Admit it…if you’ve ever written a business plan, you downloaded one of those great “business plan templates” available everywhere. You were so excited you almost wet yourself getting started. But then when you got to the 21st question that seemed completely irrelevant to your business, you sighed. You turned off your computer, put down your pencil, and gave up. What is the point? Most of those silly questions either a.) don’t apply to you or b.) have answers that are so obvious you don’t feel the need to write them down.
Greg Go has written a great article over at Wise Bread about simplifying your business plan [via LifeHacker]. It makes me want to revisit my admittedly sketchy plan. It’s based on 4 simple questions that apply to everyone.
I’m going to go ahead and write down some quick answers to get me started:
- What is your product or service?
- Who are your customers?
- When will things get done?
- When are bills due and when do you get paid?
Designing and developing websites and promotional material for small- to medium-sized businesses.
- Who’s giving you money, and who are you marketing to?
Business owners who want to be branded as modern, fresh, and design-conscious.
Creative professionals who want a well-built, search-engine friendly website that will display their talents and wares in an intuitive, yet highly unique way.
Website owners who appreciate clean code and simple functionality.
- How many potential customers are there?
Approximately 350 new business licenses are applied for each month in Virginia Beach alone. Online, there are thousands of sites that could use a major overhaul.
- Who are your competitors?
Freelance web designers and small development studios. There is a LOT of competition, but there is something to say for customer service and “being there.” Many of our clients have been burned by designers who just disappeared from the face of the earth with their hard-earned cash. Because of this, trust is definitely an obstacle to overcome, but it’s an area that distinguishes us from many competitors.
Our studio doesn’t keep regular business hours, which allows us to have the flexibility of meeting with clients whenever they need to meet. We do work the typical 40 hour week, but since we live in the studio, we have the option of changing it up on a daily basis. Oh wait…I guess that’s not what this question is asking…
- What does your company look like in one, three, and five years?
In one year, we hope to have launched a social media site (details are hush hush at this point) that will allow us to develop and demonstrate our web application development capabilities. In three years, we hope to hire more talented developers and become a child company of a larger media company that John will be launching. In five years, we will be continuing a process of growth, but will remain our small-town focus on relationships and accountability.
- In the next 3, 6, and 12 months, what are specific milestones you want to accomplish?
In three months, we would like to develop a more consistent client base while keeping our focus on serving only those clients who have a vision and philosophy consistent with our own. In six months, we would like to re-vamp our portfolio with work that reflects our progressive design goals. In one year, we would like to launch our first social media site.
- What are specific next steps you need to accomplish to reach the first milestone? What can you do today?
Figure out a marketing plan that offers a consistently good return on our investment. Today I can brainstorm marketing strategies that I can check off one by one and eventually make a log of specific results that each one achieves.
- How much money will it cost to make your product or provide your service?
Software that we maintain for our business includes: Photoshop CS2 (which we’d love to upgrade to CS3), Maya, Flash MX (which we will upgrade by purchasing Adobe CS3), and ToonBoom. Equipment that we maintain for our business includes a WaCom tablet, an iMac, and a PowerBook Pro. We also purchase stock images on a regular basis. Other than that, we are using resources already provided in our studio, since it’s an extension of our home. Our total yearly expenditures for software, equipment, and images are approximately $10,000.
- How much do you have to charge to earn a profit?
(We did these calculations in February using a method we’ve previously discussed.) Considering that only 50% of our working hours are currently billable, we need to charge $90 per hour to grow the business and pay ourselves a small salary. This is in the range of the industry standard, which is between $75 and $250 per hour.
This process was incredibly motivating for me. I think I’ll go brainstorm some marketing strategies now.
2 Comments
Business Plans can be completely frustrating. I tried to make one and even have some business plan software that was mostly useless.
Will you spend $10,000 every year or is that just startup costs? Usually hardware and software are 3 year purchases for a business that has to stay up with tech.
That’s a good point, Keith. I know that Maya and the Photoshop Creative Suites are super, hardcore expensive, even when you upgrade. But you’re right…we definitely won’t have to $10K every year. I guess that means that our other costs would only be $2-$3,000 every year. Very good point.