AP 0416: How Important Is Having a Business Plan?

AskPat 416 Episode Transcript

Pat Flynn:  What's up, everybody? Pat Flynn here, and welcome to episode 416 of AskPat. Thank you so much for joining me today. We have a great question today from Elizabeth. But before we get to that I do want to thank today's sponsor. These sponsors are. . . I love these sponsors because they not only bring great value to you and the show in terms of what it is that they do but they also help pay for things like Mindy, who is on my team and who is amazing and who just helps to put this episode together and make sure it gets posted on time. I thank you guys for the support and thank the team for the support and we're all working together here. It's a win for everybody.

So I want to give a big shout out also to FreshBooks.com, which is today's sponsor, making it super easy for everybody out there to manage their business finances. With a couple clicks of a button you can just check out after everything is hooked up. The health of your business, your balance in lost statements or profit and loss in your balance statements, and everything that your CPA might need to get everything going. Come tax season, which is going to creep up on us, I know. They also have an award winning mobile app to check the health of your business on the go and they're serving over three million small businesses and they could help you, too, just like they've helped me. So check them out at FreshBooks.com/AskPat and enter “AskPat” in the “how did you hear about us?” section. Again, that's FreshBooks.com/AskPat, enter “AskPat.

All right, here is today's question from Elizabeth.

Elizabeth: Hi Pat. This is Elizabeth. I'm just starting a new part-time business called The Senior Gap. Our website is TheSeniorGap.com. I'm a licensed counselor and I'm going to be providing counseling services and trainings about resources for seniors, particularly those with Alzheimer's or a form of dementia.

It can kind of get a little overwhelming. I've really enjoyed listening to your podcast and your resources have been unbelievable, the amount of information, but I'm trying to just wrap my brain around the big picture.

So I skipped over the idea of a business plan. That was very overwhelming to me, that thought, but I've moved forward with the website and getting ready to start some support groups and even some social media stuff.

My question is: How important is the business plan, in your opinion? Do you have any resources available that would help kind of outline what I should be looking at in even making a business plan. I can also have unrealistic expectations of myself and what I think the results should be. So if you could give kind of some time lines of, you know, 30, 60, 90, one year, five years, ten years and kind of some expectations of what are realistic.

What are some things that should be priorities? Should you prioritize an email list over podcast? Over a blog? Social media? Just where kind of do all those priorities fall in into the mix?

Like I said, you've been a great form of resource and I've just found the world of the amazing podcasters that are out there so it's been very beneficial and encouraging to hear people going through the same journey at the same time. So I really appreciate it and I hope to hear from you. Thank you.

Pat Flynn: Hey Elizabeth, what's up? Thank you so much for the question today and for all the support and kind words. I appreciate you sharing that in your question here. This is a great question and a very common one because traditionally business plans are what to do when you first start out and I remember I went to like a local community SBA, small business administration, free workshop and we talked most of the time. This is even before I started my online business, we had talked about business plans.

Business plans aren't what they used to be. You know, if you're going to go and approach an investor, for example, you might need a business plan. They're going to want to see the numbers. If you need funding for whatever it is that you're trying to do. But for online business, one of the beauties of online business, is you don't need a lot of funding, or any funding, to start it. So you don't really need to business plan in the traditional sense with like a thirty-five page report and all that sort of stuff like you might imagine.

Now the more research you do with your market the more information you get in terms of what it is that's possible. That's all good stuff, of course, but it's not 100 percent important to have this formal report about the market and what it is that you're going to do. I think that you should have an understanding of essentially this is your business plan. Understand the problems of your target market; their pains, their problems, their needs, their wants, their desires. And you come in and figure out what solution can you provide to them?

Your “business plan” might include conversations that you have with people in your target audience to understand what it is you can do to serve them. Your business plan might include research on everybody else out there who’s serving that audience already and what is missing. But again, these thirty-five page, fifty page, however many page reports with projections and numbers, that stuff isn't required anymore. But information about the market is. Understanding the pains, the problems, and all those things about your audience is obviously very important as well. And understanding what is best going to help them moving forward is going to help you.

That's going to base all your decisions off of that. It's going to help you decide whether it's a blog or a podcast it start out with or anything any other platform. It's going to help you determine what social media platforms to get on because you're going to go to where your people are at.

It's more about the research and not about the projections moving forward because a business plan is just a guess, really. I don't remember who said that but a business plan is just a guess, an educated guess of what's going to happen and nine times out of ten, or ninety-nine times out of one hundred. Nothing ever gets executed the same as it is in a business plan.

You had also mentioned 30 days out, 60 days out, 90 days, one year, ten year, five year. It's good to plan ahead and have certain deadlines for when certain things should happen. I think that's absolutely necessary or else nothing is going to get done. You're going to try and make everything perfect and then when you do that nothing is going to get shipped.

You want to have an understanding of what you want to roll out and when. Again, this is based off of the solutions you can provide to the audience that you know exactly who they are, what they're about and what they need. But in terms of going to the one year, the five year, the ten year, I mean things are happening and changing so fast that I don't think it would be worth your time to do that. I think the kind of balance there is understanding that every year or even every six months you kind of reevaluate where you're at, what it is that you're doing to serve your audience and then if there's anything that can be done better from there. Because if you plan five, ten years ahead, you don't know what it's going to be like five, ten years ahead of time, you know? What social media platforms are going to be around and how are those things going to be utilized?

I think really it's just a matter of checking in every once and a while in terms of your future planning. Plan to reevaluate. Plan to plan, if that makes sense. And so you're next thing is going to be the most important thing. I would recommend reading the book called The One Thing because, yes, this is all super overwhelming but when you can focus and narrow your attention to just that next thing that you have to do by a certain deadline, again maybe this is 30 days out, you have the website up and on the website it has this information that goes into a page where you can sign up to get consulting from you or have a call with you one on one.

Whatever it is, focus on that. All your learning, all your execution, all the people you connect with, all the people you talk to and ask questions, all the questions itself, they're all about that next stage. And then from there you can reevaluate.

The other important thing I want to mention are your goals. Your goals, Elizabeth. This is a very important step that a lot of entrepreneurs, especially those just starting out, skip over. And they look back to the past and they say, “Wow, if I just thought about this a little bit more in terms of how this business idea fits into my lifestyle then I would have had some different thoughts. I would have maybe taken a different direction and I would have perhaps been happier.”

That's a very sad thing for me to hear about an entrepreneur who is succeeding in terms of generating an income but they're looking back and saying, “Wow, I wish I had done it differently because I'm not spending enough time with my family” or “I'm not doing what it is that I'm passionate about, I'm doing something else. Yes, it's making money but it's not what I'm passionate about.”

So obviously there's passion there, Elizabeth, and I would make sure that you align your goals and your plan moving forward with how you want to live your lifestyle, what it is that you want to do. I would even go as far as, okay well, how much money do you need to make in order to be happy? Or how many people would you have to serve? How many clients would you need to have in order to be satisfied?

And then you can grow from there but in terms of your next steps and your next goal and your next one thing, what is that number? And then you could work backwards from there. If you need five clients, five new clients every month, you know, so you could take care of them a week at a time, for example, well then you have a very clear indication in terms of what you need to do. Okay, every week I need to get one new client. Well, I can make ten calls and if one of those calls converts every single week then that's great and then I can make ten calls every week. So I do two every day between Monday and Friday.

You know, you can do things like that to help you figure out what to do. So it's all based on what it is that your goals are. You work backwards, you break those big goals down, and then you find that next thing. But then you can also break it down in terms of how you want the business to be structured to support the lifestyle that you want. Again, that's the most important thing that I'm trying to get at here.

In terms of resources to help online, I would look toward a lot of other business owners out there who have a business model similar to what it is that you want to have. I think I can mention websites, I can mention podcast episodes that I've had before but I think one of the most important things anybody could do is if you find somebody that has a business that is very similar to the one that you want to have in terms of how they run their business, perhaps their lifestyle, their products, their courses, maybe the way they do business itself and the way they come across on social media. Follow those people and get inspired by them. Obviously you don't want to copy but you can get inspired by them and that's going to teach you so much more than me just sharing, “Oh, you should follow this person” Because that person may not be a person that you resonate with.

So I would look out there, and obviously you're in the space already, Elizabeth. You found me. And so through me you might be able to find other people, perhaps guests on my podcast or other people that you find on iTunes or in the blogging space here. Find one or two people that you really resonate with for whatever reason and you can get a lot of inspiration from them in terms of resources and how to do business and I would even encourage you, just like you did with me, to reach out to them and ask questions so you can fill in those gaps that are there.

But Elizabeth, I hope this gives you at least some direction. It was kind of a little scattered in terms of my answer but the big answer is really you don't necessarily need a traditional business plan but you should have a plan moving forward and kind of breaks those goals down into deadlines that you could reach by doing certain things by a certain amount of time and then also breaking down those big goals and then perhaps your monetary goals or how many people you want to help or a combination of that to support the lifestyle that you want to live as well.

So Elizabeth, I wish you the best of luck. Thank you so much. We're going to send you an AskPat t-shirt for having your question featured here on the show. And for those of you listening, if you have a question you'd like potentially featured here on the show, all you have to do is head on over to AskPat and you can ask right there on that page.

I also want to thank FreshBooks.com for sponsoring this episode and also making it super easy, especially if you're doing any consulting or you have students or clients. They make it super easy to do invoicing. So you bill your time and you send an invoice to your client or student and you can get paid really easily, it's very professionally done and you can spend more time doing what you need to do to serve your audience instead of fumbling around with the finances that happen as a result of your business.

So go ahead and check it out. You can check it out for 30 days for free by going to Freshbooks.com/AskPat and enter “AskPat” in the “how did you hear about us?” section.

Thank you so much for listening and I appreciate it and here's a quote to finish off this episode by Tim Barry. He said, “Good business planning is nine parts execution for every one part strategy.” So again, going back to everything we talked about, Elizabeth, it's going to be about taking action more than anything. A little bit of planning is good so you know what direction to take but take action because that's going to teach you more than anything. The business plan really is just a guess. The education comes with doing.

Cheers. Take care and I'll see you at the next episode of AskPat. Bye.