Online Business: Proper Planning Prevents Poor Performance

Phil

As a budding InfoPreneur you are no doubt extremely keen to get the ball rolling with your new online business. I’m fairly sure you will have already had that ‘light-bulb moment’ where suddenly this amazing idea just jumped up and smacked you in the face from out of the blue. It seems like such a good idea that it just can’t and won’t fail, and I bet you are just chomping at the bit to tell the world about it and start raking in the cold hard cash.

Unfortunately, as good as you think your idea is, if you want to spare yourself time, hard work, and probably even your own hard earned cash, then listen to me… SLOW DOWN!

This is a process that practically everyone goes through. It’s a mix of sheer excitement with total adrenalin. Unfortunately, if you don’t want this to be the beginning of the end then you need to take a few deep breaths, step back, and take a long, hard and detailed look at what you are about to embark on.

It’s true you know, proper planning really does prevent poor performance. And there are a couple of really good reasons to back this up.

• Taking a detailed look at what you want to achieve and how you are going to achieve it really focuses you on your key goals and actions. It’s a little bit like drawing a map of how you are going to get from A to B in the quickest, cheapest and safest way possible.
• Understanding your new business in microscopic detail means that when bad things happen (and they will), you are better equipped and able to react to the issues, ensuring your business remains stable and competitive.

There are of course plenty of other reasons, but these two are the ones that really stand out in my mind.

Creating a business plan can be a fairly lengthy task, but really the time and effort that goes into creating such a plan depends on the type of business you are going to build, and of course the amount of risk that you are exposing yourself to in setting up.

For a typical online business you are unlikely to be investing very much cash in order to get things moving, with costs mainly being hosting and website setup. The rest of your investment is most likely to be in time, rather than money.

Because of this you can probably get away with producing a quick and simple business plan. It’s not the kind of plan that will secure you thousands of pounds of investment, but it will get you focused.

There are several ways that you can produce the plan, with free templates available by simply searching Google for “free business plan template”, or you can call into pretty much any local bank branch and ask for a small business start-up pack, within which will more than likely be a hard-copy version for you to simply fill in the blanks.

Or, you can simply list the basics that are outlined below:

1. What is your business? What exactly is your business about and how will it make money? Take the Who, What, Why, When and Where approach to keep it simple and straight to the point.
2. What is your competition? Think about all the other businesses out there. How many of them are in direct competition with you, and how does your business differ? What can you offer that your competitors can’t, and if there isn’t anything, then what can you do to give yourself a ‘unique selling point’?
3. Who are your target audience? Sounds simple, but you need to think about who exactly you are selling to. Don’t just say the first thing that comes into your head… drill down deep! Male/Female, Age Range, Employed/Unemployed, Particular Interest, Geographical Location, etc…
4. How much will it cost? Make a detailed estimate of all the costs setting up will incur and check that you are able to afford the setup. Then, map out projected costs on a daily, weekly and monthly basis, and work out what you will need to bring in revenue wise to break even.
5. How much will you make? What will you sell, how much do you think you could sell, at what price, and will this rate of sales allow you to break even verses your costs. If you need to turnover £10,000, or $10,000 a year to break even, then break it down into months (£833.33/$833.33), weeks (£192.31/$192.31), days (£27.40/$27.40) and even hours (£1.14/$1.14) in order to fully understand the volume of sales that will be required to achieve your targets. Its all very well saying you need to turnover X amount, but if what you are selling and the rate you are selling it at doesn’t allow you to achieve your turnover target then things are looking bad.
6. Summary and Targets: Summarize your entire business in just a few short paragraphs. Try to explain every detail of your business in just a few short sentences, as if you are telling someone that doesn’t know anything about your business. Doing so will help to straighten things out in your mind, and will clear your head of any unnecessary clutter. Then, set yourself targets and benchmarks, of which you can return to on a regular basis and monitor your performance.

I know I’ve said it already, but DO NOT RUSH this process. Seriously, spending a week, or even just a few days, creating this plan will give you the best possible chance of success. I’m not saying that having a business plan will guarantee success, but what I am saying is that it guarantees you a good shot at it.

I’d be interested to hear from you in the comments below if you’ve previously had a business and both had a business plan and not. How did this affect you in terms of performance? And what would you do differently etc. Sharing this kind of information helps to give a more rounded insight into the subject, as what works well for one does not necessarily work well for another. So, lets get sharing…

photo credit: vincentq

Phil has had many other businesses including Coaching, Marketing and PR, Graphic and Website Design, and Online Learning. His current venture is Phil Johnson Business Services, providing low-cost essential services to the newly self-employed and small and medium enterprises. Aside from this Phil runs Major-Business.net, a free source of quality help, advice, tips and tricks on many business and personal development subjects, catch Phil on Twitter