We've found these 5 items to be the key components to building an effective, working business plan. We'll even let you in on a secret - only one of these steps is really any work. The rest are just an encouragement to actually get out there and make it happen.
1. Don’t panic
Nothing is set in stone. Your business plan should be strong enough to attract potential investors and partners, and provide a stable foundation to actually start executing on your vision. You can amend & update it as you go.
2. Think through and write down the vital things
Here are some of the categories you may want to consider. You’ll want at least a solid framework for each of these areas before you get started:
- General Company Description: This includes your purpose and objective. What you are providing, who you are, and what you want to achieve.
- Products & Services: Describe your products or services as well as you can. Don’t take on too many things to start, just choose a few things you can do well and execute on every time before you add to the list.
- Customer Analysis: Who is going to buy your product or service? What do they want, what’s important to them, how does your plan meet their needs?
- Production Plan (if applicable): If you’re selling a physical product, what are the components, and how will you get it produced? What are the costs and quantities? What are the limitations and what’s your plan to scale?
- Marketing Plan: This eventually deserves its own plan. But for now, stick to the basics. How will people hear about you and your product? Where will you go and what will you spend to reach potential customers?
- Management & Organization: Is your business singly owned? Is it an LLC? Are there partners? How will you run it? How will you manage employees, freelancers, contractors? Think of where you are to start and where you might grow to in the next 1-2 years and set a structure in place. You don’t want to have a product selling like gangbusters, without the support to keep things running smoothly.
- Startup Expenses & Capitalization: Where is startup capital coming from? Are you self funded? Take a sober and honest look at what it will take to start and get you through the first 6 months to a year. What's needed and how will it be spent?
- Financial Plan: What will it take to break even? What does that mean? When will you pay your own bills and move out of startup money? When will you be profitable?
3. Keep your plan as simple (and nimble) as possible
Don’t get bogged down with too many details early on. You may need some clarity for your investors or partners, but more likely you’ll be changing, iterating, and adapting on the fly in the early days. Your product may change. You might respond to environmental factors. Knowing when to pivot is important, so keep your plan lean to start.
4. Get good input
Ask seasoned people you respect (hopefully with some experience in your field or industry) to look over your plan. They will point out pitfalls and traps, and share their experience. More importantly, they’ll give you affirmation that your plan is solid. Their confidence in your business is an important part of the process. These are likely your best early referers.
5. Just do it
Getting out there, executing, and hitting the pavement is at least 75% of the struggle. If you’ve done all the above, you’re already well ahead of the rest.
I know that this may feel overly simplistic, but it’s really that easy. The hardest part is choosing to start something and actually acting on it. If you have a solid product or service to offer – you’ll find that the process will confirm itself. People will be excited about your vision, give great input and encourage you to dive in. And remember the 80/20 rule – your plan doesn’t have to be perfect. Getting it 80% of the way offers all of the real benefits you need from it. Don’t waste the 20% making it perfect – it will change anyways. Just go out and do it!
Re-visit your plan every 6 months for the first year or two – you’ll find that services you agonized over detailing will be services you no longer provide. And much of your revenue could be coming from projects that you are skilled at, but never dreamed you'd sell in the first year. At least that's our experience. Be flexible, manage expectations, and deliver. Start now!