If you find yourself asking that question, you're not alone. In fact, many of the people I've talked to this month equate a business plan with a sleek wire-bound document and venture-capital funding.
Business plans can apply to you, too. But they're different. To find out how different, I had a little chat with business-planning guru Tim Berry. He's the author of The Plan-As-You-Go Business Plan and Three Weeks to Startup. He is also founder of the business-planning software Business Plans Pro.
Here's what he had to say:
How is doing a business plan different for creative professionals (writers, photographers, etc.) than for people needing VC funding, etc?
The business plan for the creative professional is a tool to improve management -- and by that I mean make more money for your work, do it better, get compensated better -- in at least two important ways.
- It helps to hone and highlight strategy. That can be as simple as what kinds of things you want to write, for whom, and where you want to place it; it's always a matter of strengths and weaknesses, opportunities and threats.
- It keeps track of what you were thinking, some measurement of success like publications, articles, of whatever (what I call metrics) , and what was supposed to happen as a collection of concrete specific dates, deadlines, task assignments, and numbers.
You mentioned in our private email that you believe having a business plan is more important in the current economy. Why?
Because a business plan properly managed in a planning process that includes regular plan vs. actual reviews. It's one of--if not the absolute best--tool for managing your writing business, steering it through uncertainty towards your goals.
And uncertainty is right now higher than its been at any other time in my 60-year lifetime, so the plan, as a steering mechanism, is more important than ever. I should emphasize though, when I say plan, I really mean planning process, which is keeping the plan alive, reviewing plan vs. actual, tracking progress towards the goals and making corrections where needed, particularly when assumptions change.
I often hear that people with business plans earn more money. Is that true? Is there any research as to why? If not, what's your take on the issue?
The actual research on this is spotty because almost everybody confuses planning with "the plan." What fouls up the research is that so many people think "business plan" means the full formal document, so they'll tell researchers they didn't have one. I've seen some studies showing that companies with a business plan performed better than companies without, but I've also seen studies showing that many successful companies say they didn't have a business plan. There's that confusion again because, of those who respond like that, many of them did have a plan but not a full formal plan document.
Where I go on the question of whether or not people with business plans earn more money, really, is to answer with another question: Do you think people who have thought through their strengths and weaknesses and publications and target audience strategies, managed their priorities, set goals and tracked progress against goals, and planned on dates and deadlines and task responsibilities and tracked progress and completion earn more money? I think it's common knowledge, or one of those truths that people hold to be self evident. Underneath the confusion is the Dwight D. Eiisenhower quote: "The plan is useless. Planning is essential."
Many people have told me they don't have a plan because the idea of it is overwhelming. How do you advise people to get over overwhelm? What steps can people take to make the process manageable?
This is why I say the plan-as-you-go approach is the right thing for these confusing times. Think of a plan as a collection of separate thoughts, bullet points, maybe a table of dates and dealines, and some projections, including a few key strategy points like what you're writing for whom and what target media, some goals and objectives, a definition of success, and a lot of specific concrete steps to be taken -- dates, deadlines, task responsibilities -- and then add some basic numbers, like sales and expenses.
You don't have to stop time and suspend life and business while you do the whole thing from start to finish. On the contrary, start anywhere, get going. Pick a module to do first, whether it's target market conceptually or specific sales forecast or whatever, and do that, start using that, and go on with your business. Then do another, then another. A good business plan is never done. It's also useful from module one on day one.
It should be the computer equivalent of the old-fashioned loose-leaf binder on the desk. It's always there, you work on it some, pull it up and revise it, use it to manage the relationship between the immediate fires to put out and the long-term goals, keep it alive, use it to steer the business through the hard parts.
Any other questions you'd like answered? Let me know!