Starting a business can feel confusing, and can quickly become overwhelming. For some, a business plan is the solution to all these problems.
I have to agree that, on paper, it does sound pretty good. But I’m here to warn you: A business plan is not always what you should worry about when you’re ready to embark on the entrepreneurial journey.
Back in my corporate days, I worked on more business plans that I’d dare to admit, and let me be brutally honest: they all ended up in a drawer, never to be used again.
You do need some sort of plan, though, so let’s jump right into why a business plan might be the last thing you need, and what can you do instead to set up your shop for success.
Why having a business plan is the last thing you should worry about
1. Things never go as planned (and it’s perfectly okay)
A business plan assumes that you know things that you don’t know yet -- and that no one expects you to know yet.
It can feel a little like writing a travel diary before you’ve actually been on your holiday: you can guess what places you’ll be visiting and the food you’ll be eating, but you have no real idea of what the journey is actually going to be made of.
2. There’s no room for experimentation
Business plans have a very ”set in stone” tone, when in reality starting a business is more about making the best possible hypothesis (on your product, your prices, your audience), getting out there and testing it out, and then re-assessing and changing direction if needed. It’s all trial-and-error.
3. You’re a one woman shop, not a board of directors
Corporate business plans include things like loss and profit planning, key personnel to hire, and other metrics aimed at appealing investors, and creating consensus amongst all directors.
As a solopreneur who likely isn’t trying to appeal to investors or a board, any plan that you have should be customized for your situation. It has to be written for you, by you, and with your own words. Not for a bank; not for a board of directors.
Where does that leave us? We know that business plans can be a waste of time for solopreneurs. But, no plan at all is a five-star recipe for disaster. I have an idea.
The better alternative to a business plan for solopreneurs
Rather than a business plan, create a workflow that will allow you to focus on what’s important. Something that:
- Makes sense for where you’re at in with your business;
- Is actionable and revisable;
- Won’t let you quit
Here are some ideas:
1. Use the “3x4 makes 12” rule
As a solopreneur, you wear two very different hats: the boss hat, and the employee hat. But it’s not always easy to know when to work for your business and when to work on your business. Hence, the 3x4 makes 12 rule -- or, how to grow and reach your yearly goals.
12: Once a year, write down your objectives. This will take time, but it is crucial. Be as specific as possible. If one of your objectives is to increase your sales, note by how much? If you want to grow your email list: How many subscribers do you want to reach by the end of this 12-month period?
3x4: Every 3 months (so 4 times per year) look at your 12-month goals and ask yourself: What do I need to do in the next 3 months to get closer? This quarterly assessment allow you to stay focused on your yearly goals, while making room for experimentation.
Once you have your 3-month plan (based on your 12-month plan), break down your objectives into small, actionable tasks organized by priority, and focus on doing.
2. Focus on what matters, not on what will matter a year from now
If you want to make progress in your business, you have to prioritize. It’s tempting to work on everything at once, especially in the early stages.
But the truth is: You don’t need to spend four hours on social media per day, while building your products, while setting up paid traffic campaigns, while trying to designing your website, while doing client work or fulfilling orders, while producing regular content. (Editor’s note: We promote sanity around these parts, not craziness!)
To avoid the frenziness, take a step back and ask yourself: What is important right now? Don’t get ahead of yourself and keep it simple: one little, but meaningful, step at a time.
The path to a profitable and successful shop is a different journey for every business. The key to doing what’s important right now is knowing what phase of business you’re in, and doing what makes sense in that spot. I’ve outlined a few stages and some ideas of what’s important in each, below.
The direction stage sets the base. By doing some research and strategic thinking from the get-go, you can be confident that what you build upon it will have a solid foundation.
The things you want to focus on here are defining your target market, business mission, vision and values. This is also a great time to take a look at the competition and understand your business landscape: are there any influencers or trends to know about? Finally, this is the time to evaluate your product idea before you dive in and create it.
You’re ready for the next stage if: You’ve defined your ideal customer, as well as your business mission and vision with clarity. You have an understanding of your business market/landscape. You’ve validated your business idea.
Set up stage
This is the time to register your business, make sure you’ve got your legal basics covered, and set up a system for managing your finances.
This is also a great time to get a basic brand identity and website together. This can be tricky because it’s easy to get caught up in it and spend hours and money on more than you need right now. My advice? Start small. You’ll have plenty of time to expand this later on.
A basic visual identity with a logo, a color palette, and a couple of fonts is enough to streamline your brand without necessitating too much time and money. Same goes for your website.
Finally, this is the stage to package up your services or, if you are selling physical products, create a minimum viable product and price it.
You’re ready for the next stage if: Your business is set up from a legal point of view. You have a system for the management of your finances. You have a basic brand identity. You’ve packaged your services and have a starting pricing strategy.
This stage is about bringing qualified traffic to your site, marketing your products, and getting a few sales in.
Bringing traffic to your site and marketing your products can be done in many different ways. Using the customer research you’ve done in the first stage, pick the channels that are the most likely to bring qualified traffic to your site.
This stage is the hardest because it’s easy to feel like you have to do all.of.the.things at once. To prevent this, remember the 3x4 rule and pick only a few channels to focus exclusively on for three months at a time. Four times a year, re-assess.
You’re ready for the next stage if: You have consistent traffic coming to your site and a growing list of email subscribers. You’re getting a few sales.
Additional note: It’s normal for this stage to take a lot of time. Remember to re-assess every three months and stay focused, and don’t be afraid to experiment.
This, solopreneur, is where you’ll likely spent most of your business life once you’ve successfully set up shop through the first three phases. With traffic and a few sales, it’s time to tweak and improve what you’ve built, in order to improve your sales and your following, and to diversify your offering.
All these fancy or more complex things that you probably wanted to do right from the start (like playing with more social media networks than any normal human being can handle, testing and improving your conversion rate, and beta testing new products) finally make sense now.
Your support system
Yes, you need to pick a direction, have a vision, and build an action plan around it. But you don’t have to have a formal business plan. Knowing where you’re at in business and creating a plan that allows you to stay focused on what matters trumps a formal business plan any day.
Surrounding yourself with like-minded entrepreneurs can make this even more effective.
Most importantly: You have to start -- even if you think you’re not ready. Trust me, no one truly ever is!
Latest posts by Deborah Engelmajer (see all)
- You Don’t Need a Business Plan, Solopreneur. Do This Instead. - August 30, 2016