Do you need a Business Plan?
Have you been wondering if you should be creating a business plan or updating one you already have, maybe finishing one you didn’t complete … because honestly, once that business has kicked off, who has the flippin’ time to go back to a business plan? I am about to give you some great news.
No, actually, it’s fantastic news!
No doubt someone with an *insert eggplant emoji* and Y chromosome will email me to mansplain why I am wrong about this, but I am not. Business plans are dumb. Business plans are 90% useless. Business plans are a waste of time for most micro and small businesses.
Why would I say such mean things about a business plan?
I will tell you in a moment, but first…
Before I start hurling abuse at business plans, I need to give you a disclaimer on this advice; if you’re looking for an investor or want to hit the bank up for a dump truck delivery of cash into your business, you’re going to need a business plan. Sorry about that. Also, some business grants will want you to show off your fancy plan, busting with mission statements and numbers.
So now let me talk smack about business plans.
If you google business plan templates you’re going to be answering many, many pointless questions. My least favourite are Executive Statements, telling a boring story that no one wants to read about your business and why it will be successful. You will also see Mission Statements and Visions included in this uselessness of words.
I do encourage my Profit Lover to have a vision, but it’s based on your personal goals, not what grand actions your business will take.
Next up, you’re likely going to attempt to drag together an Industry Analysis. Just saying those words gives me corporate life flashbacks, and not good ones. This is you chasing down impossible to find numbers and predicting trends.
Moving on to Customer Analysis, this is where you attempt to describe your ideal customer and their needs. Most people will start with age, gender identity and marital status. They might throw in university education and some other random facts but nothing that really tells a story of who their customer is.
We finally move onto something slightly resembling useful, which is the competitor analysis. Knowing what they’re up to, how they’re marketing, where they fail miserably (so you can capitalise on it like a true business owner) and how you can be better is beneficial. Of course, you’re going to need to secret squirrel the information, so have fun with that.
As we move down the list of business plan inclusions, we arrive at a marketing plan. I have seen a lot of business plans, more than you can count on your hands and feet. But, has anyone ever stuck to the marketing plan outlined in their business plan?
Nope. Not once. Not ever. Why?
Because it’s expensive to start all those pre-planned marketing activities. Unless you kick off with a big team you’re going to need to clone yourself to run your business, deliver products and services, interact with customers, stare aimlessly at social media contemplating this crazy idea of self employment, and keep on top of marketing.
Operational Process come next, and let’s just not talk about that. It’s all about milestones and junk, that is… a bit useless.
A Financial Plan usually comes next. I can kind of get behind this one because it does force you to think about the primary purpose of your business, which should be to generate cash flow. So yes, even if you think your primary purpose is to re-colour the aurora of pre-menopausal women with daddy issues, you still need to generate cash first.
Cash is what drives your business, not your purpose or calling or gift to the world. They’re a nice touch, they give you motivation, but they don’t keep the lights on or the Facebook ads running.
If you’re going deep into your business planning, you might complete a SWOT analysis, a perky little acronym that stands for strengths, weaknesses, opportunities and threats. Once again, useless. I mean.. who had a mass pandemic with global shutdown and economic devastation on their SWOT analysis bingo card? Not me.
So, if business plans suck, what should you have in place instead?
I am not saying ignore planning altogether, but we don’t learn a lot from planning. We learn from doing, we learn from failing, we learn from experience and challenges and cranky customers with bug in their bonnet about something you did or didn’t do. That is where the guts of business comes from, not from a static business plan.
You want something that will grow with you, you want something that is milestone or goal driven but also something that will allow you to pivot, to change course and to evolve in a way that works for you. But, unfortunately, business plans don’t allow for that.
If you’re thinking I am suggesting you throw all plans out the window, I am not. A plan that focuses on goals, and measurable and improvable results will serve you and your business well.
Pay attention to the numbers, they will show you where you need to focus time and energy, especially around marketing and sales.
If you have been a Profit Lover for a while you know how much I love a plan, but only when there is something you can track along side of that plan.
That is what makes a plan useful!
Let’s run through the basic plans I suggest you have in your business. I am going to go easy on you today and talk about the non negotiables, the Melanie will loose her mind when you don’t have these basics in place.
You can plan a full year in advance if your business has been around for a few years, and you’re not intending to make any big changes or leaps. If you’re new, your business is changing or growing quickly then you can stick to 6 or even 3 months. The key is to always be planning head, not hitting the 3 month period your planning for then trying to pull goals together.
In my business I plan for 12 months but I do adjust each quarter, so if I have an awful quarter where I don’t get a lot done I can make adjustments for the rest of the year. It gives you a good understanding of the impact of a bad quarter.
Let’s talk money and numbers first, my favourites.
Start your anti-business plan with some idea of what you personally need from your business to make it viable. If you’re already there, you’re already making enough to survive then how much do you need to thrive? What goals outside of your business would you like to reach? How much will it cost you to achieve those goals?
When you have your personal income goal you can reverse engineer a lot of your business. You can make estimations like how many website visitors do I need each month, how many of those do I need to make a purchase, what does the average cost of that purchase need to be? What do you need for expenses, how much will that leave me with to pay myself and taxes.
People tell me all the time that their business isn’t predictable or that their business is different. Nope. Stats are stats, data is data and we can use that to make some pretty cool predications and estimations in your business including what needs to happen for you to hit a particular income goal.
Every single business on earth, yes, the entire planet… should have sales goals.
Yes, even if you’re only in business to change the world or change lives. The more you make in sales the more lives you can change and the bigger the impact you can make, because you can get in front of lots more people when you have money.
Your sales goals should be monthly, and while I would love to explain how to set your sales goals that is another entire episode on it’s own. I do have the process in Members Club, by the way.
Next up you should know your monthly run rate, that is the average amount of money it costs you to run your business each month. So, your average monthly expenses. Another issues I see here is business owners massively underestimating their expenses. All those subscriptions add up fast.
Now let’s talk marketing and marketing numbers.
Develop a stalker level understanding of your target market, who are they, where do they hang out, what do they spend their cash on, who influences them and their buying decisions. What attracts them, what turns them off, what they lay awake at night thinking about. Go deep. The more you know the better your marketing will be.
Map out your marketing funnel. Sit down with a piece of paper and map that bad boy out. Where do you people find you do? What do the do next? What happens when they fill in an enquiry form? What happens if they join your list. What if they book a discovery call or add goodies to their cart then not hit the buy button?
Here is why you need to do the funnel mapping exercise, it gives you the important stepping stones your potential customers or clients hit before and after they purchase. That means you can start tracking those data points, like website view or cart abandon rates, price list requests, bookings and the list goes on.
This means you can now track for example how many people hit your website in any month, how many sales you made, what your average sales was… see how we are looping back to making your business predictable? Ahh.. yes! I see. I see.
So, quick recap so you can mental tick or cross off your list. Do you have:
- Personal income goal
- Sales goals
- Run rate
- Weirdly deep knowledge of your target audience
- Funnel Map
- Funnel Map goals
If you can’t tick the list off, then there are some fun activities to get started on. Of course, it’s worth repeating that if you’re in Members Club we work through all of this and so much more. Plus, I am live in the Facebook Group each week so if you need help working out what you should be tracking I can be very advantageous.
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