10 Steps to the Business Plan + Planning and Goals in Self-Employment - Becoming Self-Employed Step 3
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| Image by Free-Photos from Pixabay |
Whether the business plan is necessary at all or whether you can do without it as a self-employed person on the Internet is one of the questions I will address.
I also go through the creation of a business plan in 10 steps and give links and software tips.
Why is It Important to Plan Your Own Business?
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| 10 Steps to the Business Plan |
Today I am dealing with a topic that is certainly one of the least popular among most start-ups. Many of them may now first ask why they should put so much work into planning their own business in the first place.
After all, in the first two parts of this article series we found that we are a) suitable for self-employment and b) we have already analyzed the market and found a perfect business idea.
These two steps were important and are a very good basis for starting your own business. Nevertheless, there are a few more things needed to be successful in self-employment.
If we define goals today and, in the end, also work on our business plan, we create the conditions for our long-term success. And only if you have a plan can you check over time whether you are still “on schedule” or whether you have to take countermeasures.
Goals for Founders
An important point in planning is the goals that you define as a founder. I have already mentioned this very often in my blog and I have also brought the following saying many times: “Without a goal, no path is the right one”.
It is even worse because you will then certainly “get lost”, not even notice it and most fail in the end. And then it's always the customers' fault. I've heard that so often.
It is therefore important to set realistic, yet ambitious goals. A good approach to this is the SMART method.
SMART stands for:
- Specific
Goals have to be precise. As concrete numbers instead of a statement like “successful”. - Measurable
That leads straight to this point. Because goals have to be measurable. Goals only make sense if you can compare the actual situation with the target situation. - Attractive
Goals should be attractive/ambitious. After all, you want to achieve something and the goal has to motivate you. - Realistic
I can wish to oust Google from the top, but you should define goals that you can achieve with your resources. - Time
Finally, it is important to link the goals with deadlines. What good is a goal of 100,000 visitors per month on my website if I don't define whether I want to achieve that after 1 year or after 5 years?
Goals that meet these 5 categories make sense and should be included in the business plan.
The Business Plan
The business plan (or in German: business plan) is a structured document in which you analyze and plan all aspects of self-employment.
It is also about the actual business, the business idea, and the customers, but it is also about the important commercial aspects, which are very often the actual reason for failure.
A business plan is therefore an “all-around complete plan” for your own business.
10 Steps to a Business Plan
There is no prescribed form of the business plan, but a certain basic structure has prevailed, which usually contains the following 10 sections.
#1 Summary
The summary should briefly and precisely present the planned independence on 1-2 pages. Presentation of the founder, the company, the products/services, the USP, the investment needs, target group, marketing cornerstones, etc.
It is therefore a summary of the following points, which provides a good overview of the start-up project.
#2 Founder Person
Here you should introduce yourself and of course partners if there are any. What are the qualifications and previous knowledge? Do you have commercial knowledge and what are the strengths and weaknesses of the founders? What should the legal form be?
#3 Business Idea
Here you present your business idea in more detail, which we have already developed in Part 2 of the series. What exactly are the products/services you want to offer? Where are the customer benefit and the USP? Are there still developments necessary?
#4 Market
Here it is necessary to present the analysis data. What about potential customers and who are they (demographic data)? Are there enough customers and how can they be reached? If you already have contacts and reference customers, then that belongs here too.
Of course, this also includes competition analysis, including strengths and weaknesses. And if necessary, you should also include a location analysis. However, this is usually not necessary for purely online projects.
#5 Marketing
It continues with marketing. This consists of 4 instruments: products, price, sales, and advertising.
For these 4 points, you should explain in detail which measures you want to take and which strategy you want to pursue in each case.
#6 Employee
Should you set up a team or plan to hire employees later, this should be explained here. For me, the section was very short. ;-)
#7 Chances and Risks
At this point, you have to explain the opportunities, but also the risks for your independence. And it's important, to be honest, and realistic about both of these points. And of course, you should also prepare possible countermeasures for the risks.
You can also represent a best-case and a worst-case. If your own business can survive even in the worst case, that would be ideal.
#8 Financial Needs and Situation
Here you explain how the financial situation of the entrepreneur is up-to-date. For example, do you still have reserves or are you dependent on funding? How long do you have financial breath, if any?
But planning for investments in the coming years is also important.
#9 Financial Planning
The financial plan is now being used for the next 3 years. If necessary, an investment and depreciation plan is created. This is important for everyone who has to invest in furnishings or, for example, an assortment.
The liquidity plan is very important for everyone. Here you list in detail the income, expenses, investments, interest per month, because many self-employed do not fail because they have no orders/customers, but fail because they run out of money ( liquidity ) somewhere between the order acceptance and the payment of the customer's invoice. That is why it should always be clear in the liquidity plan what the liquidity reserve looks like.
In the end, there is an income statement, i.e. concrete figures on sales, costs, and profit for each of the next 3 years.
#10 Attachment
The appendix contains the curriculum vitae, any important contracts, market figures, reports, and the like.
Of course, the business plans look quite different depending on the industry.
Business Model Canvas
More and more entrepreneurs are using the Business Model Canvas to plan their business idea. This allows you to take a holistic look at the success and risk factors of a start-up project.
With the help of building blocks, the important success factors are shown and you can fill them with content. These are, for example, the factors value offers, key partners, cost structure, and others. In this way, you can visualize your business model very well and use it as a starting point for your business plan.
Do You Need a Business Plan?
The business plan causes stomach ache for many start-ups:
You should write 20 or more pages there and theoretically plan and write down as many things as possible. It's not fun and you have a great idea that will work!
Many have already thought that and at some point they had a rude awakening. According to the Chamber of Industry and Commerce, 53% of the start-ups could not describe their USP in a study, i.e. what sets them apart from the competition, the unique selling point. 32% even had difficulties describing their services/products in such a way that it was understandable. How should customer acquisition work there?
When I started my own business in 2006, I also had to submit a business plan. After all, I applied for funding. And in my opinion, this was especially important for optimal preparation. You think about things that you would otherwise not have thought of if you only focused on the technical.
Of course, it is time-consuming to come up with exact figures for income and expenses, but this is important, as business start-ups otherwise tend to overestimate the income and underestimate the costs.
In addition, this way you get a good action plan for the first months and years so that you don't forget important marketing measures in the daily work stress at some point.
For www.selbstaendig-im-netz.de, on the other hand, I have not created a detailed business plan. On the one hand, because no investments were necessary and I started the blog in my spare time. On the other hand, I of course thought about it and analyzed and planned many of the points that also appear in the business plan (target group and competition analysis, target definition, marketing, etc.) for my blog.
But if you want to become “self-employed on the Internet”, it is usually a full-time job that he or she has to be able to make a living from and a business plan is recommended.
As already mentioned, the business plan is not just for you. If you need a loan or apply for funding or coaching, a business plan is mandatory.
So I can only recommend start-ups to draw up a business plan. That may slow down your enthusiasm a little at first, but that doesn't have to be bad, because if you start unprepared with false and overly positive expectations, then the hard case often comes to the bottom of reality. Developing a business plan creates significantly more realistic expectations and attitudes.
A Business Plan is Not Set in Stone!
But I also learned one thing: reality usually turns out differently than planned. While it was still halfway true after 6 months, the business plan was no longer useful for me after 1-2 years.
I learned so much in my self-employment and I made adjustments to my performance so that of course the planned numbers were no longer right in front of everyone.
With this in mind, you should adapt your business plan and compare it with the new situation, otherwise, the planned measures will no longer make sense.
When the business as a web designer was up and running at some point and I found my way, I didn't even take the business plan out of the drawer. I only used the liquidity plan for a long time. In the first 2-3 years, in particular, it is by no means unusual that money is sometimes tight (e.g. tax office ) and if you don't know exactly when income will come and expenses will be due, things can get very tight.
Links and Software for the Business Plan
Of course, you can simply write your business plan in a word processor, but there are good software and websites that will take you by hand and guide you through the creation.
So It Goes on
In the next step of the series of articles making self-employed, I show what differences there are when you become self-employed as a student or unemployed.
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