Business plans get a bad rap. Everyone makes them sound hard and complex. If you want to get financing or venture capital, yes you do have to spend a lot of time with spreadsheets, doing projections and forecasts for a formal business plan. But the reality for most entrepreneurs and micro business owners is different. If you’re running the show and capitalizing your idea yourself, you should know the general numbers, but you don’t have to go to all the effort of creating a complex formal business plan with charts and arrows.
In the 15+ years, we’ve been in business, we’ve created plans for almost every new project. Each initiative began with the steps I outline here. Using this simple five-step process, we’ve managed to:
- Start a magazine (which existed for more than a decade)
- Run an online conference (which ran for four years)
- Transition our business from a Web design studio to a publishing company
- Write, publish, and market 12 books (and counting).
- Start an association for people doing humane work.
- Create an online training site.
Big business changes like these require planning. Everything starts with an idea. As an entrepreneur, your ideas probably aren’t in short supply. It’s what you do with an idea that matters in the long run.
Going through these five steps forces you to outline what you need to do, so you can take action. Here’s how it works.
1. Decide what you want to do and research it.
After you’ve had your major brainstorm, you need to detail exactly what it means in the real world. Many entrepreneurs can come up with dozens of ideas a day. The reality is that you can’t act on all of them. So your first step is to decide if the idea is really worth pursuing.
First, you should talk to someone else about your idea. You’re not doing this to get approval, but rather to see if you can explain the idea clearly. If you can’t describe the details of your concept to anyone else, it’s probably not going to fly. Assuming you don’t get a blank stare from people, the next step is to spend some time researching the logistics of what you want to do.
Almost any time you embark on a new project or idea, you’ll need to spend some time learning. At first you just don’t know what you don’t know. Your idea may have a tragic flaw, but you don’t know that until you do a bit of research.
In fact, my husband and I are going through this step yet again for my latest business idea. My favorite way to research an idea is to read, so my first step was to see if there’s a book that explains some of the nitty gritty details of what I want to do.
Don’t reinvent the wheel. Odds are good that someone has already done what you want to do. They may have written about it online or even published an entire book. Get online and do some surfing. Then visit Amazon and buy some books.
Spending $50 on books can save you literally thousands of dollars and a lot of gray hair in the long run. Don’t skip this research phase. On the other hand, don’t get so bogged down in research that you never get to step two.
2. Get the idea out of your head and on paper.
Once you’ve educated yourself a bit about your idea, it’s time to overcome the next huge hurdle: getting it out of your head and on paper. Unfortunately, this step is another one many entrepreneurs want to skip.
If you don’t want to lose the idea, you must write it down. You can’t keep all that information in your brain. It just won’t work.
Any big project or idea undoubtedly has a lot of moving parts. The more you commit the details to paper, the less likely you are to end up with gigantic mistakes later on. Trust me on this: you can’t remember it all.
At this point, you should also look at the numbers. You don’t have to turn into a CPA, but running some basic “what if” calculations is helpful. What if you sold 10 widgets? What if you sold 2? Write down all your costs and consider how much profit you will make. (And if you discover no profit exists, you might want to move on to the next idea.)
3. Break the project up into phases.
Assuming your initial calculations didn’t cause you to ditch your project entirely, you need to start figuring out how to break it up into manageable “chunks” of work.
Every big project is really made up of a series of small projects, which have to happen in a particular order. For example, if you want to start a magazine like I did more than ten years ago, many different things need to happen.
In my case, I wanted the magazine to be supported by advertising. To do that, you need to create a rate sheet, write and design a sample issue, and develop a list of advertising prospects.
The order of events is important. After all, you can’t start contacting advertisers before you’ve figured out what you need to charge to be able to print the magazine. And any advertiser is going to want to see what they are going to be advertising in before signing on the dotted line. So you need to create a sample issue.
For your planning purposes, it can be helpful to divide your project into phases. For example, Phase 1 of the magazine project might be getting the initial prototype done. Phase 2 might be creating a Web site. Phase 3 would be selling advertising; Phase 4 is producing the first issue.
4. Outline each action plan.
After you’ve done some big picture planning, it’s time to get into the details. We refer to these detailed plans as “action plans.” The first person I ever heard use the term is Robert Middleton (in fact, his Web site is called Action Plan Marketing, which gives you an idea how he feels about planning and taking action). The key once again is to be sure to write everything down. You need to add due dates because without a deadline, nothing happens.
While researching this article, I found the action plan for the original Computor Companion magazine. As you can see from the plan, it started as a print magazine. The start up of the magazine really happened as described here, partly because I detailed specifically what I planned to do:
Create Prototype Issue 4/30/99
- Letter from Editor (300 words)
- Digital Camera article (1000 words)
- Utility Article (1200)
- How-to: Styles (620)
- Step by Step: Shortcuts (500)
- C@Work: Mailing List Software (1080)
- C@Home: Educational Software – (1080) – C)
- Bit Bucket: (520) – Janet
- Q&A Column – ( 620) – come up w/ Q’s for J.
- Rest Stop: Job Sites (1280)
- Before & After: Newsletter (graphic mostly)
Create Sample Ads
- 2 full page (big office supply, big computer)
- 2 half page (ISP, smaller computer store)
- 6 quarter page (CPA, printer repair, office furniture, cell phone, mailing services, electric co.)
- 6 eighth page (quick printer, shipping, travel agency, voice mail, tax return prep, photo store)
Create Media Kit and sales materials 4/30/99
- Rate Card
- Advertisement Proof Approval Form
- Freelance writer contract
- Advertisement Insertion Order
Create Sales Plan/Target advertisers 4/30/99
- Get phonebook – ordered 4/13/99
- Create Target List of Advertisers
Begin to Sell Ads and Target Distribution Points 5/3/99
- Create Mailing Database (find software)
- Buy shipping boxes
Ad Sales Close 6/11/99
Ads Approvals Begin 6/5/99
All Editorial In 6/1/99
All Editorial Layout Done 6/7/99
Cover Layout Sent Out For Film 6/7/99
Ad Approvals In 6/18/99
Page Layout Complete 6/19/99
Proofreading/Changes 6/20 – 6/21/99
Materials Given to Printer 6/21/99
Press Date 6/23/99
Delivery Date 6/30/99
Distribution Date 7/2/99
5. Transfer the tasks to your weekly to do list and take action.
Planning is nice, but you aren’t likely to act on the plan if it never makes it into your day-to-day tasks. Many entrepreneurs spend a lot of time planning, then file the pretty plan away and don’t take action.
The key to taking action and making progress is putting the small steps on your to do list. In my case, I have a weekly to do list that sits in front of my monitors, so I can’t avoid it. Because it’s on paper sitting there, I can’t just close a window on my computer screen and forget about it.
Each day has blocks for morning and afternoon. Only a couple of task fit into each block, so I can’t delude myself into thinking that I can accomplish 16 huge tasks in an hour.
By transferring your individual tasks from your action plan to your to-do list, you ensure that you make steady progress every single day toward your project goals.
Take action now!
If you feel like your business is stagnant or even collapsing, brainstorm some ideas and follow these steps. Businesses that succeed stay in motion. So if you’re feeling stuck, take action now. It’s not as hard as you think!