Thursday, January 19, 2012

Savvy Entrepreneur: Build A Plan For Success

Business plans bring up all sorts of feelings of dread. We picture thick tomes full of graphs, spreadsheets, and endless paragraphs on marketing segements.

Today I want to you think about writing a different sort of business plan. This one is solely for you and will only take a couple hours of your time and will provide clear action steps for growing your business.

The Big Money Picture

Start with the big picture in money, what does your business need to make and how soon does it need to make that? There’s a time and a place for vision and mission statements, but right now I want you to get straight to the point. Focus on the business you want to build and how long you have to make it work.

 List out all your possible expenses - rent, utilities, travel, marketing, employees, etc. and what you want to pay yourself to come up with a monthly income.

This number might seem scary big, but you want this to be a sustainable business, not a hobby. You need to pay yourself well, invest in the business (marketing, rent, conferences), and still have a cushion for the unexpected.

You also need to know how long you have for the business to reach this level. Do you only have 6 months of savings or do you have a 2-year runway?

The Right Now Picture

Now let’s look at what's already coming in. List all the income you know you can count on and estimate what you’ve been averaging for all the revenue streams you have. Be as specific as you can even if you need to guess at averages.

If you’ve got revenue streams that you’re still building, but haven’t brought anything in yet, don’t forget to note those too.

What’s the difference in these two numbers? Are you thousands off or only hundreds? This will give you a better idea of how hard you need to work, how far you need to go, and how long it will take you.

Where’s The Money?

Now let’s look at your time spent to bring in that income. What are you doing right now that’s bringing in the most money? Can you devote more hours to it? What are you doing that’s bringing in the least amount of money? Is it worth the effort, do you need to charge more, or are you still working to prove a model?

You might see that custom work brings in great money when you get it, but you’re not booking much. Instead you’ve been focusing on marketing your online store. It might be time to switch your efforts toward booking more custom projects. Or you might see that for the time investment craft fairs and trunk shows just aren’t cutting it. You might need to cut the number you commit to drastically and invest your time in securing wholesale accounts instead.

Building A Plan

Now that you’ve got a clearer picture of where the money is coming from and where your time is best spent build an actionable plan to get your numbers where you need them to be. Start with modest goals, but set them high enough to challenge yourself and keep things moving forward.

You might need to slowly extract yourself from the parts of the business that aren’t making money, before you can invest more time into the areas that are. Do you need to learn more about sales or gaining retail accounts? Set goals like increasing your revenue by 20% or booking 2 new clients next month and build from there.

Numbers are hard to ignore, so taking a good look at them will give you a pretty clear picture of what’s working and what’s not. It’s easier to build on what’s already working than add new strategies, products or services that haven’t been tested.

What step can you take next month to get you closer to your goal?

This is the kind of work I do with my clients, because sometimes it’s hard to do on your own. I help them gain perspective on where they are, where they want to go, and what paths will get them there. If you’ve got big goals this year send me an email and I’ll tell you how I can help.

I encourage comments directly to this post, but also feel free to email me directly with questions, reactions, struggles, etc. genevieve [at] lightboxsf [dot] com

If you're an Etsy seller in the San Francisco Bay Area, contact Jen from Mama's Magic Studio about joining SFEtsy!

1 comment:

Jen (Mama's Magic Studio) said...

awesome advice as usual... the $$$ stuff is still so challenging for me. thanks for the good ideas.

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