Friends and family are always coming up to me asking for my opinions on their latest business idea or website and more and more I am starting to find myself giving the same advice time and again. Write it down! I don’t know for sure that your business is going to make a million or break the bank – but what I do know is that you won’t even get a bank account for the business if you don’t write it down – and filling in the forms these days to open a bank account is not as straightforward as it was 20 years ago I can tell you.
It dawned on me just how often I have been wanting to say this to people again and again when my wife and I broke open the Captain Morgan the other night. Rum and coke is a great drink for relaxing the tongue without giving it that sharp “just drank Gin, now beat me” attitude. As a drink we found it on honeymoon a decade back and it’s amazing our livers are still functioning to this day.
Anyway – my wife and I were drinking and she asked me for maybe the 50th time about her used items exchange idea for the local village. Or was it her “Mums back to work” recruitment agency? Anyway – I finally said “write it down” and however the conversation went on from there, I had to come back to the same advice as the only “next step” that was viable in the development process.
Even if you are a local plumber looking to have your own 5 page website, you still need to write it down. Going to a web designer and saying “please could you build a simple website, nice and cheap” already got twice as expensive as if you went along with a word document to the same guy and said “can you make a website out of this text”. It has to be your text in the end doesn’t it? So you are going to have to write it however much you pay. All I am saying is that you need to write your thoughts down, not just mull them over in the pub.
Well – oftentimes I am a disaster at listening to me own advice. But not this year. For better or worse, I have written down my business plan for my main business, and properly budgeted income and expenditure right down to the postage costs. Then I agreed the plan with my fellow directors and then summarized the objectives and delivered these to the entire team (15 people). Having written it down, we had much better boundaries for the annual review round and a clear idea of what needs to change to be able to meet our targets.
Writing a business plan – in the first instance at least – is not about WHAT you write as much as it is about THAT you write anything at all. 90% of business ideas fail right there. What – would it kill you to write the idea down on one sheet of paper? This blog post is more developed than 90% of business ideas. We have a one page business plan in the office, which is maintained and updated monthly – in addition to the more elaborate business plan. But if you are trying to get your business off the ground, here’s my 10 things you should write down before you even talk to a friend in a pub.
1. An advertising headline and tag line that explains and sells your product all in one go. Mastercard are calling Mastercard “the new change” encouraging micro-payments on cards these days. You know the product, you know the USP, you know that you don’t need to go to the cashpoint anymore to buy a sandwich from Tescos.
2. Write down a list of boring things you will need to arrange and very rough costs in money AND TIME. Here’s a few:
- Bank Account: £nothing ….. 1/2 day
- Legal trading name (LTD Company?) £50… 2 hours
- Website domain and hosting space £10… 2 hours
- A place to work from? A filing cabinet?
- An accounts package?
Usually – the realization that you either need an accounts package or alternatively a VERY expensive accountant right at the start puts most people off right there.
3. SWOT analysis on your competitors. What – going to Google and finding out who they are will kill you?
4. A spreadsheet with cash-flow projections based on SALES NEEDED after costs are incurred, not “SALES EXPECTED” before costs are decided. Bank managers have given up looking at projections because they all start with “I will sell 2 more memberships every day ongoing, so I will break even in six months and be a millionaire in two years… just look at the figures”.
5. Write down some building blocks about how you are going to meet your sakes projections… Look at the sales funnel that you will need so you can get early warning signs if you are missing the target. I am looking for a certain level of new business each month for my main company. This equates to for new contracts a month, based on experience. To get this I need 12 opportunities assuming I convert one in three. Most leads are not going to even turn INTO opportunities, so to create 12 opportunities I need (say) 36 leads, or about two every working day. Now I can get these through the web, through network meetings, through conferences or through cold calling… (except I could never personally do cold calling) but the point is that for 4 new bits of business I need nearly 40 people saying “hmm… tell me more”. All of a sudden that first million looks a little harder to attain – or easier if that’s your thing.