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Lately we have gone through the exercises that allowed us to seriously review whether Entrepreneurship is something we want to focus on? Some of us are hell bent on creating a small business. We later went through the review process of the risks involved in setting up a business. Now it’s time to put a business plan in action to make our small business successful. A lot of entrepreneurs go through this torture of over complicating business plans, I was in this boat too so for all those who have created business plans that are now out dated I hear you loud and clear. I love Guy Kawasaki’s style in running a business and read and implement his teaching often. Recently I needed to scale my business to create value and at the same time create a flexible business model. For the first time I have a business plan that’s actually operational to some extent. I thought this could benefit many other entrepreneurs who are walking the same route, so here’s my take on a practical down to earth operational business plan that you could use for your small business.

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If you look around, you will find companies competing on features you need to be one-up to beat your competition. This is what traditionally we are taught. Look at mobile phones, it’s all about features, the more features you have the better the perceived value. The same with any online web application, they compete on price and features. This mentality can actually kill small business entrepreneurs, if we focused on this track. It’s an expensive way of building and marketing your product. If you agree that to beat competition you need to keep increasing the features of your product or service, then the business plan that I share will be of little value to you. It’s better not to read the remaining part of this post. The business plan strategy that I have listed below is for the purpose of assisting you and your team for daily activities. It’s not geared towards an investor related business plan.

How to write a business plan that works on a daily basis:

Business Concept

I have started building my business for me. Sounds a bit scary doesn’t it? Well I decided I needed to solve my own business problems and by doing so I would solve the business problems that other Entrepreneurs may possibly face. So my target audience at the moment is me. This allows me to build a product or service that solves specific problems that small business entrepreneurs may face

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So now you need to ask yourself:
1. What is my product or service? – It needs to be a simple definition no funky terminology and marketing words please.
2. What problem does it address – describe 2 problems that are being addressed
3. This is the start of your business plan as it tells a person what you are offering and what problems you address

Example 1 – An Ayurvedic Spa
The service is : An Ayurvedic massage along with ayurvedic products to heal your body
Problems addressed : A holistic view to health, Reduce stress

Example 2: Apparel Design Printing
The service is: Customized Graphic Designed Apparel
Problems addressed: Help designers display their art work and earn money, allows a consumer to personalize their wardrobe.
When you try and solve your own problems you are in fact solving a problem that the world may be facing. This is the best way that I have found to keep my passion alive. If your small business is born out of necessity you will see how your business starts taking shape.

Target Market & Potential Customers

As defined in the previous section, initially the target market for my business was me. I love being an entrepreneur and have setup many business ideas. The first time round I failed miserably and that was because I had no clue of what I was doing. This allowed me to write my thoughts on zuricka.com, from there it went to my interests which was web business strategy and internet marketing. Over the process of working as a consultant for businesses in New Zealand, India, and now online, I learnt business process architecture and ways to market myself for potential work. This allowed me to write what I learnt and implemented on my blog. That’s where I started connecting with small business entrepreneurs who faced the similar pitfalls. When I write about these pitfalls, I attract similar interest groups.

Now focus and ask yourself what are the micro decision that you face in your business.

Example 1: Restaurant Owner
If you are setting up a restaurant maybe space is a problem so you decide to offer take away. This allows you to identify your target audience as people who are in a hurry to grab a quick meal or people who would prefer to eat at home. Ask yourself what food do you love eating? that’s your menu.
What is it that you do best when you cook?
Probably you cook in utensils that need very little oil or salt, so you are then offering meals to people focused on health. The list can keep going on and on.

Example 2: Lawn Mower
Maybe you have come up with a schedule of how often you prefer mowing your lawns and have a system that you created over time of what duties you perform in your own garden. There enable you to now identify your target audience. You will be servicing clients who are looking for a well planned lawn cutting time table along with having a planned schedule of removing the weeds and looking after the garden. Your target market could be busy professionals who hate gardening and they need a solution for their own garden and not just their lawns.

Funding:

For traditional businesses such as manufacturing, engineering, I agree funding is a very crucial aspect that needs to be well thought of especially if you have insufficient funds. But as small business entrepreneurs you need to weigh your options and enter into a market where you can practically fund your small business venture. That’s why in a business plan this section is very important.

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I ask myself constantly each month the following questions:

1. What can I do with the cash on hand that I have each month?
2. What’s really essential and what I can do without?
3. How many staff do I really need to get me from point A to point B?
4. What can you do with $5k instead of $20K?
5. What can I do in the next three months instead of planning for the whole year?
6. What books can I borrow from the library to learn about my business rather than buy?
7. What resources do I desperately need to keep my small business ticking fast?
8. You could ask yourself what can I do by myself while keeping my day job and what tasks do I need to outsource to keep the business moving?
9. How much will it cost to create the product or service?
10. How much will it cost for recruitment?
11. How much will it cost for marketing?
12. How much will it cost for equipment, software, hardware etc?
13. How much will it cost for office space, infrastructure etc?
14. How much will it cost for salaries?
15. How much total up-front investment is needed?
16. How much should i charge for my service or for each product sold based on the costs that I incur?
17. How long before I can break even?

All these questions allow you to come up with your budget financial plan. Run on limited resources and you’ll be forced to think outside the box to get to your destination. With constraints you are forced to get your small business idea out faster rather than later. If while doing this section you get to a point where it’s going to take you years to break even you have the option to bail out or exit during the initial stages.

Have an Enemy – Your competition

Instead of looking at other’s in your industry as competitors look at them as your enemy. You need to pick a fight with them. I don’t mean this in the literal sense but pick a fight in your subconscious virtual reality world. It’s always good to visualize a fight where you need to win. This forces you to be motivated to deliver the best. When I started my business consultancy career there were already business consultants with year’s of experience under their belt. They worked with companies such as Microsoft, IBM, Vodafone, Telecom, the banks, etc. I had a tough road ahead of me. Instead of fearing the giant I looked at it as a game where I was participating in a 1 year Marathon. I looked at all their key strengths and looked at mine and identified my fight with my enemy. My enemy here was not the human being but the attributes that were attached to a business consultant. Business consultants talk a lot, use a lot of business lingo, use project management methodologies, structure and rigid rules, a list of business models, etc, etc.

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So there I had picked out my enemy, I was going to fight the Project Dictators and the tools they used to get their strength from. When I went to pitch for business I pitched simplicity, flat structure and real time web based applications. I spoke to everyone and anyone in the business not just the CEO or CIO or Financial controller or Managers. This allowed me to create business campaigns within a specific company to vote for my style. I used project management tools that were web based rather than desktop based. This allowed anyone to see in real time the status of the project. I gave the business person the power and planned with them rather than tell them what to do. Ask them to participate in writing the business plan for their unit with clear objectives.

The one advantage you get from picking and identifying your enemy, you get a clear marketing message. As human beings we are programmed to compare, so when you come across two different personalities each having structure and a different style, we need to choose. By picking your enemy you are feeding your customer a story they want to hear and that is solving their problem. This allows your customer to understand what you are offering faster and they will take your side.
So who and what is your enemy?

Be Lean and be Fast – Your daily business tasks

The more flexible and leaner you are when setting up your small business the faster you can react and act upon. Change must happen fast and not take you ages. Don’t get sucked into the world of business with complicated processes.

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These are how large corporate waste their time

1. Service level agreements
2. Meetings for the sake of meetings
3. Huge teams
4. Project Management Methodologies
5. Long term roadmaps
6. Office Politics
7. The list goes on

Now here is how you can be leaner and faster

1. Daily Task plan no more than 5 tasks a day
2. Multi tasking team members
3. Working with constraints
4. Small in size so less over heads
5. Using web applications and business processes to work effectively
6. Outsourcing work duties that are crucial but more admin related to a dedicated resource
7. Keeping your product simple and having a clear story
8. An Iterative process to work on a daily basis

By having a daily task list it allows you to focus on the relevant and not the irrelevant. It helps you to identify areas that need change faster. You now have created a system to communicate effectively with your customers.

Here is what you need to do to pan your daily tasks

1. Take each milestone and break it into small bits within your business plan
2. Prioritize your tasks in order of importance
3. Schedule each tasks to be worked on daily. Work on a max of say 5 tasks in a day
4. This forces you to have a clear task list
5. Keep your business model simple and clear
6. Reduce administration costs by outsourcing these tasks to a person who loves doing it.
7. Every evening review your tasks for the next day.

Be an entrepreneur and have fun

At the end of writing your business plan make sure that you are not stagnating and procrastinating on your small business venture. Ask yourself how often have you delayed your goals because you are wanting a perfect business plan? How often have you questioned yourself if today was a productive day? This happens when you focus on too much detail. It’s good to have detail but as a small business entrepreneur you cannot afford to be a perfectionist. I know I am bad when it comes to grammatical errors, spellings, framing sentences and checking for typos. I need someone to proof read my work. Now I could either tell myself that till I can afford a proof reader I won’t publish on my blog or I can go right ahead and publish on my blog. My goal should be to hire a proof reader and work towards achieving this once I hit X amount in revenue. Your customers will understand as long as you are providing value. The day you focus on the irrelevant is the day you are working with your enemy.

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I hope these steps will help you in writing your small business plan. Should you need any additional information on this topic, please do leave a comment or send me an email and I shall update this post to include additional points that I may have missed.

Here are some interesting videos that cover the topic how to write a business plan for your startup in more detail: