Business Plan Overview

by Shaunna Leclair | May 31, 2021 | Business, Finances, Legal, Massage Income, Taxes

Why Do You Need a Business Plan?

A business plan will help you build a business that will support you financially, have an impact on those around you, and leave a lasting legacy you can be proud of.

A business plan helps you to peer into the future and predict different outcomes. Though it’s certainly not perfect, it enables you to map out where you currently are and where you’re headed. Specifically, a business plan helps you:

Estimate total startup costs
Project revenues and profits
Convince investors
Compete from the start
Anticipate challenges

A business plan helps keep you on track. It ensures that you focus your attention on the right things and enables you to avoid mistakes that could sink you. We’re going to walk you step-by-step through the process of creating a solid business plan.

Before You Start

Unfortunately, many business plans are wildly unrealistic. The initial excitement of starting the business often causes entrepreneurs to massively overestimate how successful they’ll be and underestimate the challenges they’ll encounter.

To be effective, a business plan needs to be realistic. Before you launch, you want to be relatively confident that you have a good chance of succeeding.

In many ways, a business plan should help you decide whether your idea will pan out. You may put together your business plan and then realize that the potential outcome isn’t as bright as you initially thought. That’s okay. It forces you to go back to the drawing board.

Take the necessary time to do the market research, analyze your financial needs, and map out your strategy for the future. Don’t look at it as the thing that’s preventing you from getting started. View it as building a foundation for a successful, lasting business.

Executive Summary

The first section of any business plan will be the executive summary. It gives people a general sense of what your business is all about, what products or services you provide, where you’ve been, and where you’re headed.

The Small Business Administration recommends that your plan contain at least the following six things:

Mission statement
General information such as founding date, names and roles of founders, and other essential details.
Company highlights, including financial successes and other vital successes
Products or services that you sell
Financial information, including funding goals and current sources of funding
Plans for the business

Think of the executive summary as a detailed elevator pitch. It highlights the most critical points of your business plan without going into all the details.

You may want to consider writing your executive summary after you’ve written the rest of your business plan. That way, you’re more familiar with all the relevant information.

Company Overview

This section provides more detail regarding exactly what your business does and how it’s structured. You can start by explaining:

The industry you’re in
Your primary customer base
The big problem that you solve for customers
How you solve that big problem

Essentially, you’re explaining the reason for your business’s existence. You’re identifying a specific customer need within a particular market and then clarifying exactly how you’ll meet that need.

The overview section functions as your Unique Value Proposition. It clearly and concisely explains the unique value that your business offers. If you’re struggling with this section, try to answer the following questions:

Who do you serve?
How do you serve them?

Market Analysis

The market analysis section of your business plan provides in-depth information about your industry, your specific market, and the competition. If this section is done correctly, it assures readers that you know what you’re getting into.

In your market analysis, seek to include the following information:

Essential industry information: Size, growth, trends, and other pertinent details.
Target market data: Ideal customers, their specific needs, demographic data.
Target market size: Yearly amount spent, purchase frequency, projected growth.
Market share potential: Percentage of target market you can acquire.
Barriers to entry: Things that might make it challenging to succeed in the target market.
Competition: Top competitors, market share, strengths.

This section will take a significant amount of research, but it’s time well spent. First and foremost, it prepares you to succeed. Second, it helps investors know that you’ve done your due diligence.

Organization and Management

Next, describe how your business will be organized and structured. First, spell out the general structure of your business, both in organizational terms and in legal terms. Where does each key stakeholder fit into the big picture of your business (include an organizational chart)?

In terms of legal setup, are you:

LLC?
S-Corp?
C-Corp?
General partnership?
Sole proprietor?

Next, describe the background of key members of your team. This part is significant if you’re seeking funding. Investors want to know that you have experienced, successful individuals who can ensure that your business also succeeds.

Finally, describe any key hires that will be necessary. This may not be immediately relevant, especially if you’re just getting started, but it will matter much more as you grow and expand.

Products and Services

This section explains what products or services your business will provide to customers. Start by describing your particular product or service and the specific need it will meet. It’s imperative to clarify precisely how your product or service will stand apart from the competition.

Within this section, you should also discuss:

Product/service status: Is it ready to take to market?
Development objectives: If it’s not prepared to go, what steps need to be taken?
Proprietary information: Do you have any intellectual property, patents, or proprietary information essential to your business’s success?
Supply chain: Do you depend on any suppliers or vendors?

Make your product or service shine in this section. It should be abundantly clear both to you and the reader that you have something unique to offer and that you’re in a prime position to attract customers.

Marketing and Sales

This section explains how you’re going to get your product or service into the hands of customers. Your objective in this section is to clarify how you will make customers aware of your product or service and how you’ll convince them to buy from you.

The first element in your marketing plan needs to be positioning concerning your competitors. Will you position yourself by offering:

Lower price?
Superior quality?
Superior service?

Next, discuss the specific promotional methods you’ll use to get the word out about your product or service. Additionally, clarify the metrics you’ll use to evaluate whether your marketing efforts are working (leads generated, social media reach, website visitors)

After laying out your marketing plan, discuss your sales plan. What method will you use to convince customers to buy from you? ○ Cold calling?

In-person meetings?
Webinars?

Next, talk about who will be doing the selling. If you need a sales force, who will train them, and how big will the team be?

Lastly, layout the budget you have for both sales and marketing. This will help readers gauge the scope of your efforts and possibly estimate results.

Financial Projections

In this section, paint a clear picture of your business’s current financial status while also mapping out where you hope to be in the future. Investors will closely examine this section to determine whether they want to give you funding.

If you’ve been in business for a while, include as much past financial data as possible, including:

Income statements
Balance sheets
Cash flow statements
Operating budget
Accounts receivable and payable statements (if appropriate)
Documentation of any debt you’re carrying

Your financial projections for the future will either be based on your past data or industry and competitor research (if you don’t have past data). If you’re not sure how to create these projections, consider hiring an accountant or financial advisor to help you.

Funding Request

In this section, you’ll lay out exactly how much funding you need over the coming five years. Explain how you’re going to use the budget to achieve your goals.

Include the following details in this section:

The amount of funding you need right now
The funding you’ll need down the road (up to five years)
The type of funding you desire (loan, investment)
The terms you’re requesting for the funding

Additionally, explain how you will be using the funds.

Will you be acquiring inventory?
Paying down debt?
Hiring employees?

It’s also critical to lay out your future financial plans so that investors have a good idea of what they’re getting into.

As much as possible, try to customize your funding request based on who you’re talking to. If you’re asking a bank, provide them with a repayment plan. If you’re asking an investor, give them an estimated ROI.

Appendix

The last section of your business plan is the appendix. The appendix includes supporting information and documents that substantiate what you’ve written in the previous sections.

You may want to include:

Credit histories
Permits
Product pictures
Legal documents
Licenses
Patents
Contracts

In all the previous sections, you’re trying to paint a compelling picture of what your business is like and where it’s headed. You want to provide the reader with enough data to help them grasp your vision but not so much that you bog them down.

The appendix allows you to provide extra details to the reader without disrupting the overall experience. If the reader wants to look at these details, they can refer to the appendix.

Clarify the Problem within Your Business

by Shaunna Leclair | May 25, 2021 | Business, Finances, Legal, Massage Education, Massage History, Massage Income

Clarify the Problem

Before you can identify a solution, it’s important first to clarify the problem. Why is your business struggling in the first place? If you don’t have clarity on the specific challenge you’re facing, you won’t know what steps to take to save your business. Take some time to think about how you got to where you currently are.

What happened that you didn’t anticipate?

What things went wrong?

Some common problems businesses face are:

1. Market changes. Economic factors, new technology, emerging competition, and many other things can cause the market to change. Survival requires the ability to adapt to changes as they happen.

2. Failure to understand the target customer or market. If people aren’t interested in your product or service, there’s a good chance you don’t understand your customers or market. Dig deep to understand what people truly want and what motivates them to buy.

3. Poor pricing strategy. If your prices don’t match the customer demand, you won’t sell much. It’s crucial to understand what customers are willing to pay, as well as where your product sits in relation to your competitors.

4. Insufficient funds. Not having enough money on hand will quickly tank your business. You must pay close attention to cash flow, financing, sales, and more.

5. Too much growth. Growth is a good thing, except when there’s too much of it. If your business grows too fast, you might not be able to keep up with demand.

Identifying fundamental problems within your business can be a painful exercise. No one likes to be reminded of ways they’ve failed. But if you want your business to thrive during challenging times, you must be able to put your finger on the primary problems.

If you’re feeling sick and go to the doctor, what’s the first thing they try to do? Determine what is causing the illness. Only then can the doctor prescribe the proper treatment. If the doctor has you start taking random medications hoping that one will work, you won’t get any better.
The same principle is true in business. You must identify the cause of the problems before you can determine the proper solution. The sooner you identify the issues, the better.

As Jim Collins wrote in Too Mighty To Fall:

I’ve come to see an institutional decline like a staged disease: harder to detect but easier to cure in the early stages, easier to detect but harder to heal in the later stages. An institution can look strong on the outside but already be sick on the inside…

Focus on Your Customers

Before we get into details about specific actions to take, let’s look at the big picture. What is at the heart of every business, including yours? Customers. If you don’t have customers, you don’t have a business.

When deciding what actions to take to strengthen your business, always keep your customers front and center. If you make changes that end up hurting your customers, you’re ultimately hurting yourself. You’ll lose the people who are at the very center of your business.

Airlines are an example of what happens when you forget about your customers. Over the last decade, airlines have gone to great lengths to cut costs and increase profits. Service declined, and customers were hit with various fees they never had to pay in the past. The result? Customers are getting increasingly frustrated and fed up. It seems that everyone has an airline horror story.

Flying, which was once seen as a luxury, is now often considered a necessary evil. The moral of the story is to always keep your customers at the top of the priority list. Before making changes:

Consider how they will affect the customer experience.
If customer experience is one of your key competitive advantages, be especially careful about changes. If you destroy one of your competitive advantages, you may end up dealing a death blow to your business.
If you do make changes that will directly affect the customer, communicate those clearly.
Explain to the customer why you have to make the changes and the outcomes you expect.

The more transparent you are with your customers, the more understanding they’ll be.

Marketer Neil Patel is an excellent example of this kind of transparency. For several years, he made a particular software available for free. Eventually, however, the costs became too high, and he was forced to start charging for portions of the software. He sent a letter to his customers, clearly explaining what was happening. He detailed his costs, making it clear that he didn’t have the resources to continue making everything available for free. Then he laid out exactly what would happen moving forward. You would be wise to follow Neil’s example.

Explain why changes are happening, when they will take effect, and how they will affect customers. During times of global crisis, it is essential to keep the focus on customers. People will remember the actions you take. If you seek to serve your customers, you will build up a vast amount of goodwill even at the expense of profit. For example, during the coronavirus crisis, many companies sacrificed financial gain for the sake of their customers:

● Many educational companies made their resources free to parents who were suddenly forced to homeschool their children.
● Audible gave away free audiobooks for kids.
● Moz provided free courses on search engine optimization to help businesses strengthen their online presence.
● Loom offered significant discounts on their video recording platform so people could stay in touch with family and friends.
● Bill.com made its platform available for free for 90 days to anyone affected by the coronavirus.

All of these companies are losing out on potential profit by giving these things away for free. But customers will remember the actions taken by these businesses and will be much more likely to support them in the future. It’s about building your brand by doing good for others instead of focusing on the bottom line. Bottom line: If you keep the focus on customers, there’s a much greater chance that your business will weather the tough times.

Business Mastery can help you clarify these issues.

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It May Be Hard, Never Give Up

by Shaunna Leclair | May 19, 2021 | Business, Finances, History

Running a small business isn’t easy, even during the best of times. According to the United States Small Business Association:

● 30% of small businesses fail within two years
● 50% fail within five years
● Only 25% of companies last 15 years or longer.

Any small business owner will tell you that running a small business is challenging. You have to manage a thousand moving pieces, ensuring that you stay on top of cash flow, employee performance, sales, marketing, and many other factors. Many owners struggle to manage all the different elements and their business struggles as a result. When circumstances get tough, running a business becomes an even more significant challenge.

Throughout the years, many events have occurred that placed a squeeze on businesses:

● The Great Depression

● World War I and World War II

● The Cold War

● The 2008 housing market collapse

● The 2020 coronavirus pandemic

During these difficult times, many small businesses folded under pressure. They simply weren’t able to keep going. But many companies have survived these incredibly challenging circumstances. Some of them have even thrived.

In the early 1920s, Prohibition prevented the sale of alcohol in the United States. As you can imagine, this made things difficult for producers of alcohol. But many companies adapted and came up with creative ways to save their businesses:

● Yuengling made ice cream

● Pabst made cheese

● Coors produced dinnerware

● Schlitz churned out chocolate

● Stevens Point Brewery went into the soft drink business

The point is that your business can make it through hard times. You’ll need to get creative. You’ll have to take decisive action. And you’ll need to make tough decisions. But you can do it!

In his book How The Mighty Fall, Jim Collins wrote: The signature of the truly great versus the merely successful is not the absence of difficulty, but the ability to come back from setbacks, even cataclysmic catastrophes, stronger than before. Great nations can decline and recover. Significant companies can fall and recover. Great social institutions can fall and recover. And great individuals can fall and recover. As long as you never get entirely knocked out of the game, there remains always hope.

Don’t give up. There is always hope! In this small business survival guide, you’ll discover practical steps to take that will help your business thrive amid difficult times. Doing these things won’t make things “easier,” but they could be the difference between your business surviving or dying. Ready? Let’s dive in.

Manage Your Mindset

If your business is struggling, it’s essential to manage your mindset. When things get tough, it’s really easy to enter a downward mental spiral. You start thinking about all the circumstances that brought you to where you are. You second guess yourself, wondering whether you would be in a better place if you acted differently. You begin to doubt your abilities and whether you can ever succeed. The more you engage in these thoughts, the worse you’ll feel.

As you work to stabilize and turn around your business, it’s crucial to maintain a positive mindset. Now, to be clear, this doesn’t mean that you pretend everything is okay or bury your head in the sand. It means that you maintain faith in your ability to bring about positive outcomes. A positive mindset also means that you are resolved not to give up. Keep striving to improve things and bring your business to a place of health. If you’re struggling to maintain a positive mindset, remember that almost every great business leader has endured struggles similar to yours:

● Thomas Edison failed thousands of times before he was able to develop a fully functioning lightbulb.

● Apple almost collapsed under bankruptcy when Steve Jobs was president.

● Bill Gates’ first business was a complete and total failure.

● Henry Ford’s first automobile business went bankrupt within a year.

Despite all these difficulties, these individuals experienced great success. Why? Because they persevered and were incredibly resilient. Steve Jobs said: I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance. It is so hard, and you pour so much of your life into this thing; there are such rough moments in time that most people give up. And I don’t blame them; it’s really tough. If you want your business to succeed, you need mental toughness. You must be able to persevere in the face of difficulty and keep going even when things look bleak.

Follow these steps to overcome a negative mindset:

1. Pay attention. It’s easy to let negative thoughts swirl in your mind without putting up a fight. If you’re going to overcome these thoughts, you must be aware of what you’re thinking. You need to be able to identify unhelpful mental patterns as they occur.

2. Question. As negative thoughts arise, question them. Is what you’re thinking true? Most likely, it isn’t. Mentally push back.

3. Silence. After you’ve questioned and answered your negative thoughts, begin to silence them. Avoid letting the same thoughts steal your mental energy. You know they’re not true, so shut them down at the start. Imagine that you have a remote and that you can mute your inner critic with the touch of a button.

4. Replace. As you shut down your inner critic, fill the silence with positive, helpful dialogue. Regularly remind yourself that you are strong, overcome challenges, and grow amid difficulty. As you push through problems and challenges, remember why you got into business in the first place. What big problem were you passionate about solving? What motivated you to take the risk of starting a business instead of playing it safe and taking a corporate job? Seek to tap into the emotions and desires that initially pushed you to create your business. They can be the driving force that helps you make tough decisions and get things back on track.

Business Mastery can help you navigate these challenges and create the mindset of positivity and success!