What's In Your Plan Overview?
The plan overview gives you a definition of the nature and purpose and mission of your business the mission of your business what is it you? Lauren is very clear about the mission, brigitte your very clear actually you're each very clear you're very clear about the breast that's of the mission of your business but that particular line um it's important to know what drives your passion for this and to make sure that nothing no decisions you make harm that that mission on and then the products and services that's more nitty gritty than the mission, the mission is the mission and vision of that beautiful in product you're aiming to achieve, but the products and services are what you'll sell to keep yourself in business so that you can keep upholding that mission and vision your point of meaningful difference the opportunity you intend to seize lauren you're talking about an opportunity of an unfilled marketplace for purity products are pure pure business products or I'm probably not sayin...
g that quite right but beauty products and how people personal care products okay, but pure it's right about an ingredient with onley beneficial ingredients that's what you're intending to seize and it becomes something you need to seize before someone else does if no one else is and that's part of the market over viewing conditions to be sure that nobody else already has a corner on that market and if they do, then you have to differentiate. There is a a company that has opened that seems to be doing successfully. But it's, not domestically made handmade products. Okay, not that's. Put my chase it's, somebody making it in a factory interesting. And then the goals you plan to achieve that's in the overview, the business environment is a summary of your knowledge. Each of your business arena. What are the trends? Technologies, regulations, barriers and market conditions and it's really worth it? That's how you begin to know whether to adapt j whether to seize changes, if you know your business arena and what's going on and all of a sudden there's some new technology that seems like it would be interesting. Well, if you think it's going to end up taking over the field, get it fast so that you're not you served, you know, taken over by it. Regulations for sure. Barriers to entry are an interesting thing. Barriers to entry involved. Anything from other people already having a corner on this market that you need to work around or you building a corner on the market. Sometimes getting a certification builds a barrier to entry to someone else honing in on your business, gaining strong brand awareness. Build a barrier to someone else coming into your arena, and I would think lauren, in your arena, it may be one that you're going to want to really pursuit if if you really going to build this into something to build a brand so strong that somebody else can't just start doing it to without having to really invest heavily in knocking your business out of the way, which you can just fortify around by continuing to strengthen your brand brand awareness is going to be real important for your business brand is a huge differentiation in business planning success because people work with businesses they trust, and you're going to see this some more in the freelance section. But they trust trust is another word for brand. What they believe about you is your brand, and if they believe your trustworthy, they're more apt to choose you over others and that's a barrier to entry which you need to build competition. How much? How many trends and point of difference and it's, so easy to overcome toe overlook the importance of the competitive environment photographers I know there are a lot photographers tuned in and there's one that the competition is now everything from the iphone tio what you khun, you know, by free online and to what you can buy from that photographer whose business we're talking about, so it really comes down to a point of difference. One would they and you struggle me, your industry struggles with it, doesn't not tara, completely oversaturated it's, saturated with people that know what they're doing, and a lot of people that don't know what actually now. So brandon and point of differentiation, very important customers. Who are they? When do they buy? Why do they, by how much, how and how much do they buy and how to reach them? And this is important to know, because this helps you determine if your ideas even valid. This all helps you decide if your ideas valid, but this fits right into the business model. If you can't reach him, you can't sell him if you can't sell him, your business model won't work, so you can't spend too much time on this segment instead of developing the next great idea spend a little bit of time saying, what business environment do we work in? Because, in fact, remember the first thing on the idea where new ideas come from customers. So the more you know about your customer, the more apt you are to come up with an idea that suits that customers wants needs buying patterns, motivations their fourth that supports your business model. From the rainy day story somebody who actually joins us regular welcome back I know you've not being too well actually so welcome back really pleased to your joining us in two thousand fourteen and things are going well for you they're saying they have an ebay business that they established in two thousand eleven they researched their niche market which is plus size clothing and they found a really great need and the sales whether in recession or economic boon they have continued to come the clothes have sold so they also realize selling all types of clothes year round has been really beneficial to them as well all types of clothes you around but to that consumer niche yes plus I see they have a point of differentiation um and they probably have a reputation of cool clothes so when in doubt find your customer find how you can meet a niche need narrow, narrow narrow focus is not only important in developing ideas it's important in developing ideas you take to customers because customers believe it's easier to get them to believe that you are very good at something specific then it then that you're very good at everything what's in the strategic overview section of your business plan how you'll succeed how you will succeed what are your strengths, weaknesses, opportunities and threats? What are your revenue approaches? What are your goals and objectives here? Marketing plan overview your growth plans and strategies and your exit strategy I wish so badly that every business operated with an exit strategy in mind how some day am I going to quit doing this and profit and often it's a bit often it's the sale of a business but if not a business maybe the sale of a product maybe something that a product that can live beyond you or that you can quit doing what you do on an hourly basis and the product can continue to be your revenue source but it's really worth it to have a personal exit strategy whether you out landed in your business plan or not and also if you have an investor's you have to have an exit strategy for them to know how do they get their money out what their exit strategy I will pay you back in one year too a personal loan or or I will you will get twenty five percent back to an angel investor so that's what's in the strategic in the business description you have to say what do we sell and how do we sell it and I tell you this is a hard thing for a lot of business is to really come down to what are we selling how do we sell it? What capabilities set us apart and capabilities in business really mean eight things research and development operations marketing distribution and delivery customer service management organization in financial condition and in the strengths and weaknesses opportunity analysis, I go into this again, but you need to know where your strengths are because let's say you have weak financial condition and you want to deliver develop a product that takes investment, the's air incompatible desires, you have no financial strength and you need money so therefore your whole plan needs to be, how are we going to boost our financial strength to fulfill this dream of a new product? So you have to be realistic about what you're good at if you're not good at organization and you are trying to build a great big affiliate marketing program, who's going to organize that you need to build organizational strength first, and this is a little more how to run a business. But it's, very important in a business plan you'll see in a few minutes what goes into the fans overview. You need to have an income statement who here has income statements already see who was running their business out of their checkbook. If I asked the online audience a lot of hands would go up, you can't run your business, have your checkbook and call it a business. You absolutely need to divide those two, and we'll get into that in the business structure, but you need to have income statements and projects. And then the only way you're going to do that is to separate personal business spending so you know what is your business really costing you need a balance sheet which is a snapshot of your business worth what we owned, what we owe and you need a cash flow statement and how you'll manage the startup period or if you're developing a new product or whatever how you will manage that product ramp up period that just tells when does the money come in? When does the money come out and there go out and is the flow such that we can tide ourselves over? Do we need a line of credit or something like that? Because if you don't have this, you run the risk of running out of cash and I said earlier priority number one is don't run out of cash, which is the other reason you have to get your business out of your personal checkbook. You absolutely have to because you don't know when you're out of cash you just keep writing the next check because you're you're not differentiating between grocery money and business money and so you have to have them separate and then your business builds up and you pay yourself a distribution or a salary or whatever and that goes into your checking account to buy the groceries but you know and every now and then you may have to write a personal check into your business and when you do it goes in as a loan that gets repaid like every other loan and you could only do that if you separate the two and you need a financial forecasts and assumptions and this gets back to your question how do you know when to leave your strategies and pursue a new cool strategy? Well, for one thing you look at your financial forecasts and assumptions and what were you assuming what happen in this financial model that works. And if you take on this new idea, what does it take out of that model this financial forecast and does it put enough back in to make it worth it? So you end up with the tools you need to assess ideas accurately? No there's the snowflakes, no two business plans of the same everybody has to do something different. Startup plans need to take a lot of effort on the idea and how it will develop in scale. They need to go into the business model and forecasts for how they'll monetize. When will they? How will the money come in? When will the money come in? Will there be enough of it? They need to go into what startup funding will be necessary and what will investors get in return? And for everyone who is a very, very, very small business, bootstrapping are funding their own the reason to consider it alone is to say before you put that next one thousand dollars into your business after you separate personal and business spending and the business needs money to pay its bills, it needs a thousand dollars before you put that thousand dollars out of your checkbook in you say to yourself what I loan this to someone what I loaned this thousand dollars because I'm loaning it to myself what would I ask for what I asked for? Ten percent return if so, then you need two thousand ten dollars back you need to have confidence that by giving them business a thousand dollars you're going to get personally a thousand ten dollars value doesn't mean you'll really pay yourself back with interest but that you'll build an asset such that it's worth more than what you put in you need to treat your money like that and there's we'll get into this later but you need to put a cap on how much of your own money you put into your business. Warren do you go into this as you consult with clients? Oh that's typically what the financial advisers did but we would always talk about budget and you know what they were even willing to spend at least from a marketing point of view but yeah it's a piece of what we but it's not a piece of what my focus is and if you have financial advisers that's even better, but a lot of small businesses don't have financial advisers, so they have to be their own financial advisor and say I am willing this idea is so good in this business is going to make so much money based on my financial forecast I'm willing to put up to five thousand dollars in total up to fifty thousand dollars or whatever and one of the questions that we ask ng litmus test for your business planets are you willing to re mortgage your house for do you believe so much that this is going to be profitable that you're willing to re mortgage your house fourth yes, something that came up for me um in feeling like I needed some help like I wanted hire someone for the front desk I wanted business manager to help me book my retreats, air my festivals or whatever and there were certain things that I couldn't necessarily justify hiring someone because someone once said if you're going to pay someone to do a job for you, you have to quadruple or, you know, get a massive amount and return to compensate not only what you're paying them but then then some so I justified like a book keeper because that's really not my zone of excellence and I knew it would just take a lot of time in frustration to handle all that but I didn't necessarily get a front desk person, but then I got a retreat manager who cuts a bit off the top and so it's interesting how to invest in in help as well to grow building a team, right? And in some ways that the way you hired your retreat manager fits into a business model because rather than paying the business manager she's almost as a commission that you'll get ten percent well, at that point, you've really bet on your business that that it will draw the kind of revenue that ten percent of it or whatever you're paying ends up making it worthwhile for this person. And you couldn't do that without some sort of a business plan because you couldn't have I've told the business manager you couldn't have conveyed what you needed to convey to that person for them to have the confidence that whatever commission you're offering is enough to make it worth well without having done the projections, how much started funding you'll need, and what will investors get in return? How and how quickly you'll reach growing numbers of customers and sales? And I think a lot of us are a lot of business startups are unrealistic in how quickly they'll reach and it's really worth it to do some study talked to some prospective customers if you learned about this right now. Would you buy it? How would you buy it? How many layers of organization it wouldn't have to go through? How long would it take before the purchase was made? Because that allows you to start doing some cash full perfect projections? When will the money come in your management team and capabilities start ups and need to know who's going to be with them? And what are the capabilities of that team? Even if tio deal with the question we had earlier it's a networked deal that your management team maybe, uh, a mentor and a bookkeeper and say who it's going to be, people want to know that, and then your research metrics and cash flow projections that's a start up? We really don't have a start up here, everybody's beyond startup, you're talking about a product, but you have business. The next thing has turned around plants there are aa lot of business is that just need to change because market conditions have gone market or business or economic conditions have thrown their business upside down, it might be anything from tremendous road construction. That means people can't get to your retail outlet to a domain name that suddenly is under sees somebody else, says it's there's name and you're having to change the name to actually that would probably a business name that somebody's questioning therefore you have to something has happened to cause your business to need to make a turnaround customer tastes and trends have changed your your least just doubled and you need to move what caused the disruption? This is the first question you need to ask you need to home in what caused the disruption and how are you going to modify revenue and cost projections? Reset your goals to deal with this change because you can't just ignore it. Ignoring disruption is the worst thing you can do thinking things will just get back to normal this is the new normal whatever has caused the change is the new normal unless it's extremely short lived like the website being down but some things are just momentary and you fix them other things are lasting so you project what caused the disruption. How long is it this disruption going to affect us? How are we going to modify? How are we going to either increased costs to cut costs or increase revenues to make up for the changes that we're having to deal with and what our action plans that's a turnaround plan and during the strategy session tomorrow we go into becoming a driver of change change agent managing change, understanding what causes change and being ready to adapt to it and I said earlier you don't have to grow your business, you have to be ready to change your business and in some ways, we're all doing turnaround plans all the time, but really turn around plans or when a business is in big trouble and it's making the u turn growth plans, growth plans air where really I think each of you are in a different way um, either you're going to reach new customers, you're not really sure there's one of two things you can do, you can sell more to existing customers so you can reach new customers cheapest route is to sell more to existing customers, either to get them to buy more of what you offer or to offer new products to them, the less expensive way. But the business broadening way is to reach new customers, either customers, just like the customers you have who you haven't already reached or new kinds of customers or customers in new market areas, brigitte is you talk about reaching teachers that becomes a whole new customer avenue plans for introducing new or enhancing established products or services. This is a growth plan. Tar is working with a growth plan I mean it is if it's not a growth plan that it's just work. If you don't see a way that it can actually help grow your business, then you have to question, why would you invest your energy and it's so treated as is this a good growth strategy? Introducing a new product or enhancing and established product or service and in the strategic section we go into what is a meaningful product innovation what is a meaningful product enhancement? Another way that you grow your businesses you alter your pricing, packaging, distribution, customer service or other things that customers by um altering pricing by raising prices or by changing prices by bundling products to make them more in some ways when creative live bundled, fearless marketing with powerful business marketing in some ways that's a price alteration to adapt tio an anticipated customer desire packaging is an amazing way. It's a it's the old product met marketers know changing packaging is one of the quickest ways to change a product tio boost to change product perception and boost interest distribution that's what somebody online was talking about getting more online channels right now the internet makes it enormously easy to enhance distribution if you have a product not if you're just selling time by the hour customer service and other you have to have growth goals and strategies you have to have plans for acquiring strengths and the resource is necessary for growth and later tomorrow and strategies we go through what are the resource is so that you do a check list? We have a couple of questions coming in online and there was a few people that we're specifically would like kyle is question answered in in terms of your target audience s and refining that audience, she says, what specific steps can we take to research and refine our target audience to get to know them well enough that we can tweak our message? Well, we do have a session coming up on customer profiles, the main thing I would tell you the short answer right now in case I hope she'll be here when we get to that later. But the main thing is, when in doubt, talk to the customers you have talked to your best customers. I asked him, what three words do you most use when you discuss if you had to talk about us? What three words would you use when you think about us? What three other businesses are kind of a likely alternative? Because then you begin to know you're competitive rank um, if you if we weren't here, how would you solve this issue? Talk to your customers, you're a small business. Small businesses sometimes are shy about getting to a customer that's the beauty of small business is it big business has to spend just vast amounts of money to do this kind of research. Talk to your customers, it's your edge specialization and seems to be something that's bothering a lot of our online audience for joining us today I've got to read this may mount is called chako covered racing thank you for joining a structure covered, raising you win, but they're saying they're very much hanging this day off obviously offer a number of different services, but they find it equally successful. People are willing to pay for what she does, tara reedy she does handmade gifts, she does gaffes, et cetera. So specialization is obviously bothering her and and other people who are or him and other people who are in the chat room a swell weighing something similar to that from a few different photographers, but do a few different types of photography, such as wedding photography, commercial photography and they're wondering how tio continue with what they're good at but also be specialized in specific we'll get into it the branding section you need to figure out a way everybody needs to figure out a story that is believable it maybe if it's an important event, we should be there and it may not be wedding event, you know, graduation, whatever it may be event is the thing that ties everything together for them, but you need tio no matter how diversity is, you need to figure out how do you make it distinctive and we'll get into that in the branding section, I'm going to go quickly because I'm just realizing that we're out of time, not quite, but we're getting there, nonprofit plans the important thing about nonprofits and I know this doesn't sound like what anyone the audiences into, but a lot of co ops, a lot of, um, people who are event managers, whatever they preparing nonprofit plans, the important thing, is there tax exemption status so that people can? It really becomes a very regulatory issue, we'll get into it in the business structure section solo business plans. This is why I'm racing. I want to get to this because, it's, what most of your plans are? You need to know your personal expertise, an aptitude you need to present it, your business environment in competitive arena, your location? Where do you do business, and what does that really cost? So that you factor it into your expenses, financial forecasts and how you're going to market? There were twenty two and a half million non employer firms in two thousand eleven that was up four percent from two thousand ten sola preneurs are a huge audience, and most of them are freelancers. Freelancers need to do everything that solo businesses do when they plan, but they need to make initial decisions. Is your freelancing, independent or direct or directed and that's where those of you who buy the program, we're going to get the soul checklist I put together called, turn your gig into a business and it tells what you have to do because if you're working under in the u s ten, ninety nine arrangements which means you get paid as a work for hire employees if you're providing your own risk your own materials working from your own workplace that's really independent work and you can slide that into your business and make that instead of your employer you start thinking of that person as your client and you start building a business with that as a major client that client and maybe several others and you begin to build a brand doble business and the reason that's important is that by twenty twenty more than forty percent of the american workforce will be freelancers, contractors or temp workers freelancing is getting more and more and more competitive a million people do web design a million people did maybe not a million but photography whatever you need to stay set up a business that's brand herbal that people trust that they believe that you will be there that the negatives will be accessible even if you're sick or on vacation or you know, move on sell the business they need to believe that it's a business and not just a person because freelancers who think like entrepreneurs earn higher rates and work more hours they experience higher rates of, well there's another slide that broke up of up of optimal mindset and that comes from the freelancers industry report the next slide is of the biz strong checklist for start up starting a one person business and it walks you through is your gig a business waiting to happen and that is this form this that's downloaded it's a bonus material isn't waiting to happen are you a candidate for small business ownership? Are you ready to take the plunge and if so, follow these steps and it's just a total checklist of what you need to do you change your mind ship mindset from an employee to a business owner you decide on your range of services and this gets back again to what story is going to envelope a message that people believe about you? And then it goes through everything else how to register your name, how to structure even howto set up the chart of accounts that you should keep your finances under what does it take to turn freelancing into a brand in business? You need to choose and protect the name, establish a legal business structure, which is the next session. Get a business bank account. Do I sound like a broken record and a business credit card? So you're paying things with business money and keeping things separate? Address tax and regulation issues? Establish a workplace and if it's in your home, you have to make sure that zoning allows it and create a business plan in your bonus materials and the bonus materials for enrollment as well as purchase is a work see business plan checklist this's the important one and what's important about this is you go through what needs to go in your business plan, and so you just go through and check off and you can start to know what you need to concentrate on. You only need a table of contents. If your business plan is going to run long, you only need a neg zakat of summary if it's goingto run long or be for multiple audiences that you need to customize or you don't want to show them everything, all plans need to tell your business overview but it's essential for new businesses that you go into business model in business structure and that's the next session absolutely essential for all plans you need to go through your business environment, but if you're a start up or you're seeking funds, you have to go into barriers to entry so that they know why it is the business that you're starting isn't one that could be easily cannibalized by another business. And if you have any environmental and impact, your plan should go into environmental impact in green plans, including including how that gives you a friend, a competitive advantage and a cost advantage because sometimes by adapting environmentally, you also save a lot of money for all plans, you need a business description, but particularly if your stick seeking funding, you need to go into your capabilities and management introductions. For all plans. You need a strategy, but it's particularly important for one person businesses or those with shareholders or those seeking to transition. You need to know your strength and weakness is your exit strategy and your turn around or growth plants. You need to have your financial review essential for startups that you have financial forecasts absolutely essential and essential for regulated businesses that you say how you've dealt with regulations, which is what I was asking you and you don't need to. But I was confused over that all plans an action plan. What are you going to do to hold your feet to the fire? I should have put that this is particularly for one person business because it's really easy to let yourself off the hook and just not do it. And then all the extra stuff goes into the appendix. The business plan should be absolutely sure does. It could be so that people will actually read it so that's where we are, you at least know what goes into your business plan now we're going to start assembling the pieces in the next session with structuring your business and that business model. We've got some great comments great questions online be fantastic to just go through some of those before we wrap this section water and wine who we heard from earlier they're asking again is the question of different different ation that's easy for me to stay on narrowing once customer focused limited only by how large you want your business to be or is that not playing to it is differentiation oh you submitted by how large you want your business to be no no I think every business needs to have a point of distinction needs to have a point of difference a reason customers should choose them um you know a restaurant might their point of difference might be the place where you get a twenty minute lunch or it might be the perfect place to engage t proposed to your whatever um you have to have a point of difference that you uphold and it kind of comes back to your brand because people pay more they buy more readily and they pay more for services from businesses they trust the most the on ly trust businesses that they understand and believe are particularly credible in an arena and you know I no everyone needs to differentiate absolutely everyone it khun b that you come up with a my own point of differentiation is really quite broad I helped businesses start that's the plan start brand market and sell small businesses that's pretty broad, but I can explain it in a sentence that becomes believable so as long as you can kind of corral it into an area, in my point my niche is more the size business, then it is the offering somebody else may do nothing but personal branding for even for court they might go into major corporations and help executives to personal branding they have focused more on their delivery then on their marketplace I have focused more on my market, but still I have a sense if you can't explain it in the sins very difficult to build credibility around it in terms of growing our business, joe joe asked, is there a formula for knowing when you're ready to grow a team, make a hire employees? Um, I think that yes, I mean that's what the really the challenge you were sharing, unable to appreciate it well, when do you actually make a step? Is that is their standard for that mine just mind shift it is what I think there's not a standard because it's just not that easy, but what there is is there's financial forecasts you do revenue projections and cost projections I mean, there comes a point where you go, I can't do it all myself, so you start to say if I can get my sales up to this much I'll have the money to hire someone and it's your financial forecast. This is part of your financial forecast plan, which is the last session of today. Fantastic. Now kayla is asking this is something that a lot of them are. Minorities are asking, but this is a very specific question. What specific steps can we take to research and refine our target audience to get to know them well enough and then to tweak our message and lots of other people? Masters imaging, carl. Okay, no, they're asking very similar questions as well. It's about really refining that target audience. And I wish I could tell you which segment I think it's tomorrow, actually, that we go into, uh, that the customer profile, and not only knowing who they are, but where they are and what motivates their decision. And that's there's three things. One is demographics, which is where they are. And I'm sorry. Geographics is where they are that lets you know what marketplace you need to hit. The other one is demographics who they are. If they're mainly, you know, women of a certain age who make a certain amount of money, then that helps, you know how much they can afford to spend and what interest them the next one is psycho graphics why and how they buy and that's particularly important because you begin to learn do they buy director do they buy on the recommendation of someone else in which case the someone else becomes a real important part of your marketing focus? So we go into that in the in the section on your business description when we go into who your customer is so I hope they'll stick around for the whole thing way definite got we're going to talk a lot more about money a lot more about financing etcetera I'm going to talk about insurance I love tangie is asking about that she's getting a lot of conflicting advice about their what kind of insurance she needs for her business you know I cover it broadly because it is so individual things like everything from key life insurance to an owner for an owner to liability insurance disability insurance it really is so custody, you know, so one of a kind but I do go into it in broad brush form if they have specific questions I don't know that I'd be the person to answer that I think I would start with my own attorney and accountant and begin to learn that even the idea of professional liability with the agency we went round and round and round with it with getting a lot of conflicting advice over when when it pays and win it when when it covers you will and when in fact you feel good about it in effect, it's parameters don't apply so I would talk insurance agents and a lawyer advice has been a terrific segment so far. We have a great end of the day to still get to you after lunch, but before we do wanted to share some of the folks that are coming in from online, alison parfyonov says my fear is actually following through I feel like I've gone through similar steps many times, and after a few months I get discouraged, which then snowballs into a lack of motivation and lots of dow and I think all of us would say to alison we're learning the tools to learn to follow their hopes were right here I hope that allison, I really do hope alison will buy the course and at the very least fill out the planning templates, which are all of the yellow slides say write it down because I believe if you went through and wrote all these things down, you would have it in writing and you would be more apt to proceed. I doubt she's ever had specific steps that she agreed to do over a time period and and that's where all of a sudden those doubts go away, what causes doubts are too many opportunities and not knowing which to pursue and what causes certainty is a strategic plan that you say this is my goal, this is the strategy amanda follow, and these are the eight steps I'm going to take this year absolutely, absolutely and video guy also gave us a great comment, he was saying the key thing that I've learned is I need to figure out how to create a product that consumers will buy on a repeat basis versus just selling something once for me. That's, perhaps a video marketing package of three videos, which is interesting to see how people are developing their businesses throughout the course, and we also just had greg d says love barbara, she tells it like it is, well, the next session, I'm going to tell them they need a business model and feeding into that is the video package they're talking about and whether you know people may or may not by that video package repeatedly, but they might buy on a subscription subscriptions wonderful because it keeps coming in, or they might buy it to gain confidence in this person, to then hire this person as a consultant or a provider of service. So you do need multiple streams of revenue not on lee for the revenue, but also for the kind of credibility and almost viral opportunity that they present both in getting your message out there and in cross selling the products that you offer