You know what's even better than a cool business idea? A BUSINESS PLAN! As a certified Project Manager Professional (PMP), I’m keen on creating, evaluating, and modifying a plan to get everyone on board. The great thing about this skill is that it’s precisely the same steps for writing a business plan. As a small business owner, it's fun to skip this process and start with the exciting branding and marketing stuff. I promise you, that if you start with the business planning, your lawyer and brand designer will greatly appreciate your work and will use that foundation as the basis of their work with you. Below I go into detail on the three “R’s” Research, Review, and Reset. By using these three steps during your business planning phase, you’ll set yourself up for success in the end.
The 3 R’s:
Start by identifying your business idea and which type of business plan you’ll need to use, long or short-form (discussed in Phase 1 of the SBSUG). I personally love the short-form Lean Model Canvas, as it’s quick and easy to understand.
Once you’ve established the type of plan you’ll need, dive into each component and really think about the nuts and bolts of your business. This might mean lots of online research, face-to-face interviews, and brainstorming with your partners. It also means you’ll need to think about that money! Where is it coming from and how are you going to make more?!
What about those clients, they aren’t hanging from trees, so how are you going to find them, talk to them, and sell them on your product or service. The longer you spend researching your business ideas and creating a solid plan, the easier it will be to move through every other phase of the business.
As you move through all the phases of building your business, remember to go back and review your business plan to ensure you’re creating the company that reflects your plan. By continually examining, you’ll see progress and keep close track of hitting goals and milestones. It’s like when you start working out at the gym, you begin to see progress, and you want to evaluate the improvements from where you started.
You’ll also monitor whether you’re moving off track, it’s easy to veer off in a new direction, it’s called scope creep, and it can cause you to lose money, quality of your product/service, or time. Nobody wants to lose money, quality, or time, so keep a close watch on your plan and the steps you’re taking to move it forward.
I like to use the reset for people who have been in business for a while but feel lost and stuck in a rut. I usually have a client write a current state business plan using the short-form, Lean Model Canvas, without any input from their original business plan.
This process allows the small business owner to see exactly where they are and forces them to identify the gaps where improvement are required. It’s natural to stray from our plan, and using the reset often pushes the small business owner back in the right direction.
Common Gaps that Creep into a business plan:
You haven't adjusted your pricing structure for years, and it's no longer serving the financial needs and goals of your business. This is an easy fix. Go back to your fixed and variable cost and adjust your numbers based on updated information. You could have higher or lower variable cost now that you’ve been in business for a while, or you might have moved offices and have higher or lower rent and fixed cost. It’s important to make sure you continually update your accounting to ensure your pricing remains profitable. Though we don’t cover how to price your product or service, we do describe the financial terminology in Phase 1 of the SBSUG.
Your marketing plan isn't current and in-tune with your audience, and as a result, it isn't driving traffic from your ideal client to your door. Take a look at your social media and marketing analytics. Are you reaching your target audience? If not, how can you adjust your marketing efforts to ensure the highest ROI? Create a new marketing plan based on that answer. Michelle goes into a ton of detail about marketing in Phase 3 and 5 of the SBSUG.
You need a partnership to take your business to the next level.This one isn’t as easy because adding a partnership is a big deal and shouldn’t be taken lightly. However, it can be advantageous to expand and try new ideas. There’s more information about partnerships throughout the SBSUG.
By following the three “R’s”, you’ll find the remaining phase of building your business to be much more enjoyable. Not only will you have a solid business plan, but you will create action plans for those gaps discussed. The SBSUG goes into so much more detail, have you grabbed your guide?