The actions that you take today will manifest themselves in the future. If you plan properly at this point in your business you will have a good foundation to build off of. If you don’t you’ll be playing catchup before you even start.
Fail To Plan Is Planning To Fail
Someone's sitting in the shade today because someone planted a tree a long time ago.
The key to planning is starting with a big goal far into the future and then breaking it back down. Some people refer to this as a BHAG or Big Harry Audacious Goal, an idea conceptualized in Jim Collin’s book Built to Last. Your BHAG isn’t a random goal, it is a goal that fits what you are passionate about, what you can be best at, and what can generate income. It is important that you set your BHAG far enough into the future that you’ll have time to get there. I recommend a 3-5 year picture at this point and time in the process. The book Traction recommends setting a 10 year target and then breaking it back down into a 3 year picture and then a 1 year plan. Traction and the EOS Process is something that we’ve used in our agency and had good success with. The point here isn’t to layer on another set of things to start looking at, but the idea of setting your long term vision, then breaking that back down in to smaller pieces. We’ll cover this more in depth in the chapter Eating an elephant.
You might ask, well what should I include in my long term goals? As in the previous chapter we don’t need to get stuck in the details but we’re using this as our north star to keep us heading in the right direction. You should start to think about things like:
- Do I want to grow into a big business or is this a lifestyle business to where I can work on my terms?
- What areas of expertise do I need to bring into the business that I don’t have?
- How much money would it take me to get to that goal outside of revenue we’d generate?
Things like lifestyle business versus a “big business” may seem contrary statements. There are many businesses that have large employee counts and the CEO is able to work on their terms. So it isn’t a one or the other, nor would you have a large team supporting you right away, unless you have a great deal of sales when starting.
For me, being more of a visionary thinker, this is where I get most excited. Thinking about what things could look like in 3, 5, or even 10 years you start seeing the road looks like on how to get there. Dream big, but remember to dream realistic. You need a plan that includes what you are passionate about, what you can be best at, and what can generate income. If my technician skills are in the software industry and I want to become the best high fashion consultant the world has known, I’ll have a good deal of learning to do before I’d have a chance of making any money doing it.
Once you have your long term direction it is time to start breaking it back down into more actionable areas. Some good questions to start with:
Who is my target customer, how will I reach them?
Who your ideal customers are and how you can connect with them. It’s critical to know your ideal customer. Understand what’s important in their lives, what products they purchase, and what websites they frequent. Knowing your ideal customer will help you know how to locate them and direct them to your website and product. A great way to do this is to create a user persona. A user persona is a fictitious person with real world attributes that help you understand your target customers buying habits, where they work, and what is important to them.
How long is the sales cycle?
Start with your ideal project, how long is it? How much do you charge per hour? If a typical project would cost your customer $100,000 it will take longer to sell that project then it will if you are selling an e-book for $5. Make sure to keep this in mind when beginning to forecast revenue. If your sales cycle is 6 months and you are needing revenue on day one, you better start selling before you leave your day job.
What are the resources needed?
This goes back to the lists you created under entrepreneur, manager, and technician. Now that you’ve decided what business functions you need to outsource or be trained on, what time and money will those take?
Can I work on an hourly basis or is it per project?
As you are beginning to compare prices to competitors. Are yours are higher, if so what differentiates your product or service? If prices are lower, how do you communicate quality at a reduced cost? In the chapter “Death by a Commodity Mentality” we’ll show you how to differentiate yourself from the competition.
What are your startup costs?
Do you need to incorporate before you start selling your services? Perhaps it would be ok to operate as a sole proprietor until you have enough revenue to engage a lawyer. Or you might be looking at an industry that does a lot of business with the government which would require you to carry a certain level of insurance and to be bonded.
These questions aren’t meant to be an exhaustive list of things you’ll need to start answering, however if you spend the time thinking through high level questions like these you’ll be in a better place before you start attempting to market your services. Planning is the most important aspect of success. Set your goals, and then work backwards to define strategies for achieving them.
- Create your long term vision. At the top of your planning document put a date 5 years into the future. Then list what you will use to measure your progress. You can use goals of revenue, team size, or partnerships.
- List your next years goal. What do you need to get done in the next 12 months to accomplish your 5 year vision? List revenues, profit, and any details that will mean success to your business.
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