The terms solopreneur and entrepreneur are often used interchangeably. But they are not the same. The difference between a solopreneur and an entrepreneur is that a solopreneur has no intention of adding staff, while an entrepreneur does. So, if you are calling yourself a solopreneur, but intend to staff your business, you call yourself an entrepreneur.
But, calling yourself an entrepreneur and becoming an entrepreneur takes effective planning coupled with hard work. Granted, by nature, entrepreneurs are typically hard working. But not all entrepreneurs are good planners, but rather laser-focused on landing their next client. Though this laser-focus is essential for success, so to, is planning.
Beat the Odds and Reach Your Goals with an Effective Business Plan
According to data from the U.S. Bureau of Labor Statistics, 20% of small businesses fail within their first year. By the end of year five, that number balloons to 50%. Investopedia sites the lack of a sound written business plan as one of the top six reasons for small business failure.
A written business plan should be the cornerstone of your business. It is your road map for your business’s present and future aspirations. It provides you, focus. And, it can be the difference between reaching your goals or not.
Here is the good news. If you have never written a business plan, it is never too late. If you have written a business plan, continually review it and if necessary, update it. Because like your business itself, a business plan is an organism, requiring constant nurturing. If you have lost your business plan, write a new one. A lost business plan is as useful to you as no business plan.
Though it can be as simple as one page, drafting an effective business plan requires time and thought. Do not just write it so you can say you have it. Do not rush through it. Give it careful thought. Anticipate more than one sitting to complete it.
So, what elements should you include when drafting your business plan?
1. Company Overview
This should include the business name, its location (and its geographical footprint), its industry type, its legal structure (i.e. corporation, LLP, LLC, LLLP, sole proprietorship, etc.), its projected clients (be specific, specific, specific), its mission, its history (obviously if it is a new business, it has no history), and your experience.
2. Define Services
Though you can include this in the company overview, I list is separately because this requires additional thought. In defining services, consider what problem you will be solving for clients and the services you will provide in achieving this goal.
What other companies fill your projected clients’ needs? Are they within your geographical footprint? How long have they been in business? Next, determine how best to get in front of your projected target market (your target market is the specific client you identified within your company’s overview). Have you set aside capital for marketing or will be investing your time? Whether money and/or time, how will you best leverage these resources?
4. Identify Your Core Competency
Once you have completed your market analysis, you should be able to identify your competitors, their services, and how they deliver their services. Now consider how will you set yourself apart from your competition. Do you have a special skill or resource that can set you apart? You may want to consider obtaining special certifications or accreditation or developing a unique way of delivering your services.
5. Financial Projections
How much will you charge for your service? This is critical step! Skip it and you and your business can be doomed before you even land your first client. Before answering this question, you should determine your expected business and personal expenses. How does your projected charge compare with the market? Is it too high? How does your projected charge compare with your expected business and personal expenses? Too low?
You can see the trickiness, but importance of this step.
6. Organizational Plan
Who are or will be the key players in your business? Carefully delineate their roles and responsibilities. How much will they be paid? Project when you believe you will be able to on-board them. Until then, can you outsource work? Identify your lawyer, accountant, banker, and other professionals upon whom you will rely.
After you prepare your business plan, use it! Do not put in a drawer and forget about it. If used properly, I guarantee you that you will amend it more than once.
By continually referring to it, it will provide you insight into where your business is and where it needs to go. It will shed light on which ideas are working and which, need changing. It will allow you to quickly pivot, if necessary. But most importantly, it will provide the road map you need to transform yourself from solopreneur to entrepreneur.