Write a Personal Plan Before Your Business Plan

business plan

In the world of business, especially during the pre-launch phase of a new venture or company, much emphasis is placed on forming a solid business plan, marketing plan, raising capital, setting up your infrastructure, acquiring your products, maximizing margins and profits, and everything else that defines a successful business. And this is all for good reason. All of these components can be considered critical for success thus adequate planning and strategy is a must if you want a chance at succeeding and surviving.

But what is missing from that equation? What is it that ties all of that together; the common denominator across all of these facets of business?

It’s you. You’ll be the one bringing those plans to action, converting your business vision to a reality, putting everything on the line, and grinding out the days on a mission to build a successful business for yourself. You’re the most important part of your business and a direct influence on whether or not success is in it’s future. If you fail as a person and entrepreneur, your business will undoubtedly follow. So why do so many people fail to plan for themselves? Everyone is different whereas many businesses are the same; or at least, quite similar. If you’re the most dynamic variable in the equation, then how can you expect success if you ignore yourself?

It’s been said that a business idea (or plan) is worthless and execution is everything. Two separate people could be given the same business and one succeeds whereas the other fails. Is this because one of them is simply a better entrepreneur? It could be, but there are endless facets, traits, and skills that go in to building a successful business and many of them depend on the business itself. The same could happen in the opposite order with a different business. Perhaps the failure was a result of the person’s incompatibility with the specific business or the plan, and not the business itself; if one of them was successful that just leaves the person as the cause of the failure.

Know Yourself

One of my favorite books is Trade Your Way to Financial Freedom, by Van Tharp. While the book is primarily modeled around trading in financial markets, it’s actually about developing, analyzing and optimizing risk and probability based systems. In fact, the concepts and practices can easily be carried over in to other aspects of life, especially business and entrepreneurship. But that doesn’t explain what was so great about this book.

Most books on any topics, including business or investing, will present you with tons of systems or strategies and tell you that if you learn and copy those, you will succeed. Tharp took a much different approach. A plan or system, much like an idea, is worthless unless it can be properly executed by the person aiming to do so. And he knows that all people are different and all plans and strategies are fit specially for certain people. So, instead of teaching his readers exactly what to do step by step, a large focus of the book is about analyzing yourself and developing a system that matches with your attributes and traits.

For example, some trading strategies yield a win only 20% of the time, but the profits are substantial enough to cover loses and have leave you ahead. Others yield a win 70% of the time but the payoffs are minimal. Most people are only suited to handle one of those systems. Big win-falls are nice, but can you handle losing 8 out of 10 times? Or do you need to continue to be gratified with success often along the way, even if it’s small? If your character is a fit for the second strategy but take a shot at the first, you’ll often fail; and fast, despite both systems being successful in the long-run.

This is why a plan that doesn’t take you in to consideration has a much higher likelihood of failure.

Here are some example questions that you can ask yourself, but know that your specific business and personality should guide the list of questions:

  • Do I have the skills needed or the time and talent required to learn?
  • How long can I go without any inclination of success or sales before I become discouraged?
  • Do I have the personality and willingness to become the face of this business?
  • How do I handle failure?
  • Am I willing to risk time and money, and how much exactly? Is it enough?
  • How do I handle dealing with competition and adversity?
  • Am I willing to change my business and pivot if the market is telling me I need to?

Expectations

Misguided personal expectations can crush any business or entrepreneur. Sure, most business plans have projections and forecasts that sound wonderful, but we all have our own expectations; about everything. Most people fail to properly set their expectations of their new business and it can be devastating. As was said before, you’re the heart of the business and once you start to break, everything will follow. Falling short of your expectations, whatever they may be, can be enough to derail you.

What are you some common expectations you should account for?

  • How long it takes to make your first sale.
  • How much revenue will your business have after 1, 3, 6, and 12 months.
  • What will the press response be once you launch.
  • Will people ultimately like or dislike your product or service.
  • How much work will this business require.

The list goes on and yours should be much longer while you plan. Look objectively at your expectations and determine if they are realistic. And if they’re not, can you adjust them and still be satisfied and willing to proceed? Will your level of enthusiasm and motivation decline too far if your expectations have be brought down? Do you have a plan if they aren’t met?

Why is this important? There are two general reasons:

  1. Your expectations for this business are far too high and you should consider scraping your plan all together. There’s no point to pursue a business when your expectations from it far exceed reality. You shouldn’t open a newsstand on the corner and expect a seven-figure income. No one is saying that it’s not possible, it’s just a recipe for failure as the odds of you achieving your expectations and sticking with your business would be next to nothing. If it’s millions you expect, you need a business that can produce it.
  2. Falling below you expectations can discourage any entrepreneur enough to throw in the towel; even with a good business or one with massive potential. Having high expectations obviously makes this much more likely. There is nothing wrong with having high expectations. It’s yourself that you need to account for here. If you expect a million dollars in sales in the first year then your business plan better provide a clear path to that because under-performing can easily lead to personal failure. If you’re not able to honestly change your expectations then you need to make sure your business goes inline with them otherwise you need a different plan or a different business all together.

Financial Strain

Money rules everything. It can be a massive strain and roadblock in both life and business. Odds are entrepreneurism is your potential gateway to removing that strain by having your efforts pay off in a big way. This financial strain, on a personal level, is something that absolutely must be planned and accounted for as it could easily cripple you and any business you’re working on. This is not about how well-funded your business is, or how to manage cash flow, or maximize margins. It’s about the wallet in your pocket and how you plan to handle it while your start and grow your business.

If you’re starting a business on the side or are completely financially secure, then this section probably won’t apply to you.

It’s important to know exactly where you stand financially before starting and while planning for your business.

  • How long can you go without income?
  • How much can you spend and how much are you willing to spend on your business?
  • Who depends on you, financially?
  • How much will your normal life be effected if you made little to no income for a period of time? Can you handle it?

The point isn’t that starting a business is a financial risk. We all know that already. It’s that your business plan will have to match and accommodate for your personal financial situation. If you’re unable to support yourself for a period long enough to grow your business, there’s a zero chance of success. Perhaps you’re planning a business that requires a lot of spending. Assume you have the money available: are you absolutely sure you’ll be ready and willing to spend it when you need to? Are you confident enough? If you hesitate or scale back, you could be killing your business.

Strategy and focus play an obvious big role in business and both can be turned upside down when financial strain becomes present. If after three months, your sales are not bringing in enough money to remove this strain, your plans can easily become dictated by dollar signs. Instead of focusing on important areas such as improving customer support and providing better products and services, you’re now focused on nothing but mass-marketing and trying to drive up revenue.

Evaluate exactly where you stand financially and make sure it’s aligned with your business and plan. If you cannot go more than 6 months without income, don’t start a business that will take 2 years to build. If your business requires a six-figure ad budget and you can only afford fast food for yourself, you need to change something. Putting yourself in situations like this results in certain failure. These examples are obviously exaggerated, but you can see how not considering your personal financial situation can ruin your chances before you even start.

Conclusion

Hopefully, this article helped you look at yourself, your business, and your plans in a different way. The aim here is not to tell you what to do or how to do it, it’s to show you that everything in your life and business has one common component: you. And unless your plans are crafted specifically for you, the odds of success dwindle. It’s relatively safe to say that everything comes with odds and chance; whether it’s starting a business, getting struck by lightning, investing in the markets, getting divorced, or playing blackjack. With the right knowledge, planning, and strategy, those of you can begin to move the odds in your favor. Most businesses do fail, so unless you increase your odds, you should expect to do just that. RememberChance favors the prepared mind (Louis Pasteur).

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