A goal without a plan is just a wish. – Antoine de Saint-Exupery
If I could have taken the time to really digest that quote when I was younger, I probably could have saved myself a lot of time, money and heartache. The upside is that I firmly believe that old dogs can be taught new tricks and this 30-year old has finally taken the concept of planning to heart.
As I’m slowly working at getting my little business up and running, one of the things that has been immensely helpful is a business plan. I mentioned in an earlier post that I felt a little silly creating a full plan for a business when I wasn’t in need of any start-up funding. Silliness aside, sitting down and thinking through all of the various facets of what will be my business has given me the direction I need to keep things moving in the right direction. When I created this business plan, I kept things very straightforward and simple and I thought it might be helpful to share some of what I’ve learned with others who are in similar situations.
*Note that this type of business plan works well for those who are not seeking startup funding. If you’re looking for investors or are going to the bank for a loan, you’re going to need a much more detailed plan. Check out PaloAlto.com – they’ve got some great tools to help you if you need to take things up a notch.*
1. Define your goals and strategy
This section is the backbone of what you want your business to be. Make sure to include a brief overview of the general concept and then define 2-3 goals for your business. As an example, here’s what my goals look like:
Goal #1: For Pink Bulldog Design to become a profitable business and a brand that people love.
Goal #2: Create a steady stream of income that will allow for one parent to work from home.
Obviously nothing too crazy here and as you can see, the goals are very broad. Both goals are directly related to my Big Hairy Audacious Goal and because I set these goals down in writing from the start, they became the foundation that my business plan was based on. I had these two goals in mind as I tackled every additional step in my business plan and I think it helped give me tremendous focus.
Along with these two large goals, I also wrote out several key milestones that I will need to achieve along the way. My milestones included things like “Launch Etsy shop”, “Launch WordPress Blog”, and “One person moves to part-time management”. Some of these milestones, like the transition to part-time job, is tied to certain financial achievements, which are also specified in the document. Because some of these milestones are huge, not only for the business, but for my family as well, I thought it was very important to be clear from the start about what it would take to get there.
The last item that I included in the first section was an overall strategy piece. This piece helps answer the question, “How are you going to achieve your goals?” Well for me, I’m going to achieve my goal of running a business by creating an amazing product, launching an Etsy shop, providing stellar customer service and marketing the hell out of my brand. (More on the marketing later) You don’t have to go into a crazy amount of detail when you’re discussing your strategy, but some general context about how you will accomplish your goals is important.
2. Market Research
I’ll admit it, I am a total market research nerd! I actually love combing through websites and online shops and trying to determine what works well and what doesn’t. Before I had even decided to create a graphic print business, I actually got inspired by doing market research on Etsy and other online shops. I started moving in this direction because I saw an opportunity to fill a need in the marketplace – we’ll see soon if my instincts were right!
If you haven’t worked in business before, the term “market research” might sound a little intimidating, but I can assure you that while there is a science to it, it’s definitely not rocket science. Here’s what you should do:
- Choose at least 5-10 sellers who are currently operating in your niche and study what they do.
- Look at and make notes on the following:
- Product selection – What types of products do they offer? Who would you say their target audience is? What is your general impression of product quality?
- Pricing strategy – What is the average price of similar items in your niche? What would allow someone to charge more than the market average? What kind of impact do you think setting a lower price would have on sales.
- Marketing – How are your competitors driving sales? What social media tools are they using? Do they have a blog or a newsletter? Are they doing any pay per click marketing that you can tell? Are they running any promotions or offers?
Depending on your niche and your business model, you’ll likely have other things you will want to look at like shipping charges, online product descriptions, and overall branding. You’ll also want to make some notes about things that you liked and things that you didn’t. If you do your market research right, you can learn a ton from your competitors and avoid some potentially expensive mistakes.
To put it simply, in this section you need to explain what you are selling and explain it very clearly. For Pink Bulldog, our products are high-quality graphic prints for the home. In my business plan, I detailed what these prints are,what our primary categories are, what the opportunities for line extensions are and what I want the customer experience to be when they purchase a product from Pink Bulldog.
The customer experience piece covers a lot of ground – from the images and product descriptions that someone sees on the website to the communication with the customer about their order to the actual packaging that the product arrives in. I’ve detailed it all within my business plan and it’s all helping me to form a clear vision of what I want my brand to say.
4. Marketing Strategy
So I mentioned in step #1 that you need to provide some general context about how you will achieve the goals you’ve set out for your business. The marketing strategy needs to be more detailed and should answer the question, “How am I going to get people to buy my product?” For Pink Bulldog, I’m going to be using a lot of different channels to drive traffic to my Etsy site. What I did in the business plan was define each channel and provide some key strategy points for each. For example, I’ll eventually be utilizing all of the following tools to help market my business:
- Etsy Marketing
- Pay per click marketing
In my business plan, I illustrated which of these channels are going to be the most important for my business, how they are going to be used and which channels will be layered in down the road.
Ah the money piece – everyone’s favorite, amirite? I cannot stress enough how important it is to fully understand the financials of your business before you take it to market. So even though my business plan is very simple and streamlined, I didn’t skimp on the product cost details. I included everything from the printing costs to the cost of the packaging paper to the Etsy listing and sales fees. I haven’t even opened the doors for business yet, but I already know down to the penny how much profit I will make on an 8×10 print.
If you are really ambitious and have the intel, you should also include some forecast data for the expected revenue for your business. Again, you don’t have to go crazy here, but you should probably have some idea of what to expect in terms of monthly sales and how you expect them to grow over the first few months of business. I plugged in some forecast numbers into my business plan and will be using them as a general barometer of success. I would say that my forecast numbers are more like sales goals rather than an actual forecast – either way, I think it’s helpful to have something down on paper.
Bottom line: if you don’t fully understand your costs from the start, you could very easily find yourself throwing money into a pit without the hope of ever making a profit.
And that’s it, that’s the whole business plan. In 5 simple steps, I was able to get a really good understanding of what I want my business to be, who my competition is and what the overall financial picture looks like for the business. If you have any questions or just want to know more, feel free to shoot me a line.