The 5-Step Simple Business Plan

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.

3. Products

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:

  • Facebook
  • Pinterest
  • Twitter
  • Blog
  • Email
  • Etsy Marketing
  • Partnerships
  • SEO
  • 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.

5. Financials

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.

5 Ways to Maintain Sanity While Launching a Small Business

As I begin this adventure of trying to start my own business, I’m finding that my general disorganized approach just hasn’t been cutting it.  I’ve had to re-think my entire approach to this process and how to maintain any semblance of balance with the demands of a full-time “real job” and a family with two young daughters.  So to ensure that I keep my sanity with so many moving pieces, here are the 5 things that I’ve found really helpful when trying to launch a small business:

1. Make a Plan:

As some wise sage once said, “A failure to plan is a plan to fail.”  I actually believe this is true and it’s a lesson that unfortunately I’ve had to learn the hard way.  Too often, I’ve taken a leap before glancing down to see if there are rocks below and I end up getting hurt.  If you really want to accomplish something big, go into it with a plan of attack – your likelihood of success increases infinitely.

When I decided that I really wanted to commit to launching my own business, I first did a little happy dance, because there is always time for a happy dance.  Then I sat down and started working on a business plan.  Even though the cost to launch a storefront on Etsy is ridiculously cheap and I don’t need investors, I took the time to research, organize my thoughts and put down in writing, a plan for my business.  (I’ll have a post tomorrow about how to write a really simple business plan for those who are interested.)  Attached to that 5 page business plan (told you it was simple!) was also a Pink Bulldog Action Plan – a full list of everything I need to do before my online shop opens it’s doors.  This action plan is complete with milestones and a timeline.

As I was writing the business plan, I really did feel a little silly creating a full plan for a business that hadn’t earned a penny yet, but I actually found the process really helpful.  First, it helped me really think through what I want this business to be, what I want it to represent and what my goals are.  Secondly, it helped give me some tangible things to do and key milestones to work towards.  In these early stages, I cannot stress enough how important it has been to have something written out to help guide my actions.

Also, I made sure that my business plan and my action plan both contributed towards the ultimate goal of achieving my BHAG.  All of these things are working together to help make me a woman on a mission!

2. Create daily to do lists:

I cannot stress enough how helpful daily to do lists have been for me.  My life isn’t insanely busy, but I do work full time, have two kids under the age of 2, have a husband, a dog and 2 cats to take care of along with all of the everyday stuff like laundry and dishes and keeping our house from descending into complete disarray.  I look at my daily to do list as the small steps that get me to the end of the marathon.  Your daily to do’s get you to the next step in your action plan, which leads to the next milestone in your business plan, which will ultimately lead to you achieving your Big Hairy Audacious Goal.  It’s a beautiful thing!

On any given day, my to do list looks something like this:

  • Create 2 new prints
  • Write descriptions for 3 prints
  • Write one blog post

Usually it’s just 2-3 pretty simple things to keep me and Pink Bulldog moving forward in the right direction.  And man does it feel good to cross those things off.  If I’m being totally honest, sometimes I even write things down that I’ve already accomplished, just so I can get that feeling of crossing it off the list.  At the end of the day, if I’ve crossed everything off my list, I look at it and think, “Boom!  Roasted!”  And then I do a happy dance.

3. Keep your priorities in check:

This is sometimes a tough one for me.  My personality is such that when I latch onto an idea, I just want to run with it and the rest of the world just kind of goes on without me.  I can get really absorbed in what I’m doing and really excited about making things happen and those qualities are both really great and I think really necessary if you want to start your own business.

On the other hand, absorbing oneself completely in a new project is not really healthy, nor is it really an option if you want to maintain a happy home and family.  The thing that keeps me grounded in reality is that one of the biggest reasons I’m doing all of this is for my family.  It makes absolutely no sense to pour your heart and soul into something for your family if you are going to neglect them along the way.  That’s why for me, it’s important to take time to have dinner as a family and cuddle with my daughters and watch some TV at night with my husband.

As a side note – the divorce rate among entrepreneurs is higher than the average.  My hunch is that it’s because a lot of people who start a business have priorities that are a little out of whack.  Instead of putting family first, the business becomes the priority and when that happens, things start to fall apart very quickly.

On the other hand if you want the kind of success that will put you on the covers of magazines and will make your company a household name, you probably do need to make your business the #1 priority in your life, which leads me to my next point:

4. Define what success is to you:

This seems like a pretty straightforward question, but my guess is that if you really thought through what you would consider a success, it might not be all that clear.  Is success a million dollars in the bank?  Is it having 100,000 followers on Twitter?  Is it getting your face on the cover of Time magazine?  What does success look like to  you?  What will it feel like?  What does it taste like?

For me, success for Pink Bulldog rolls right into my Big Hairy Audacious Goal – I want to create a business that will allow me to quit my day job.  There is obviously a financial piece tied to this too.  I know exactly how much income it will take to get me to that level and I’ve committed in writing that once Pink Bulldog generates that amount consistently for 6 straight months, that I can start treating it like a full time occupation.

Note here that I don’t view success as a static, stationary thing.  It’s not something that once you’ve achieved it, you can just rest on your laurels.  Success takes continual work to maintain and your definition of what success is will likely change over time.  The important thing is have a solid idea of what you want to achieve and where you want to go before you dive in.

5. Cut yourself some slack

Even the best laid plans can sometimes go awry.  Kids get sick, your computer crashes, the dog actually eats your homework.  Life is always going to hand you a few lemons that will get in your way.  Or the analogy I actually prefer is that even if you’re in first place, you’ll inevitably get hit with a red turtle shell every now and then that will slow you down.  (That’s a Mario Kart analogy for those who didn’t pick up on it. :))

When you get hit with that turtle shell, I’ve found that it does absolutely no good to pout about it.  It might make you feel a little better for a minute, but whining or feeling bad about what you didn’t accomplish serves no purpose other than to slow you down even farther and take away your motivation.  If you’re truly working hard, cut yourself some slack!  Don’t let the stress of things left undone ruin your night and don’t feel guilty about taking time to enjoy life and those around you.