WRITING BUSINESS PLANS
It’s probably been on your to do list for the last 2 or maybe 3 years. It’s likely half finished and languishing in a folder somewhere… maybe.
What about that idea for a business that’s been running around your brain for a while. Let’s test it out. What if you could create a simple and straightforward business plan in a morning? That would be great, right?
We think it really can be that simple and just as effective as a lengthy one. So how do we start?
Step 1. Download our free One Page Business Plan.
Step 2. Find a quiet space and have the fuel of your choice.
Step 3. Let’s go.
I’m assuming you have a business name or a rough idea of one. Remember that with all plans, it can change.
Goals and why we need them
Let’s look at what we want from our business endeavour. This is not the same for all of us. There are many reasons to start or run a business and it’s not always about money.
With the goals, I want you to think more broadly than ‘make a million dollars’. What are we aiming for? Do you want to create something that you can sell or are you side hustling for some extra income to kill some debt?
Start with the long term goal and dial it back for the short term. Try to be realistic here. I’m all for a BHAG* but for the vast majority of us, they serve to demotivate rather than motivate. But hey, maybe you’re the exception!
So, what is your business?
Are you selling a product or a service? Are there hundreds of others also selling this product or service? If so, you really need to think about how you’re going to do it all differently. But we’ll come to that! If you’re already in business, is it still the same? Does it need to evolve? Use this plan to try out a new direction.
And who exactly is going to buy from you and why?
Be specific here and understand the motivations of each group of potential customers. I’m assuming here there could be more than a single group. Why will they buy from you? What problem or problems are you solving? Has your target market changed over time? Does it need to change in order to meet your goals? Are you going to solve different problems?
Resources and stuff
At this stage, we’ve identified what we want our business to be, who we are talking to and why. Now the slightly tricky bit. How are we going to produce this baby? Can you do this alone or will you need help? Materials, space, an incubator? How much will this cost and how do you intend to pay for it? Don’t spend too long on this section. We can revisit it later. Ballpark it for now. If you’re already in business, then think about new resources or upgrading what you have if need be.
Look at me!
Back to my previous point about the kind of business you are and your fellow competitors. It’s more than likely others have the same or very similar offering. I’m guessing the first three things you think of as differentiators, your competitors have probably already expressed in some shape or form. You know the culprits here, you’re professional, offer amazing service, collaborate etc. etc. Drill deeper to what are you really offering that’s genuinely better than your competition. You’re going to need to know this to really set yourself apart from the crowd.
Now buy me
This section is really about how you’re going to convince people to buy your product or service. Imagine that you met an old friend in the street and they asked what you were doing now. How would you explain your business to them in 3 sentences? What are your top three selling points? This is your mini sales pitch.
This where we work out whether or not your idea is viable and/or just what you could earn providing a new or revised product or service. If you’re already in business, this should be something you are already across.
Our revenue stream is simply what we’re going to charge for our product or service. There could be any number of these, so list them all with the different price points and roughly calculate a reasonable amount you can sell in a year. If it helps to break it down by month, do so, but make sure all yours costs in the next 2 sections are also monthly.
Do you have any direct costs? If you’re creating a product to sell, your costs to create the product would go here.
Our next stream is about how much it’s going to cost you to run the business. This is where we capture wages (including yours as the owner!), rent, software subscriptions etc. etc.
Calculator time! Start with your final revenue figure, minus your direct costs and your overhead expenses. What’s left is the net profit. You will then be taxed on that profit so we’ll use a basic estimate of 30% of your net profit here. What’s left is your net profit after tax. How’s the figure looking?
Use this simple method to test out fewer products and services at a higher price point or try increasing the number of products or services you need to sell to reach the figure you’re looking for. Either way, you’ll get a quick and simple idea of whether your business is going to work for you and how much you really need to sell in order to make it viable.
Download our one page business plan template.
If this was too simple for you and you’re looking for the next level in business planning, head to our free eBook here called ‘How to write a business plan’. If you really are pushed for time and are in need a strong business plan that needs to wow investors or help you get a grant, get in touch today. We’d love to help.
*Big Hairy Audacious Goal — a term coined by authors Jerry Porras and James Collins in their book published in 1994, “Built to Last,” which examines the qualities of successful visionary companies.