Planning for your Business
A Guide to Business PlanNING
When you are just starting out in business, you'll often get advice to make a business plan. Which makes sense but there's a problem with that advice, as with so much advice, in that one solution does not fit everyone.
You can spend a lot of time perfecting a business plan. There are so many things that should go into one and if you have any perfectionistic tendencies you will waste hours and hours on this. The truth is only you need to spend lot of time on one if you are looking for investors or partners.
At the other extreme are all the small business owners who don’t have a business plan. They just started freelancing and then evolved into building a business, so they skipped the foundations.
But do you need a 10 or 20 page business plan? Not necessarily.
If you’re trying to secure funding, then your business plan does need to follow a set format but if it’s just you starting out a new venture with your trusty laptop/studio/camera, then designing your business plan is just for you and can take any form you like.
In this post I'll cover what you should put into your business plan, give you the top questions you need to answer for putting one together quickly and effectively and also give you some resources for helping you write one.
WHY YOU NEED A BUSINESS PLAN
Having a plan is crucial because if you just plan on figuring things out as you go you will waste so much time. Think of it this way: if your time is the main commodity in your business, then all that tweaking and figuring out represents hours and hours of INVESTMENT into your business. So you'll end up jumping into building an ad campaign for your business based on the latest thing you read in your Facebook feed. Or you'll throw together a website and a business card and then wonder why no one is calling.
Invest your time wisely.
Create a step by step plan for growth.
Benefits to creating a business plan
1. It keeps your eye on the Bottom line
A lot of business owners waste a lot of money on expensive tools, tech and/or advertising that aren't actually going to translate into any real income. It’s very easy to overspend when you’re starting out, thinking that you "need" to have the right stuff to be taken seriously. What you actually need is to know exactly how many products or service packages you need to sell to make a profit. Then you need to plan how to sell that many before you splash out on the new laptop. Your business plan makes it easier to avoid getting carried away spending when you're not ready.
2. Makes decision making easy!
You will find it so much easier to make a decision when you know where you are heading. When you you are faced with a new decision or direction for your business, check to see if it will bring you closer to your business goals. If not, let it go. Helps reduce shiny object syndrome.
3. HELps you STAY FOCUSED
A chief source of stress for small business owners comes from having so many things you know you COULD be doing for your business, in fact the list could keep you busy for the next 6 months, but having no idea which one you SHOULD be doing first.
A business plan helps you focus on the most important thing for right now, which is connecting to people most likely to become customers. (If the idea of this is scary, check out my free Beautiful Business Boost, which walks you through growing your business online.)
WRITING a Painless One-Page Business Plan
Business is a series of experiments and there's a lot of trial and error involved. It’s also never done. We've all seen the business that was around for 15 years that died. There’s never a point at which you’ve got it all figured out and it runs like clockwork. (That's what keeps it interesting in my opinion!)
So a full business plan with 3, 5 and 10 year goals often goes out of date quite quickly. It’s all about testing different things and finding out what works for your business goals, your income goals, the way you want to work, the customers you want to serve, and your lifestyle. All those things can change and so having a rigid business plan won't serve you at all.
So what's the best thing to do instead?
My favorite approach is a One-Page Business Plan. It maps out what you want your business to look like. It's your roadmap and easy to refer to frequently.
This should actually be fun! It should include:
1. Big Picture Goals
These are overarching goals for the next 12-18 months. Don’t make your goals so big that you can’t possibly achieve them in that amount of time but also make sure these goals excite and motivate you. For each of these goals, you need to add a timeline to make them actionable.
2. Financial Goals
Write down an annual income goal for your business, then break it down to find your monthly sales target, so that you know exactly what you are aiming for. This should be your gross, not your net. Do not, do not forget to plan for taxes! This catches so many people out.
Once you have your revenue stream mapped out you need to think about your cost structure - how much does it cost you to deliver your products or services? Obviously this is an important number for you to know!
3. CompetitOR Analysis
Make a list of your top competitors. Business you know who have potentially similar products or offerings to the ones you are planning to offer. Write down who they are, and make a list of some of their strengths and weaknesses. What do they excel at? How are you different and what you can do to distinguish yourself from your competition?
If your competition has similar products or services for sale as you are planning to sell, make note of the price ranges to help give you an benchmark of how much is typical for a product/service you may create one day.
4. RESEARCH YOUR AUDIENCE & validate your business idea
Surveys are a great way to understand more about your audience without having to guess. You can read more about how to validate your business idea before spending lots of time and money in my post here.
5. Set a Growth Strategy
What are you going to do to continue growing your clientele and income? If you need new clients and customers every month, how are you going to keep finding them? Brainstorm to come up with some strategies that you can use to grow your brand. What types of marketing and promotion strategies will you use to keep your business growing and thriving.
Review the plan: Review your plan quarterly to compare what actually happened to what you projected. This will keep your plan reality based and help you tweak your strategy realistically.
1. Free Business Plans
Free business plans and sample business plans available online:
- Score’s General Model Startup Template – Business plan template for a startup business, with instructions for each section and fillable worksheet.
- Bplans – The largest online collection of free sample business plans. Also provides helpful tools and guides to help you better manage your business.
- Bplans’s Gallery of Samples – Over 500 examples of business plans.
2. The Women's Business Center program
(SBA.gov/content/womens-business-centers) provides training and counseling, usually at very low fees (or free).
(SCORE.org) is a network of working and retired executives who freely share their expertise. They try to match their members' specialties with your needs.
4. Book Recommendation
Business Model You by Tim Clark with Alexander Osterwalder & Yves Pigneur – Implement the one-page tool from Business Model You to create a game-changing business model.