Creating a killer business plan (Part 2)
Last week we looked at some general ideas to help brainstorm for your business plan. This week we’ll put it together.
Business plans can be so complex they’ll make you want to choose wrestling a grizzly bear over starting a business plan. Put away your bear spray; at this stage you can safely create a shortened plan because a lot of issues won’t apply to a smaller business like yours. These are the most important areas to plan:
Business description ì Think of your elevator pitch and your goals. Maybe you’re in the business of taking high school seniors’ portraits and by the end of the year, you want to have 50 clients and the business to break even. In five years, you may want to be the portrait photographer of choice for high schools in your area.
Marketing analysis ì Trawl Google for your competitors. Track things like:
- competitor name
- number of photographers
- pricing
- coverage area
- key clients
Sometimes information will be scarce, but gather everything you can. Try mapping out your competitors’ coverage areas to see if there are areas that are underserviced. See if you can spot a gap in service offerings that you could fill. Take note of what they do better than you so you can learn how to improve.
Marketing plan ì Define your niche, develop a list of potential clients that fit that niche and work out the best way to target them. Ask yourself how you plan to enter the market, how you intend to attract customers and why you think this will work.
Financial plan ì Outline how much money you want to make over the next year. How much money will you need to start out? Are you planning to get this money from savings, small business loans, or tap dancing for coins in the train station?
You’ll need to create a cash flow projection. This is just a budget for how much you need to make vs. how much you need to spend each month over the course of a year. It will look something like this:
Be realistic about your estimates because those figures represent your monthly goals.
Hints: the monthly cash balance is how much you made that month. The closing cash balance is the opening cash + total cash in ì total cash out. Next month’s opening cash is equal to last month’s closing cash.
If this all makes you go cross-eyed, add a “cash out” line item for “accountant” and pay someone to do this for you.
Remember that business is always changing. You can make a plan and try to follow it, but when things change, be flexible. Adapt the plan and keep moving forward.
I’ll leave you with some words from successful entrepreneur and motivational speaker Jim Rohn:
If you want to turn your life or business around, then don’t start your day until you’ve finished it on paper ¶If you want to retire rich and happy in record time, then don’t start your year until you’ve finished it on paper.
Sound tedious? Maybe, but I’m inclined to listen to a guy who was a self-made millionaire by age 31.
Pili Foss
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When she’s not writing her blog, Cult of Clothes, Pili is a corporate advisor working with businesses of all sizes, from start-ups to stock-exchange-listed companies. She is fascinated by the evolution of small businesses and loves to combine her passion for writing with the opportunity to help entrepreneurs grow and learn. |
