Episode 3: Transcript
Writing a Business Plan using the 5 Pillars of Success.
You ever hear the saying “Someone’s sitting in the shade today because someone planted a tree a long time ago.” Well – I am willing to bet that someone had a plan! And that is what we are talking about today.
Writing a simple business plan is going to decrease future stresses and overwhelm so you can move forward confidently with a plan in place.
So many new entrepreneurs skip this part of starting a new business – and I think it is a HUGE mistake. Creating a business plan is something that I find truly inspiring and love doing. I visit mine regularly, and basically treat it as a living document, updating and tweaking it as both my business and my goals change!
Now you have a rock-solid foundation on which to build your business – let’s start planning it! Your business plan is going to help you create the business you want. You don’t want a business that becomes just another paycheck, you don’t want to start your own company just to have another job – you want a business you love, a business with purpose and that is why I am going to help you write a simple but effective business plan focusing on five essential pillars for success.
So, let’s get started!
Why is a business plan all that important? Especially if you are looking to be a micro business or solopreneur and don’t plan on applying for grants, bank loans or look for investors? I will get to that, I promise. First, I want to talk to you about a quote I heard recently. During a speaking engagement, Werner Erhard once said “If we don’t change our direction, we’re likely to end up where we’re headed.”
Let that sink in.
“If we don’t change our direction, we’re likely to end up where we’re headed.”
Now, I get it – if you are going one way, you will end up where you are going and if you change your direction, you are still going to end up where you are going, only now you won’t be going where you were headed the first time.
So the quote is nonsensical or even ridiculously impractical BUT it is saying something that I want you to think about.
That is – starting a business without a business plan will still get you a business. You will still make sales and who knows – you may become the next Sara Blakely. But like I said – who knows…
Now, if you change direction and create a business plan, you know that you will be giving Sara a run for her money. 😉 Because your plan is going to give you the direction you need to get to the end goal you set.
That is why you need a business plan and why I am going to help you write it!
Your business plan is going to cover the 5 essential pillars or key elements that every business needs. These 5 key elements are – People, Product, Purpose, Promotion, and Profit. If you don’t have these five things, you don’t have a business. You have a hobby.
Now, it is time to get to work.
The human element is the most important yet always forgotten part of a business. Most entrepreneurs get overwhelmed and sidetracked with marketing, bookkeeping, product, tech, etc. But when you think about it, every part of your business boils down to people. By understanding the human element, you will be more profitable, create brand loyalty, close more deals, and ultimately be more successful.
The first and most important person, on your people list, is you. You cannot start building a dream business and build relationships until you are working at maximum capacity. If you aren’t at your best, your entire business could eventually collapse. So, be sure you are taking care of both your mental and physical health to the best of your abilities.
You are also going to need to be at your best when it comes down to what you are good at – and be honest about what you are not so good at. Because if you are not great at something, you will put it off and it could be a vital part of your business. Do this by completing a SWOT Analysis. This is a simple but useful way for you to focus on your strengths and take the greatest possible advantage of opportunities available to you.
What exactly is a SWOT Analysis? It is simple. Swot stands for Strengths, Weaknesses, Opportunities, and Threats. What makes this especially powerful is that, with a little thought, it will help you uncover opportunities that you would not otherwise have spotted. When you start your business by understanding your weaknesses, you can manage and eliminate threats that might otherwise hurt your success.
When doing this, consider the answers from your own perspective and the perspective of others around you. Don’t be shy – dig deep and be honest.
- What are your strengths? What advantages do you have that others don’t? Such as skills, certifications, connections. What can you do better than anyone else, what achievements are you most proud of?
- What are your weaknesses? What tasks do you tend to avoid because you don’t like doing them or lack the confidence in your ability to complete them? What do people around you see as your weaknesses? What are some personality traits that might be holding you back?
- Looking at Opportunities, what new technology is out there that can help you, who do you know that will be helpful to you on your journey? Is there a need in your industry that needs to be filled?
- When considering threats think about any obstacles you may face, competitors, could any of your weaknesses lead into a form of a threat?
Once you have completed your SWOT Analysis you can turn it into actionable strategies to help your business grow.
- Use your strengths to take advantage of opportunities and minimize threats.
- Improve weaknesses by taking advantage of opportunities, or outsourcing to someone who has it as a strength.
- Work to illuminate weaknesses to avoid threats – be pro-active, not reactive.
Hopefully, when you have done your analysis you will be able to see any roadblocks long before you hit them.
Next, your customers! We’ve all heard how important it is to create your client avatar or dream client. Knowing who your ideal client is going to be knowing both who you want to help and who you are really excited to work with, but most importantly, who can actually afford to buy your products or services. In the beginning, you may want to help everyone with your products or services and be less focused on your ideal client. It is extremely important to be very clear about who you want to reach.
You may already be clear on who your ideal client is or you may have some work to do. There is a lot of information out there about how you should create an actual person, give her a name, birthday, a family, know the names and ages of her children, what she does for hobbies and what shows she watches, and when her anniversary is.
This method works very well if you are able to create and believe in this person so deeply that anytime you make a decision on a new product or create new copy you think to yourself “would this speak to…you should give this person a name. Would this speak to ‘Clientina Moneyspender “?
If this method doesn’t work for you, then think about and focus on the problem you want to solve and who needs your help solving it. You may want to help everyone with your products or services and be less focused on your ideal client but over time it will need to become clear exactly who your target audience is so, be sure to revisit this every few months and with every new product or service you are going to offer!
Now, your competitors! Whether you want to admit it or not, they are out there and they are hungry for your customers. Just as hungry as you are for theirs! And while it might seem like too much, given everything else you need to keep on top of while building your business, you do need to consider dedicating some time and energy to keeping tabs on or at least checking out your competition.
If you do this, on a regular basis, you will get to know their behaviour and start to anticipate what they may be likely to do next. This will help you gain what is called competitive intelligence. The idea is to plan your own strategies so that you keep your customers and maybe win (not steal) some new ones. Therefore, doing a little recon and keeping tabs on your competition is an important strategy for growing your business and gaining success.
If you are providing products or services, it does not matter. Health coach, Multi-level marketer, Taro Card Reader, Artist creating pieces out of discarded highlighters – whatever industry or narrowed down niche you have decided to focus on, you need to be crystal clear on what exactly you are providing to those in your people plan.
Remember, your business is not about what you want or your needs. It is about your client’s wants and needs and about how are you going to fulfill these for them.
Discovering the purpose of your business is the first step to creating your business plan. Why do you want to start a business? I want you to seriously reflect here, “to make money” or “to be my own boss” is not the true answer. Yes, these may be a part of your reason, but they are not your “why”.
I am sure in all of the research you have done about starting a business that you have come across a hundred articles telling you to understand your why.
Why did you start this business? If it was just to make money – if that was the case, you could be a nude model and pose for sculpting students at the local art college. If it was just to be your own boss – I need to ask you really? When you were a kid, would you yell “You are not the boss of me!”? Of course, you did, we all did. Because we truly believed that we were already our own boss, am I right? When did we lose that? Sorry, I veered off track, your purpose relates to your “Why” as a business. To quote Simon Sinek, “People don’t buy what you do or how you do it, they buy why you do it.”
Your purpose should be a large part of everything you do. Every decision should be looked at in terms of purpose and your purpose should impact every aspect of your business. This is why it is the first element of your business plan.
So, reflect, come alive and take a moment to determine your true purpose. Why did you pick this business and why are you taking this action and starting this journey!
This portion is your marketing plan. When you are pushing your business, people can tell. It just does not work. Gone are the days of just shameless promotion, because it is transparent and people tend to feel they are being conned. So, today you really have to love your work and believe in what you offer. Being 100% authentic when sharing your message will allow your purpose to shine through and be able to sell a product or service without being sales-y. (Is that even a word?)
When I first started in the photography business, I was working with my mentor and was able to sell him like he was going out of style. I believed in him, his work, and his values. I knew his clients were getting the best of the best in both product and services. When it came time for me to leave the nest and go out on my own – the struggle was real. I didn’t believe in my capabilities as much as I did his. My lack of confidence shone through, my inexperience was obvious and my sales were horrible! It wasn’t until I really started to love my own work, have confidence in my own strengths and started to build my weaknesses into assets, that my business started to skyrocket. My point is, the more you love and believe what you are offering is going to help your customers, and the more real and honest you are, with yourself and your customers, the more people will trust you and want to work with you.
So, when you are creating your marketing plan, create a marketing message with confidence, authenticity and honesty because that is exactly what your customers will be looking for.
If this is intimidating, don’t let it be. With this part of your business plan, I will help you create a system so that you know what you need to do in order to reach your financial goals.
When I was ready to leave the corporate career and go back to being self-employed hubs and I had a talk. My new business had to bring in a specific amount of money before I could give notice. So – that was my goal. Working backwards from that number helped me figure out what I had to do to generate that specific income goal.
You do this by starting with your Annual income goal and break it down from there. With that amount in mind, what is your monthly target, and then what is the weekly target? What do you need to do, how many products, courses, programs, whatever(s) do you need to sell, per week, to reach that amount?
If you already have or know what your expenses are, do the same for them because it will give you even more clarity you need to reach the end goal. If you do not know – that is okay, we are not creating a budget here, we are just creating a simple profit plan to move your business forward.
I do not doubt, this section will involve some frustrating number crunching. But, whip out that calculator and tackle it head-on!
There you have it – The 5 essential pieces every business needs to get started on the right foot for success. A simple business plan that covers People, Purpose, Product, Promotion, and Profit!
If you are still listening and have made it all the way to the end, I applaud you and THANK you for sticking around. Creating a business plan, even one as simple as this is probably the hardest part of starting your own business because it requires restraint, patience and vision. I am so excited for you to start creating yours and extremely proud that you are going to! Now go and celebrate this accomplishment!
Be sure to download my FREE Business Plan Template, for you to simply follow and fill in the blanks for your first business plan!