Skip to main content

The Importance of a Business Plan

You’ve got an idea for your business and you’ve got the giddy excitement that comes with knowing that you have an opportunity to make this idea a reality!

So you work out your business name, buy the domain and set up the website and all the social media accounts! You go to as many networking and business groups as you can and start advertising in every way you can think of.

To start off business is slow but you expected that, then you have a busy week which is great! Your business is taking off and you’re ready to take over the world. Then a couple of weeks later, business slows again. No problem, you think, it will pick up again. Maybe it does, maybe it doesn’t – sounds familiar doesn’t it?

Do any of these sound familiar too?

  • Business isn’t consistent so you keep your prices low to attract in customers.

  • You’re constantly available on social media so you can answer potential customers ASAP.

  • You pitch a lot but maybe only get 1 client out of 10 pitches.

  • Most of your customers aren’t even your ideal client! They’re hard work, expect far too much from you and want you to be available whenever they think of questions, even if that’s at 2130!!

So where did you go wrong? You set up all the systems and apps that were recommended to you, you have your marketing in place and you’re getting referrals from previous clients. You’re doing all the right things, but you don’t have a clear destination so you keep getting lost.

A business plan can make all the difference!

A business plan is not just for an executive board meeting, or to gain funding. You don’t even have to show anyone your business plan; but it is important that you have one for your own sanity!

Have you really looked strategically at your market, clientele and work and made a 3/5 year plan?

What should a business plan contain?

What should I put in a basic business plan?

  1. What does your business do?

    • This seems obvious and simple but write it out; what are your core products/services.

    • What do you NOT do; this is as important if not more important than what you do. So many times people will ask you to do something you are capable of, but just because you CAN doesn’t mean you SHOULD!

    • Knowing these points will help you to decide if a client or a project will take your business in the direction you want it to go, and if it won’t, to say NO!

  2. Who is your ideal client?

    • Don’t just target anyone willing to pay for your services; you are a specialist and you should be targeting the right people.

    • For example, some niche their work into a particular industry such as wellness brands or corporate clients, others niche their skill set working on becoming a specialist in one or two areas.

    • Personally, my ideal client isn’t within a specific industry, but is based on where in their journey they are. I target established businesses who are struggling to take the next step to grow, expand or escalate their services.

    • Knowing your ideal client will help you to identify clients who are not right for your business, nor you right for them. It is better to pass a client on, than take on a client that will not help your business in the long run.

  3. What does SUCCESS look like for you?

    • How will you know if your business is doing well, or under performing?

    • Have you asked yourself the tough question: at what point will I stop this business? How long can I maintain zero profit before I have to try something else?

  4. What is your WHY?

    • I’ve spoken about this previously but it is so important to know!

    • WHY did you set up your business? Were you simply filling a gap in the market, maybe one you yourself had needed a solution for? Did you set up your business to spend more time with your partner or family, or to gain some control over your workload?

    • Knowing your why will help you to keep on track and help you set goals for yourself. These can be anything; affording a nice holiday, a new house, or being able to treat yourself to some self-care every month but it should be linked to your success.

    • Firstly, these goals will help to motivate you when things get tough (and they will).

    • Secondly, it is so nice to look back at these things and be able to say “I couldn’t have done that without my business being a success!”

  5. How much do you want to earn year on year?

    • Set yourself a minimum of 3 years, maximum of 5 years as this is enough to push you but remain realistic.

    • You do not have to predict/aim for huge growth every year as this may not work in your market, but as your experience is growing and you are getting more efficient/effective, you deserve a pay rise just as much as you would if you were employed!

    • Knowing how much you want to earn will help you to set your prices. The number of workable hours in a week is finite, so the only variable to earn more is to charge more.

    • If you’re not sure about how much you should charge, consider the following (a) what is the market average for the service/product you are selling (b) how much could you earn if you were doing this for a company as an employee, if the salary you have previously received was £30,000 then it’s fair to presume you can make this freelance as well (c) if neither of the previous two work, decide an annual figure you would be happy with and then break it down. For example, £30,000 divided by 48 working weeks in a year (20 days holiday allowed for) is £625 a week. You can then break this down in to an hourly wage or price per project/product based on how many of those you can put out in one week.

  6. Your business plan should be geared towards you being successful and having plenty of work, so put some thought in to what you will do when you are at max capacity.

    • Do you want to expand and hire? Taking people on in to your brand can be incredibly scary – will they have the same quality of work as you? Will they work as fast or focus on the same details? What if they steal your clients?

    • If hiring is in your plan, make sure you have a tight contract to protect you and your business.

    • When hiring, it is better to hire someone who has the same values and ethics as you than the perfect experience. Skills can be taught but it is much harder to teach someone your values.

There is plenty more you can put in to a business plan, however the above will give you enough to know the direction your company should take and how you are going to get there. This should be a live document, keep referring to it, keep it updated and check back in with your goals to see how far you have come!

If you want any help writing your business plan, book in for a Power Hour with me!

Leave a Reply