Before the Business Plan

Purveyors of conventional wisdom would have you believe that the very first thing you ought to do when setting up a new business is to create a business plan.

It doesn't matter whether you are selling odds and ends on eBay from your living room or something larger and more complex,

Business plans are excellent and necessary. Far too few of us self-employed and freelance people use them.

They force us to spell out our objectives. We have to assign numbers to our expectations and assign a time-line to our goals. They become our roadmap keeping us on track.

But I suggest that you can't make a business plan that is worth anything until you've done your homework.

And that means knowing what you want to do and how you want to do it. And determining that there is sufficient demand for your product to generate enough income to cover your costs and allow a profit.

In other words, before the business plan comes research.

If a body of knowledge already exists, it makes sense to tap into it and save yourself some work. The US Bureau of Labor Statistics and other such sources, for example, publish a great deal of demographic information. Some of it is very useful.

But it is also likely that as a creative sole-proprietor, meaningful statistics don't exist about your specialty.

Many micro-businesses target a very specialized niche. And many owned by creative types exist to sell a product or service that don't follow well-worn prototypes.

It is particularly difficult for such people to find meaningful published data.

If you fall into these categories, you'll have to generate your own information.

There is more to your research than just the purely business information. You are building a life as well as a business.

Are the demands and conditions of your proposed business compatible with the life you want to create?

For example, illustrators often work on short deadlines - meaning that sometimes they have to work far into the night to complete a project on deadline. Plus, some clients are demanding and not all pay on a timely basis. After all of that, can you still "love it" enough?

Or, maybe your business is such that sales fluctuate during the year. How will you make it through the lean months? Can you handle the uncertainty?

So, how do you find information?

First, if other people provide services similar to yours, talk to them. You can gain a lot of information quickly. Their answers to your questions will save you a lot of legwork and open your eyes to factors you may not have considered.

You can find them through trade associations, schools, word-of-mouth. If the locals are reluctant to share information - perhaps because they see you as direct competition, consider finding similar people in a different locale.

Second, create the information you need.

Mimic and simplify what the 'big boys' do. Reduce their methods down to a level that is practical and affordable.

For example, perhaps you want to survey potential clients and customers to get feedback.

It will probably be neither affordable nor practical to commission a focus group. But you may be able to speak to potential targets informally or use direct mail to send a simple survey.

Eventually you'll have to 'put your toe in the water.' Try it out in a small way - so you won't lose much if it doesn't work - and observe the results. Then experiment and modify as needed. Once it works to your liking you can plunge right in.

This approach, known by the technical term "trial and error" can be applied to any facet of your business.

After all, even the largest producers test market new products before rolling them out.

Put some parameters around your efforts. Decide, in advance, how much time you want to allow and how much you want to budget.

Then test, test, test.

Use trial and error for every aspect of your business. Experiment with different ways of packaging your services, different rates and prices, different types of marketing, etc.

You'll soon find that certain approaches work better than others. Eventually your data will suggest your strategies.

And then you'll be ready to create your business plan.

Ellen Zucker's website http://www.selfemployment101.com is designed to help the creative sole-proprietor earn a living and have a life.

Have Ellen's articles delivered to your in-box. Subscribe to her ezine The Self-Employment Lady.

RELATED ARTICLES

Customers - Why Should They Buy From You?
There are a whole range of reasons why customers buy a product or service. They usually buy to solve either real or perceived problems. They want to move away from pain and towards pleasure. They want to feel better after having made the decision to buy a product or service than they did before.

Entrepreneurs - Your Well Being Should Come Before Profits
I believe the spiritual aspect of life, especially to entrepreneurs, is very important. While business may be the focal point for an entrepreneur's life, it's your outlook on life that shapes what kind of person you are.

Hurricane Katrina, Death, and a Different Type of Entrepreneurship
I've seen terrible images today on the television and internet-bodies of the elderly and infants floating in attics, buildings collapsing, seals washing up in the middle of highways. All I can say is that our thoughts go out to those in New Orleans, Gulfport and surrounding areas in this sad time. We will keep the people who have been hurt or passed away and those who were close to them in our prayers today and in the weeks to come.

Before the Business Plan
Purveyors of conventional wisdom would have you believe that the very first thing you ought to do when setting up a new business is to create a business plan.

Differentiation Strategies for Franchise Companies
With the growing number of franchise offerings recently it is difficult for the smallest franchise companies to compete. They generally do not have the advertising budgets to pick and choose which markets the franchise prospects will be calling from. Many rely solely on Internet Marketing; unfortunately 80% of such leads are not so good. On top of this obstacle they must compete with sales departments of larger franchise companies, which have lots of experience.

What Makes an Entrepreneur?
Rupert Steiner in his book 'My First Break' attempted to define the secret of becoming an entrepreneur and following interviews with over one hundred entrepreneurs, Steiner concluded that there was not one defined path. He has, however, drawn out observations of an entrepreneur's personality traits. They have a tendency to be rebels, outsiders, original thinkers, risk takers and break new ground. Entrepreneurs are always on the lookout for new business opportunities and have the guts it needs to start up a business. They have total commitment to what they are doing, which verges on obsession behaviour.

The Perfect Little Coffee Shop: Are You Afraid of Failure? Are You Letting that Failure Cripple You
Ah, coffee, the drink of choice when I want to share a special moment with friends, when I want to sit and ponder life or when I want a moment alone. I am an avid coffee drinker. I love coffee and I love the atmosphere of a good coffee house, a café.

The Entrepreneurs Prayer
As I awaken with the gift of yet another day and prepare for the tasks at hand, I offer up this most ardent prayer:

Prescription for the Future and Technological Revolutions
The world sure has changed in the last two-decades hasn't it? When I started out in business, there were no cell phones, fax machines, computers, etc. And I am not that old, having just retired at age 40. Indeed, in the better part of two-decades everything changed. And it is still changing and moving along. What will the next two-decades bring? You can probably figure it out with a little thought and watching the trends, new discoveries and think of what kinds of things the military, health care, entertainment and government industries will want. I recommend this book which foretold much of what we see now about a decade before we had it:

Defining a R&D Framework for Entrepreneurship and Innovation on Information Product Generation
Introduction

Walt Disneys Failures Could Inspire Entrepreneurs
You are a struggling entrepreneur and sometimes it feels like you are pushing a 3 ton boulder up a steep hill. Costs keep mounting and you are considering giving up. Well before you do, check out these 10 setbacks that Walt Disney had, some were financial nightmares that put him millions of dollars in the red:

Do You Have What it Takes to be a Successful Entrepreneur?
Print off this page, take the quiz and find out if you've got what it takes! See the scale at the bottom to mark yourself.

Herb Filled Pillows Make Over a Million Dollars
Lauren Rosenstadt was a single mom working at a herbcompany in Bethesda, Maryland. A herb (pronounced "erb") isa plant that has medicinal, savory, or aromic qualities. Oneday while at lunch with a friend whose daughter sufferedfrom insomnia, Lauren thought, "If I could fill a pillowwith herbs, that would be soothing and help my friend'sdaughter sleep."

The Business and Life You Want to Build
In the early days of my first consulting business, I knew I needed some sort of plan to give me the greatest chance at success. I took many a wrong step, yet in the end I managed to put a solid business together.

Realism vs. Optimism in the Business Plan
The most important function of a business plan is to create interest among investors so that they write a check. In achieving this goal, business plan writers are often challenged by determining the proper level of optimism in their plan. That is, they must create a compelling story to investors while maintaining credibility.

Build Your Own Board Of Experts
The most successful entrepreneurs rely on their advisory boards to help spot new opportunities and potential pitfalls.

Message to Prospective Franchisees for Franchisors
Many franchise companies fail to send the proper message to their prospective franchisees. This is partly due to the over regulation and intensity of litigation in the industry. Smaller franchisors are generally hurt the most from these factors and consumer or buyers of their American Dream seem to feel slighted at a the impersonal approach. Many franchise company's sales departments walk a fine line between disclosure laws and the information they are allowed to depart to the prospect franchisees. This immediately causes friction. To alleviate this problem smaller franchisees need to send a more personal message in the name of their founder to re-assure prospects that they care. Below is a sample letter our company, The Car Wash Guys, www.carwashguys.com , has used to allow our prospects to see thru the legal quagmire created by the regulatory bureaucracy and the franchise lawyers in their haste to sue franchisors. I recommend you copy this article read the letter a few times and put it into your own words so that you convey how you truly feel, make it sincere and understand that your prospect needs to know they are more than just a number.

Selecting a Venture
The basic rule is simple: "Find a market need and fill it!" The process of finding the need, and the method chosen to fill it are where the difficulties arise.

Reducing the Stress of Being an Entrepreneur
Starting and running your own business can be exciting and rewarding, but it can also be very stressful. For most of our almost 40 year marriage my husband has been an entrepreneur and I have sometimes worked with him. Having built my own business as a Stress Reduction Coach I have been reflecting on the stresses of being an entrepreneur.

Are You An Entrepreneur?
With all the buzz about everybody being an entrepreneur these days wouldn't it be nice if you could really find out if you have what it takes?

Home |Site Map