One of the reasons why so many businesses fail is because they fail to plan. You wouldn’t think of going on vacation without a plan so why would you dream of hitting the road to self-employment without one?
Imagine hitting the road to a distant and unknown location without a plan. You’re likely to wander aimlessly, take many detours, randomly meet nice (and not so helpful) people, and you may or may not arrive at your destination. Also, because you’re not 100% clear on where you are going, you never quite know exactly where you are and where you stand in relationship to your ultimate destination. That doesn’t sound like fun or a success strategy to me.
For many, the idea of a business plan conjures up a thick 100 page report full of charts, graphs, and complex sounding terms. Nothing makes you want to run to the coffee shop or say clean out a long neglected closet more than the thought of creating such a document. While there are businesses that need this sort of plan (if you’re seeking funding the rigor and requirements are much greater), most people headed down the self-employed path don’t need anything nearly as intimidating and complex. A several page plan written in plain English and a lot of bullet points is all you need and will go a long way toward increasing your odds of success.
Before you start your business planning, however, I want you to be certain you have a clear picture of your life plan. Your business is there to support your overall life plan. If you’re not clear on what you want your life to be like, take time to reflect and get clear before you dive into the business plan (at least for now – it can change whenever you want it to). Some examples of what you want to know are:
- What are your personal values?
- What are your priorities?
- What is your work style?
- How much time do you want to take off from the business each year?
- What kind of flexibility do you need and want?
- What are your personal reasons for starting the business (To live your calling through your work? Flexibility? Grow your income? Get rid of a commute?)
- What is your partner/spouse/family’s tolerance for risk?
- To what extent will personal funds be used to start and grow the business?
- Is your family on board with this new venture? Will they be supportive in practical and emotional ways?
There are no “required” questions in the life plan but these are some crucial ones to get you started. Don’t get so swept up into the excitement of starting a business that you forget to give attention to these most important factors. Your life plan will drive your business model, goals, and work style. If you don’t do this exercise honestly and in the right order (life first, then business) you risk building something that is in conflict with who you are and what you really want.
Now, it’s time to create the business plan. Here are the things you want to have in it:
- Name of your business and other business entity details.
- List of top 5 business and personal values.
- Your personal and business mission, vision, and goals.
- Your target audience.
- Problems your target audience has and how your product or service solves them.
- Benefits your ideal customers will realize from using your product or service.
- Financial projections for revenue and expenses. How you will fund the business until such time as it is self-sustaining.
- List of your major competitors and how you differentiate yourself from them.
- Marketing plan: list of strategies and tactics you plan to use and the results you expect to receive from them.
- List of any employees, team members, or other professionals you will engage to accomplish your goals.
Your business plan is not a write once and file it document. In fact I’d advice you to set aside some time for planning and then get into action. The only thing worse than not having a plan is to spend forever planning and not act.
This is a document and a practice you should review at least annually if not more frequently. Use it to measure and gauge your marketing progress and assess the accuracy of your projections. This sort of regular rigor will help you be clear about where your business is right now and give you the opportunity to shift and change as you move forward.