Today, we're going to talk about writing a business plan for a new concept to clarify your ideas, get investors, and a lot more... Now, business plans aren't usually a part of my process - but it is this time.
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-- Transcript --
I had to do something in the last couple of weeks that I haven't had to do in a long time: write a business plan. Years and years and years ago, I won a business plan competition in Erie, Pennsylvania. I submitted two business plans, the top eight got picked, and then... let me back up a little bit further. In the first year, I submitted two business plans. I ended up getting selected for the finals. I presented two business plans on stage; the first time I was ever on stage in front of an audience, I fucking bombed. I was choked up; you could hear me breathing weirdly. Maybe you couldn't listen to me, but I felt like you could hear me.
It was just an absolute nightmare. That year, I remember leaving the auditorium, and my business plans were in the garbage, which bothered me. I remember looking down at the trash, and the business plans were in the garbage, and I was like, "Mother fucker. I just put hours and days of effort into thinking through this business idea, and then, done." That bothered me. I learned that one of my most significant pain points was in doing business, which was, talking to people. One of the reasons I'm able to do this video is that I bombed that business plan presentation.
The following year I returned, submitted two business plans, went to the finals, and killed it. I ended up winning the business plan competition; I won $7,500. I ended up building my first real computer with that money. One of the two business plans was for a mobile blogging application in 2008. That was a long time ago. The second one was for what I called I Film, an independent film website like Netflix back in the day. All in all, though, there were two business plans, I got to the room, and they were like, "Which one do you want to win?"
I was like, "The mobile blogging one is pretty cool," and they were like, "We think so too." I ended up winning for that one, and the rest of my entrepreneurial journey was... it wasn't easy by any means, but that's where it started, was those business plan competitions. Fast forward to now, and has created dozens of companies, having worked with hundreds of businesses, thousands of entrepreneurs over the years, and building sales funnels, and marketing, and all that other shit; here I am, having to write a business plan for a new business concept. When I come up with business plans and brainstorm new offers, that's what we do; it offers. That's really what I'm looking for, I'm looking to create an offer that can start selling, and you can build a business around it. That's the thing, but this wasn't that.
I had to devise a business plan to talk to this business about other people. Usually, this stuff is internal; we go and market it. I need some additional buy-in from some other people. That all is going to be coming down the way. You'll probably learn about what that business is in the next two, three, or four months. I don't want to spoil it, if you will, not just yet.
What happened was I had to write another business plan. Writing a business plan is fucking hard when you haven't written one in a while; you haven't exercised those muscles because it's just as much talking about what is and what will be. When I write stuff, it tends to be very sales in nature. I started the process, but I was like, "All right, let's find some resources for business plans. Let's figure out what we need to do and what we need to create. Then, we'll start filling in all the blanks."
What I wanted to do is walk through a business plan template and talk briefly about each of the sections in it so that when you write a business plan, if you ever need to, you can know what each section means. We're going to flip over to my screen real quick. Here we go.
This is just a very generic business plan template. It's one of those things you download, and you start filling in the blanks. All in all, this is the title page, your business name. When you prepared it, who designed it, you, what is your title going to be, blah, blah, blah, email address, this is all easy stuff. Once you get down here, this table of contents starts to take on a life of its own. It always begins with an executive summary.
Generally, the executive summary is an overview of what your business will do. How is it going to make money? Who is it going to serve? What your objective is, what your target market is, what the business's marketing plan is, what the competitive analysis and advantages are, it's business 101 stuff. Especially when it's an online business, you can paint a target and dial in your target market like that. Before, it wasn't necessarily that way, in the olden days of business.
If you want to talk through your products and services, that will be a big one. How are you going to make money? What are you going to charge? How are the things that you're doing going to produce revenue? Marketing plans, sales plans, do you have a sales process? Will you need one? All good stuff. Business plans are just as much about forecasting what you're going to do as much as anything. The one thing, especially in going through all the business plan competitions and stuff, you never want to say, "The market is $1 billion, and if I just claim 1% of a $1 billion market, I'm going to have a huge business." I'm not saying it's never going to happen, but when somebody hears that, they're like, "You have 100,000 competitors, or 50,000, or whatever it is. There's a ton of competitors out there." You want to ensure that the forecasts are believable and rooted in numbers.
You want to talk through staffing and people. If your business is location specific, you want to include location information, technology and equipment, and what you need to pull it off. Do you need software, tech servers, hardware, data centers, and everything else? Then, of course, the key performance indicators will let you know whether you are doing well in your business.
The executive summary is the high level, "This is what you're going to be doing, this is what you're going to be selling, this is who you're going to be affecting, this is who you're going to be working with, in terms of customer or client." All that stuff needs to be detailed and written so that anybody can print it out, pick it up, read it, take it with them, mark it up, and ask questions.
The better you think through all of those specifics, the more funding you're going to get, the better somebody's going to understand your idea, and the better follow-through you're going to get from the people you need to present to. That still doesn't cloud getting money because your business needs to generate revenue. A business plan doesn't do shit. Money in the bank does shit. That's why companies are around. It's one of the reasons I never wrote them because I'd instead test an idea, or a business, start putting money in the bank, and by the time you know it, you're well past the stage of a business plan, and you're already producing revenue. When making revenue, many objections go away because you already have product/market fit.
All right, next in the business plan is your company description, company overview, and company mission statement. I used to think this stuff was all fluff. I have a personal vision statement that I rewrite every day. There is a company mission statement. Mostly, this company mission statement, and all of those types of things, the reason they are essential for your business is that you need to weigh everything you do in the future against something, against a mission statement, so that you know if you're going down the right path or the wrong path. If you have a customer mission statement like Google, "Do no evil," you know if you're doing something terrible. You're creating a product line, funding research, and development, or doing something that will inevitably do evil. That's not part of your mission statement. You want whatever it is you're doing to move you further down the path of growth and success. That's really what the mission statement does.
As I said, I didn't necessarily deal with mission statements, vision statements, or any of that shit. Still, once I started defining my mission statement and the mission statements of the businesses, it let me know that we were either doing right or wrong. A great example is Done For You. A couple of years ago, we used to sell a bunch of education, or we tried to sell a bunch of education from the Done For You brand. It wouldn't sell. It's not that it wouldn't sell; it was challenging to deal with. When I started thinking about it, it made sense because when somebody comes to Dun For You, they're expecting to have all the work done for them; that's fucking obvious.
At the same time, when you're head down, working on stuff, you're not thinking about it; you're just lumping it all in the same basket. That's why we bought the domain name and built the partner brand Done With You, which is much more an education and mentorship brand. It works much better that way than putting it all inside the same basket. If it hadn't been a mission statement, I wouldn't have realized it so quickly once it was brought to my attention.
Next, products and services. This is a longer, more detailed explanation of what it is you're going to sell, how you're going to sell it, what you're going to be doing, what your pricing is going to be, what your marketing plan is going to be. Are you going to be doing old, traditional, boots-on-the-ground stuff? Are you going to be doing digital social media stuff? There's a section in a lot of business plans for market research. The market research I tend to cite is keyword-specific trends and several monthly searches. Everything we do is digital, so it falls back on what people are searching for online. That tends to be the market research that I conduct. You can look at competitor research, pull all the competitor ad campaigns, and put it here. This business plan is very much geared toward a high-level discussion of what your business is going to be.
Target customers is another good one. When we start working with a client, we put them through a customer avatar canvas. It is; who is your target customer? Where were they before you? Where are they after you? What have they been able to realize in between? What are some of the features and benefits they could do? The beginning parts of that are this targeted customer. What is their age, gender, location, income, occupation, and education level? Who are they? You also want to include the barriers to entry. Why won't other people follow you into the same business? The business that we're getting into has high capital requirements. It has not necessarily have high marketing costs, but... I don't want to get too much into it, but it would cost a lot of money to replicate the business for the business plan I'm working on under the right circumstances.
We have a lot of it already figured out, so it makes the cost significantly lower, which is why we're able to run at it ourselves. There's some trademark consolidation and a steep learning curve, which are barriers to entry. A steep learning curve, very much agency funnel stuff. It's hard to do what we do. It's hard to write copy how it needs to be written. Those are some barriers to entry to consider there.
Threats and opportunities are other ones. What do you need to think about in this new business from a threat standpoint? What are some of your opportunities going to be? Competitive-wise, who are your competitors? Are they local? When I went through and put this list together, I listed all the local competitors within a 25-mile area. It might be local if it's a local business. It might be a national competitor if it's a nationwide business or online.
You want to talk about your positioning in your niche and the method of marketing your product and service. This stuff is easy, website, social media marketing, email marketing, and mobile planning. We don't need to get into the specifics of this like you would deliverables in each, but we want to ensure that they're addressed. Marketing budget, distribution channels, operational plan, who's going to be working, what you're going to be doing, location, legal environment, inventory, supplies and vendors, a lot of this stuff, the deeper you go in, you want to make sure that they're addressed. It's just a question you have to answer instead of things you need to think through.
Your answer is mostly going to be conjecture. You will mainly be making up your answers unless you've done this a couple of times. Again, the projected balance sheet is a forecast and sales plan appendices. I'll include this in the article accompanying this video, but this is a lovely template to build on when writing your business plan. Don't worry if you don't have an answer, don't worry if you haven't thought through something enough yet. The business plan is just a plan.
The consulting group, the management group, the advisory group, and the person expecting to read a business plan also hope that the business plan is updated. Out of the hundreds of companies we've worked with, we built 850 sales funnels in my tenure from a sales funnel standpoint. I would have to expect that next to none of them have had business plans.
Business plans are essential for communicating your idea to somebody who is not in your business or is not working with you. You must be able to articulate that, and writing a business plan helps you focus on something long enough to figure out some of the more complex issues you're not going to get around just by reacting. It will benefit you in writing this document, even if it's just for yourself.
That's about all I've got for you today. A business plan, like it or not, there are some situations where you will have to write it. This is an excellent place to start. If you have any questions, just hit us up, or ask a question below, and we'll get you taken care of. All right, talk to you soon. Thanks, bye.