Ah, business plan! What?!
My sentiments exactly. But, the good news you’re going to hear from me is that you don’t need a business plan – or not a 40 page pile of rubbish full of SWOT and graphs in the traditional sense.
Business plans are all talk. You can’t build a reputation based on what you’re planning to do.
There is only ever one reason to write a business plan; You need funding. Be it a bank, investor, family/friend (maybe), if you need money to start your business, you’ll need a business plan.
If that is the case, go find a free example on the web, and spend the next 37 hours of your life doing your worse.
So don’t bother. A study in 2006 in an american university based on over one hundred business start ups also showed that those who created a business plan did no better off than those who didn’t (if you needed some reassurance of my flippant words).
Most of what you need you’ll know already in your head, you just need to formalise it. Don’t be afraid to tell others this; it’s not a cop out. Spending days, weeks months on a business plan will hold you back from going for it – that’s the real cop out.
So what do you need to do? The really good news, if you have been following this guide and completing the workbook with it; you’re already creating the business plan! We just need to take a look at some numbers.
That’s right, sorry. We need some Profit and Loss projections. We’ve kept this as simple as possible, and have created a template for you to use, here.
We always recommend 3 of the same Profit and Loss. The Good (best case), The Bad (middle case) and The Downright Awful (worse case scenario).
This way, you can plan for the worse case scenario, but know that the middle will be most likely.
The costs will be fairly straight forward; you’ll know what you need and can find out prices. But how do you know what your sales will be? And that, is what we mean by guess work; you don’t know, and will never know until you’re in the thick of it.
That’s why we have 3 scenarios.
Go back to your vision. What does it include? If you achieve these goals, how much does your business need to make to do so?
I’d use this as a basis for your Sales. Use them as targets, and work backwards.
For example, if you want an income of £5k per month, how much do you need to Sales to be in order to generate that much profit for you to take £5k per month?
Complete the P/L template for the first year for The Good, The Bad and The Downright Awful. You can find this here.
Don’t forget, look out for our next blog in the series: Branding
If you missed our previous blog in the series, Breakeven, take a look here.