your critical thinking, strategic thinking, and decision-making skills in the workplace.”

(Indeed Editorial Team, 2023)

Types of data

Data analysis is used to make decision according to market situations and market results for specific products or services. When it comes to making an objective decision (a decision based in objective data results) we must take into consideration two key aspects on how the data was recollected. There are two types of data gathering: Quantitative data and Qualitative data.

Quantitative data

 Works with numbers and is measurable. Quantitative data tells us how many, how much or how often in calculations. It is generally solid, based on fact and collected using statistical analysis. It involves numerical information that can be measured and expressed in amounts. A few examples could be:

•  Sales figures
• Website traffic
• Customer demographics 
• Measurable survey answers.

Qualitative data

Qualitative data is related to language, it focuses on interpretations and is descriptive. Qualitative data is subjective and is gathered with interviews and observations. It involves non-numerical information that provides insights into attitudes, opinions and behaviours. It is typically unstructured and subjective. A few examples could be:

• Customer reviews
• Open survey responses
• Focus groups
• Interviews.

(Source: The Fullstory Education Team, 2021)

Steps to analysing data

When analysing data, seven steps can be taken. Let’s take a look at these.

Step 1. Establish a goal

To begin with you will need to determine why you are analysing data, and what is the purpose/objective. Think about the questions or concerns and then establish the goal. For example, are you looking for trends, revenue success or expanding your clientele, finding a sponsorship etc.

Step 2: Determine the type of data analytics to use

Identify the type of data that can answer your questions. A descriptive analysis could be useful if a simple overview is all you want. That is, data you may already have access to, for example, data from a previous project. If these numbers are still relevant, you may want to consider using this information.

Step 3: Determine a plan to produce the data

Collecting data is a timely and sometimes costly project to undertake. Before you start, you must ensure you have enough finance and resources to cover the project. Ensure you have an idea of what type of information you are trying to gather and plan how you will achieve this before you carry it out to ensure you can do so.

Step 4: Collect the data

Set up the necessary data collection processes and organise a team of people who can accumulate and manage the information. To save time, you may choose to buy access to a data set, such as demographic information for a specific segment of consumers. You can also use data analytics software to implement, streamline, and track processes easily.

Step 5: Clean the data

Once you have collected and built a large data set, the next step is to clean or process the data to ensure it is accurate and error-free. Check for duplicates and other issues and standardise the data to make it easier to assess later. You can also confirm there are no typographical or formatting problems.

Step 6: Evaluate the data

Read over the data you have gathered carefully. Use various mathematical practices to look for connections between points. Interpret the data and why it could be important for the organisation/ business.

Step7: Visualise the data

Once you have collected, cleaned and analysed the data, you can use a method like data visualisation to summarise the information and ensure it's meaningful. Visualisation tools can help you understand and present the data to others engagingly.

(Indeed Career Guide, 2023)

Examples of visualisations may include colourful charts and graphs. They can represent hundreds of points demonstrating a trend or a powerful narrative. Let's take a look at the following diagram of the revenue collected in the eSports industry. The data used in this graph is on a worldwide scale.

_{(Source: statista, n.d)}

From this chart, you can see where the most revenue was obtained from, in this instance, betting held the most income, this was followed closely by sponsorship and advertising. This data would be considered quantitative as it is based on money i.e.. Uses numbers.

You can access the following website to look a these statistics in further detail. Esports - Worldwide | Statista Market Forecast.

The following video provides you with a guide to analysing data.

Watch: A Beginners Guide To The Data Analysis Process (10.19 minutes)

Knowledge Check Activity

Budgeting is creating detailed financial information that outlines expected income and expenses over a specific period, typically for an individual, organisation, or business.

Becoming financially stable is a skill all should learn. It is easy to spend more than you earn. Tracking expenses, following plan, paying for bills on time, and building an emergency fund are steps to becoming financially stable and living a healthy, more successful life. — Always set a financial goal; this is where budgeting is critical to success.

Terminology

Click on each of the following headings to reveal the terminology you need to know when budgeting for any business accounting year. You must learn to properly prepare and present the following information on any pitch's financial reports.

Watch: Excel (24:01 minutes)

Download Transcript

Types of budgeting

Various budgeting methods have been trialled and tested over time. Budgeting is a skill that crosses from professional to personal life and one that can take time to master. In many cases, people often reach out to a financial adviser to help manage their expenses and make the most out of their income. This can help manage money more efficiently and work towards decreasing debt.

Let’s look at some budgeting types.

Zero Based Budgeting

Zero-based budgeting is your income minus all your expenses, and the outcome will be zero (expenses wise). The rest should go into your savings.
For example, If your monthly income is $4000 (after tax) by the end of the month, every dollar has a purpose. This can help with mindless spending.
Let’s take a look at the following scenario using the zero-based budget plan.

Knowledge check

Answer the following questions based on the Sarah’s budgeting journey.

Personal budgeting and the envelope system

The envelope system is another budgeting plan that can be used to manage and track your expenses. Predominantly used for cash, the idea is to distribute cash into a series of envelopes and use those envelopes for your expenses. For example, you may wish to budget $350 on your groceries, therefore you would put $350 cash in the ‘groceries envelope. While this system was designed for cash, you can do it digitally. In the wake of the pandemic, many people opted for cashless transactions and purchased (online). Apps and digital use have been created to help manage the envelope system digitally.

Using the envelope system

Let’s take a look at the steps to use the envelope system.

Step 1: Determine your budget amount. How much money do you want to spend in each envelope/expense. Determine whether it is fixed or flexible. (Fixed refers to expenses that remain same every month, this could be for rent, bills, groceries, petrol etc. Flexible First step is to figure out each budget amount. How much money do you want to spend in each expense (fixed or flexible). Fixed refers to expenses that remain the same and so on.

Step 2: Create the envelopes The next step is to create multiple envelopes with the expense and budget amount written on the front. Choices can vary. Check out the following examples.

The following video gives you an overview on how the envelope system works and how it can be applied in the digital world.

Watch: Using the Cash Envelope System in a Digital Age + How I Do It (6:50minutes)

50/30/20 Plan The 50/30/20 plan is another form of budgeting that can be used other than the envelope system. The plan has been designed to distribute your money into the following three categories:

50% Needs

Needs are what you must pay, they are non-negotiable and considered key for survival. Half of what you earn should be spent on your needs and obligatory payments.

30% Wants

Wants are items that are non- essential, meaning if you did not buy that pair of shoes, nothing serious would happen compared to not paying your rent. Wants should be considered carefully as it is easy to overspend on them. Take coffee for example, you may like to indulge in a take away coffee, however instead of buying one every day, treat yourself to a take away coffee once a week.

20% Savings

The final category is your savings. This should not be missed, aim to allocate about 20% of your income to your savings. The old saying goes ‘save for a rainy day’, that is to say, you have emergency money on hand should anything unexpected arise. For example, your pet may need emergency vet treatment. Ideally you should have at least three months’ worth of savings on hand should such an incident occur. The following graph illustrates the 50/30/20 plan with examples within each category.

50% Needs

• Rent or mortgage repayments
• Car repayments
• Groceries
• Insurance and health care
• Minimum debt repayments
• Utilities such as gas, electricity, water, rates and so on.

30% Wants

• Take away food
• Clothes/shoes
• Dining out
• Streaming services (multiple)
• Take away coffee.

20% Savings

• Emergency funds
• Pets
• Investments (stock market)
• First home deposit.

If you are having trouble creating the budget, this website provides information on how to calculate the 50/30/20 budget effectively. (Source: Whiteside E, 2023)

Believe it or not, communication is one factor that needs to be considered in planning. It is often said, “It is not what you say but how you say it.” You must consider how you are talking to others when you are communicating. Think about your audience, are you presenting to executives in a board meeting to pitch your plans for the business, are you pitching a product of your own invention, are you in a job interview?

The list of the audiences you communicate with are endless. What is important however, is the planning involved.

Preparation

Being prepared is essential to any successful pitch or presentation. Take your time in the planning stage, this will make things a lot easier for you once you are ready to present it.

Your plan should include:
What you are discussing, that is, the topic or pitch and what resources are needed. 

Open with statement

• cue cards
• a presentation using PowerPoint or Canva
• a sample of a product you are promoting
• the business plan itself
• including the cost/ budgeting contingency plans etc.

The opening statement of any pitch or presentation should have a catchy opening statement. It could be a quote, your mission statement or a catchy phrase to draw in the audience. Making a presentation memorable is essential, especially if you are competing with others. Think about how you can make your pitch stand out from the others.

Cover the points

Focus on the key points- avoid tangents and unrelated points. Stick to what you have planned to cover. Each point should be structured in an understandable order with a logical flow, for example, you would start with what it is you are pitching rather than leaving that right to the end.

Body language

Your body language speaks volumes. Maintaining eye contact with the audience often marks a sign of respect and acknowledgement. Gestures are also important, avoid waving your hands as though conducting an orchestra, rather opt for gestures towards a slide, board, product. Folding your arms or putting your hands in your pocket may indicate lack of interest, confidence or appearing closed off from others.

Looking professional

First impressions often count, therefore when you are presenting, you should ‘look’ the part. Neat, tidy and professional attire should be considered. That is to say, ensure your pants and shirts are ironed, shirts tucked in where appropriate and opt for ‘business’ type clothing rather than overly causal clothes.

The importance of teamwork 

Many presentations require some form of teamwork. It is important to communicate effectively with those in your team and play to their strengths. For example, one team member may have a strength in math skills and, therefore should work on the budget, while another member of the team has a particular flair for creativity. This person should work on design, colours etc. The old saying goes "There is no I in team." Ensure, if you are leading a team or involved in some team work, your communication skills are up to scratch, poor communication can lead to mistakes and have impacts on the overall goal. 

Knowledge Check Activity