Did you write a business plan?

[vangogh]

I'm wondering how many people here wrote a business plan when getting started. How much detail did you out into it? Did you find it useful?

I wrote a very informal business plan when I was getting started. I downloaded a sample business plan (http://www.bplans.com/sample_business_plans/all_plans.cfm) and used the outline to fill in my own information.

I didn't really use it for anything. I'm still the only person who'd ever read it. It did help me to focus and think about how my business should really be set up. I used the ideas in the plan as a guide when making decisions.

My business has since evolved from those original ideas, but I'm amazed at how often I still follow much of it. Over the years I revisited my plan once or twice to reflect what I was doing in practice and also to formulate new ideas and new directions for growing my business.

Business plans can be a great way to get you to really think about your business.

So did you write one? What did you think?

[orion_joel]

I did start out with a business plan, which i think in the last 6 years i have revised 4 or 5 times, in the first 3 years, however since then i have been just working along the line of whatever suits at the time.

While the business plan i wrote initially was based on the business i was running, how i was running it and what i was expecting from it in the next few years, i did not really allow for expansion outside what i was currently doing. None of the web based direction i am trying to take now, and really it was focused on selling products and services, not being a business that other people provided that function to.

I think that no matter what the business it can be very important to have a business plan if for nothing else then to keep yourself looking in the right direction.

[vangogh]

I think it's important too. I think a lot of people hear business plan and start thinking they need a very formal document to show around for investors, but an informal plan can really help you focus.

I've definitely moved way past my original plan. Same as you I couldn't really see the direction I would eventually take, but at the same time I still follow a lot of the ideas I originally put down in the plan. The major thing for me was it helped me focus on starting my business and it helped me to think about some important things I wouldn't have considered otherwise.

[orion_joel]

Yeah i agree, about the formal nature people begin to think about. Which may be very important if you are considering taking your business in a direction such as applying for a loan or considering taking the business public on the stock market.

The business plan that i had did not really help me to get as far as i wanted with it, however i beleive that can be partially attributed to the fact i spent more time working on rewriting my business plan then actually trying to build my business in the early days when i had the time.

[vangogh]

Maybe with me it was that when I had just ventured into owning my own business and wasn't really sure how to go about it. I know in writing out an informal plan (mine's in a simple .rtf file) I started thinking about things I hadn't really considered before.

It got me to focus more on who my market really was and what I could offer the market that my competition couldn't

It really helped give me a direction early on even though I knew it was never going to be written up formally or seen by anyone but me.

[orion_joel]

Defining or knowing your market is probably one of the most important parts i think. Which is something i was never able to do with plan, when you are selling generic technology products, and consumables it is hard to define a market that doesnt lead to you attempting to include every market.

But i do agree that be it a formal or informal plan, fully printed and bound or in as you said an rtf file, it is an essential document to give you business direction and help you to think about it in a clearer more define way, that opens your mind to fully thinking it through.

[vangogh]

I know what you mean. The first time I tried to define my market I just kept thinking anyone who doesn't have a website. And then I thought well everyone who has a site might still need it redesigned or worked on so my market must be everyone.

When I was working on what kind of services I would offer I started refining things and that got me thinking about myself and what parts of web design and development were really my strengths and that led me to better define my market.

For example I like to teach other people how to do things. That led me to want to create more informational how to content which led to my blog. It also led me to code in a certain way to make it easy for someone else to open my files and make changes to their site. I've set things up for a few clients and with a phone call walked them through making certain design changes.

That kind of stuff lets me know my market isn't really everyone. Eventually I narrowed it down to micro businesses who were looking for more than just a site. They were looking for a web designer who they'd build a relationship with.

Knowing that I wrote my sales pages in a very friendly way. I say "I" instead of referring to myself by company name. I don't pretend to be a larger company than I am. It might mean some larger companies won't be so quick to work with me, but I realized while writing the plan that I probably wasn't best suited to be working with those companies. There were other people who would do a better job with them and I do a better job with an individual owning a small business.

[orion_joel]

I really do understand where you are coming from, i had the exact same start, seeing everyone as the potential market. I have had a lot more trouble getting out of mindset though. My primary product range is ink and toner supplies, a consumable literally everyone needs, while i can narrow it down, to business or consumer, this still poses the problem of a fairly large market.

I have tried a few different campaigns that i have just gone to the phone book and taken a listing of say 30 real estate agents in the local area or some other type of business, but i still have the issue of the product does not lead itself to segmenting the market.

[vangogh]

Yours is naturally going to need to be a larger market than mine given the differences in business models. There are probably still ways to differentiate yourself though which is what will define your market.

I don't much about ink and toners so the following may be totally off, but you could say go after markets for specific printers. You'd make sure all your ink and toner was compatible with HP printers for example. That does limit who you sell to, but it could help you focus where and how to advertise.

You could provide help files, FAQa, tutorials, or whatever on HP printers to keep as many HP printer users at your site.

You could add HP or Hewlett Packard to all your AdWords and cut out some of the keywords you bid on and have the ones you do bid on be more focused on your product instead of the general market. Overall your ad spend should go down.

At some point if you capture the HP market you could then expand with your Canon line of ink and toner.

Again I'm hardly an expert on ink and toner so the above may not work, but it was the first idea that popped into my head for how to refine the overall market.

[Blessed]

I have one in my head - but it isn't written down, I'm probably going to wait until the beginning of the new year and try to write a plan for that year I realize that isn't the best way to do it... but, I know myself too and I think that is what is going to happen. I'll have a full year to look back on and will feel more organized about what I'm doing.

[vangogh]

You might just want to make some notes for yourself now. With a lot of things I'll create a very simple .txt file and just start putting down my thoughts whenever they come to mind. That way you don't lose them before you're ready to write them out as a plan and it seems to help motivate me to keep thinking about what I'm making notes about.

[Blessed]

I actually have been doing that @Vangogh, I just need to do it in a notebook or on the computer instead of on the backs of napkins and receipts :D

[vangogh]

The backs of napkins work for some people you know. :)

I need to write things down in a notebook or in a file on my laptop. It took me a long time to learn that too. I used to lose ideas all the time.

[DannySantos]

I'm not in business at the moment myself, but when I was, and I was starting out, I wrote a business a plan. However, I knew nothing at all about what a business plan should contain, I simply wrote down everything I thought to be relevant to the business, that me, my business partner, and the two sources of funding that we were chasing might like to read.

So it was made up of (actually I should probably mention at this point that it was a social networking website that we were building) plans for the actual site, market research, necessary funding, advertising ideas, timescales, and a few other bits.

I will no doubt be having another stab at another business shortly (finding websites to build is getting harder :D) and when I do, I will stick to what I did with the business plan, it was a big help throughout the whole start-up period

[vangogh]

I didn't know much about what I was doing either when I first started. I followed a sample plan (http://www.bplans.com/). I think the outline for the basic plan is listed earlier in this thread too.

I read through the sample and then removed everything except for the outline and filled it back in. I found it helped a lot when it came to thinking about some things I wasn't considering and it helped give me some direction in a few things. It was an informal plan written for me, but it was well worth writing it.

[orion_joel]

DannySantos - I don't really think that it is getting much hard to find websites to build) but converting ideas into something that is commercially viable, and building the traffic for it.

As it stands now, my business plan is in it's 5th incarnation, and has spawned at least 5 other possible plans for other differing models of the business. As such they may not all be used but it has given me good practice at playing with the wording of different sections of the plan.

One thing that i have been thinking about is at the beginning of each year creating a business plan for the year ahead, more so for all i want to achieve in the coming year business wise, then for one specific business. Which i would review at the middle of the year, and try to adjust my strategy so that i would meet my goals or adjust the plan so i still am working towards a challenge.

[DannySantos]

DannySantos - I don't really think that it is getting much hard to find websites to build

I agree with what you are saying, but I was meaning finding other peoples websites to build - there are a lot more designers around these days and everyone seems to think that their son, niece, brother or friend can build them one for free rather than having to pay someone like me to do it for them

But if you were referring to websites to build for yourself, I agree that its still relatively easy to think of something

[KristineS]

I agree with what you are saying, but I was meaning finding other peoples websites to build - there are a lot more designers around these days and everyone seems to think that their son, niece, brother or friend can build them one for free rather than having to pay someone like me to do it for them


I don't build web sites for a living, but I can't tell you how many times I've heard that. "Oh my nephew can build me a site and it will be cheap!" So then the nephew builds the site and it is cheap and looks awful. Why do people think they can skimp on something so important?

[DannySantos]

I don't build web sites for a living, but I can't tell you how many times I've heard that. "Oh my nephew can build me a site and it will be cheap!" So then the nephew builds the site and it is cheap and looks awful. Why do people think they can skimp on something so important?

Because we're all essentially cheapskates :D

I think if you don't know anything about websites, you wouldn't really see the point in paying all that money for one when you can get one for free/cheap

Thats an essential part of my selling technique, outlining the difference in quality between a professionally designed site (apologies for blowing my own trumpet ;)) and an amateur one

[vangogh]

We're in the same boat Danny. I think if your site is meant for personal use than go ahead and call your nephew, but if your site is meant for business hiring a professional is a good idea. A website is the online equivalent of your physical store. I wonder how many people would hire their nephew to build their physical store just because he knows how to use a hammer.

As for our businesses we just need to set ourselves apart and get the message across that we do offer more value than someone's non-designer relative. It's tough at times and frustrating too, but not impossible. I also try to remember that there are still quite a lot of websites being built and more than enough people who do see the value to keep us working.

Another good thing to do is listen to your market to hear what it wants. If they want to pay less than it's up to us to figure out how to give them the same site in less time and less money. If the market is more concerned with results than the cost it's up to us to find ways to make our sites more effective and meeting business goals regardless of the price.

[orion_joel]

A website is the online equivalent of your physical store. I wonder how many people would hire their nephew to build their physical store just because he knows how to use a hammer.

Vangogh, i really understand what you are saying here, because i was trying to think of some sort of similar comment to make. However i think seriously to many people take this approach with their physical store, just like with anything else. While a large majority of retailers realize that paying someone to do a quality professional job is the best way, there is also a lot of DIY shopkeepers, and it makes their business look cheap and often they are the ones that don't stay in business.

[vangogh]

You might be right. I think somehow people understand the concept more when it's put into 'brick and mortar' terms. People would hold shop in a store made of cardboard, but they don't seem to mind putting up a site on code and design that's the equivalent.

The funny thing is the people who will put up the cheapest site of physical store are often the quickest to complain about the lack of quality in someone else's.

[KristineS]

I think a lot of people are still trapped in the "we need a web site any kind of web site" mentality, and don't realize that the novelty of having a web site went away years ago. Now it's expected that you have a web site and people who shop online are much more savvy about how a good web site should work. It isn't enough to have a presence on the web anymore. Now your presence also has to be a good one.

[KarenB]

"Did you write a business plan?" (as Karen slinks away, hoping that no one will notice that she didn't...)

In the beginning, Karen didn't write a formal business plan on paper, but did have one in her head.

What Karen didn't realize is that despite her perception that she had initially covered all the bases of running her own business, she had barely touched the surface. The formula that she thought was the easiest path to direct success didn't turn out to be so.

Her initial thoughts were:

"I provide top-notch services. I am reliable and go well above and beyond what clients expect. How could I not succeed?"

What Karen didn't realize is that while it's fine to have a satisfied client base, in order for one's business to grow, one needs to continually increase that client base. It has to be a dynamic environment. There is a natural ebb and flow to the needs of any one client and one can't rely on any one particular client to sustain one's business.

I have never been asked to provide a formal business plan to my banker, but I realize that by putting my plans and strategies onto paper (in whatever form) will encourage me to address a lot of the aspects of running my business that I need to think about in order to succeed over the long term.

Karen

[vangogh]

I like the 3rd person story.

I think what you found is the same thing I did. Writing the plan does help you think about some things you wouldn't otherwise. Your plan doesn't have to be formal. Mine is still in an .rtf file. But spending even a few days working on one gets you to consider a variety of things you really should consider.

[JC]

I never did, I just go by convictions that I have. I like to think of what it'll be like to have a larger business or to make more money, but don't commit to it in a business plan because they're not my priorities. I do, as I grow, add more to my company's policy and that's the way I like it, then I have the freedom to deal with customers with integrity and without the pressures that lead people away from it.