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A Fluid Business Plan Template for Your Microbusiness

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This post is part of a series called Kickstarting Your Online Microbusiness.
Deep-Dive: The 7 Best Online Microbusiness Models
10 Step Launch Blueprint for Your Online Microbusiness

If you've been following along with this Session on Kickstarting Your Online Microbusiness, you should have read our deep dive into the top seven online microbusiness models and have chosen the microbusiness that suits you. Next, it’s time to map out the specifics of how you will setup and run your business, and how you will ensure its success. We’ll do this using a business plan.

Before you run for the hills, know that we’ll be disregarding precedents set by stuffy, overlong business plans of old. This will be a living document, designed to be revised, reviewed and updated each month. It exists solely to keep you and your business focused on what really matters.

Your business plan should be regularly revised in accordance with your business as it grows. If you’re feeling unclear about your business goals, it should be a document you can leaf through quickly to get back on track. This guide will tell you the main sections your business plan should include, and what you need to cover in the document.


Info Sheet

This is a cover sheet for your business plan, designed to provide a quick overview of the most essential details of your business. It will include the following:

  • Business name: The official name of your business. You should be careful to be consistent with spelling and punctuation each time you mention your business name. If you have taken any steps to protect your business name, such as trademarking it, you should mention the trademark details here.

  • URL: The web addresses associated with your business. This should include all your primary domain names (.com, .net, .org) and any sub-domains (i.e. blog.omnilux.com). You should also make a note of where these domain names are registered.

  • Type of business: Briefly describe the nature of your business. This should be one sentence or phrase. For example, ‘Online retail store’, ‘Online magazine’ or ‘iPhone application’.

  • Date founded/launched: When did you first come up with the idea for the business? This is a date you’ll want to remember. If your business has been launched, when was it launched?

  • Owner/s: Are you the sole owner, or does anyone else have a stake or partnership in the business? List all owners here.

  • One paragraph summary: A paragraph cutting to the essence of what your business does, and the value it provides to customers. This paragraph is not a sales pitch, it’s for you. It exists to remind you why your business was founded, and what you want it to be.

If possible, try to fit all of these facts on one single typed page. This page above all others will provide a quick, one minute refresher on the essence of your business.

Monthly Review

Have any of these details changed? Is there a better way to encapsulate the spirit of your business in the one paragraph summary?


Value Proposition

Use this section to clearly describe what your microbusiness does and make a compelling argument for why it will be successful. Include answers to any or all of the following questions:

  • What problem are you solving?

  • How are you solving it?

  • Who are your competitors?

  • What makes you a better solution or product than what your competitors are offering?

  • What are the non-ideal solutions people have previously been using?

  • Why does your product or service matter?

  • Why is your business valuable?

Monthly Review

Has your value proposition changed? Has your business changed or added new dimensions to what it does?


Market

In this section you’ll outline who your product or service is meant for. This might have nothing to do with demographics (gender, age, job title) and instead might be more focused around a problem to be solved (i.e. an entrepreneur who has a great idea for a mobile application but doesn't have coding skills).

A business will often have several different market segments. For example, the market segments for Lego blocks might look like the following:

  • parents buying gifts for their children

  • children and teens who purchase a Lego set with their pocket money

  • dedicated collectors

  • architects looking for a quick brainstorming tool

Though I’d guess that a majority of Lego sales come from the first group, the other groups likely make up some portion of Lego’s total market.

Your own business probably has a market breakdown something like this. One group responsible for a majority of the sales, and other groups who form the remainder. It’s worth listing all of them in your business plan. Write a one sentence description for each archetype. Next, think about why each of these market segments needs your product or service, and how they might use it.

Next, calculate your total available market. How big, realistically, is each group? To use an example, let’s consider an app designed to help psychologists self-manage their patient notes. The total available market might seem to be ‘all psychologists’, but really, this is too broad. To be as accurate as possible, you would need to filter down on key factors. You would look at the total psychologists practicing in your target market and then narrow down this group by focusing on points like these:

  • How many self-manage their patient notes?

  • How many use the platform your application is designed for (i.e. Windows users)?

  • If your application is web-based, how many have Internet access at work?

The total available market should be an educated guess at the number of people who could realistically become customers of your product or service. It should not include people who would be prevented from finding out about or using your product or service due to factors outside of your control.

Once you’ve calculated this figure, you can do some useful forecasting based on market share. For example, what do you stand to make if 5% of the total available market buy your product or visit your website? What about 10%? This calculation can also determine whether your business concept is worthwhile. If the total available market is exceedingly small, it may not be. If you could only ever convert 5% of your total available market (and that might be optimistic), would your business be worthwhile?

Monthly Review

Have you discovered new things about your market? A new archetype?


Business Model

In this section you’ll need to start thinking about how your business will provide you a worthwhile financial return on investment. You should answer the following questions:

  • How will this business become profitable?

  • What are you selling?

  • If you’re not selling anything yet, what are your options for the future?

You should make a record of all current and future possible revenue streams here. You should also talk about the main expenses your business will incur as it operates.

This section is exceptionally important if you are launching your business and not currently charging for anything. It’s not enough to hope to get a lot of users and sell your business. Any potential buyer will want to know the pathways that exist for making a return in the future.

Monthly Review

Have you added new revenue streams? Have you eliminated or replaced any?


Key Assumptions

Every business rests on a series of key assumptions, no matter how big or small. Even an assertion that seems obvious is an assumption until it is tested against real people. Testing all of your assumptions is one of the most important things you can do to safeguard your business’s success.

To determine your business’s key assumptions, answer the question: What must be true in order for my business to be successful?

Here are some common assumptions you may be making about your business:

  • People will pay X dollars for this product.

  • The current solutions to this problem are not adequate.

  • The problem my business exists to solve is real and acute.

  • The best way to reach potential customers is through X channel.

  • I am solving an important problem for my target market.

  • The pain of switching to my product/service is less than continuing to use my competitor’s flawed product/service.

  • My target market is what I think it is.

  • Other people must have the same problem I do.

  • I really understand my target market.

  • I deeply understand the problem my business exists to solve.

Until you can confidently say that you have tested and proven all of these assumptions, you have work to do.

Mark assumptions as either tested or untested. If tested, write down how you tested the assumption, and what the results were. It can be tempting to skew your retelling of the results to support the story you want to believe, that your business will be successful. But this does you a disservice. As much as possible, it’s best to retell your results without bias. If the evidence supporting an assumption is weak, say so. You either need a better a test, or a new assumption.

Here are some examples of assumptions associated with a specific business model:

  • People will pay $29 a month to receive my stock trading newsletter.

  • Current solutions, like Gmail, do not adequately solve the problem of receiving too much email.

  • People are looking for a better way to keep in-touch with loved ones overseas, and existing solutions like Skype, Facebook and email aren’t adequate.

  • People are willing to take cheap weekend flights anywhere, regardless of the location.

  • Other people also want to learn calligraphy, but can’t find any in-depth online resources for doing so.

  • My target market is coffee lovers who want to read extremely in-depth reviews of coffee and coffee machines.

  • Print advertising in outdoor magazines is the best way to reach my target market (for my business manufacturing and selling a new, superior type of sleeping bag).

Monthly Review

Did you test any of your assumptions? Were any proven wrong?


Marketing Strategy

Based on your earlier outline of your target market, this is where you should list all the ways you could possibly reach your various market segments. You should also add a note of whether you’re currently using or not using each channel. If you have already used a channel, you should write a little bit about your results.

You should also include some information about your branding here. What are the feelings you want your brand to inspire? How would you like your customers to describe your brand, if they were asked?

Monthly Review

Which marketing channels are working best for you? Which have been underperforming?


Revenue and Expenses

Forecasts are generally not useful, and rarely right. You’re better off forecasting expenses, and then can work on ensuring you’re turning enough profit to cover costs. An online business can fluctuate greatly and is subject to a lot of random events that affect your bottom line. What expenses do you know you’ll have? What can you guess that you might have (for example, increased server costs)? Can your business model cover these expenses enough to be worthwhile?

What is your revenue potential? If everyone in your total addressable market purchased your product or used your website, what would you stand to make.

What is your expense potential? If every possible expense was incurred, what would you stand to spend?

Monthly Review

How are your predictions tracking against reality? If they don’t match your predictions, why? Is your business not living up to its potential, or were your initial predictions overly optimistic?


The Monthly Review Commitment

Once you’ve finished the document your work isn’t done. Online businesses change and pivot so rapidly that it will quickly become out of date if not regularly reviewed and updated. Schedule a day each month to review and update each section of your business plan. At the end of the day you should print or save a fresh copy of your business plan with some updates and revisions to each section.

If you’ve done it right, your business plan should be a document you read and review more than once a month. It should sit on your desk as a constant companion to your business, to help keep you focused on what really matters.

If following this template doesn’t lead to a useful document, don’t give up. Customize this business plan until it becomes useful in pointing you at ‘true north’ for your microbusiness.

In the next post in this series we’ll cover one of the most important events in the life of your microbusiness: the launch!

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