Image via vectorious.net
A business plan is a written document that provides anyone reading it with both a big-picture summary of the business in question, and a breakdown of all intricate details and decisions that make up the whole.
Writing a plan is a traditional recommendation for any business in its early days, although more modern pundits like Eric Reis in The Lean Start-Up suggest that the detailed plan is a waste of time.
While some businesses swear by their plan, others only have the version that was written in the gung-ho first weeks of work, which now sits out of date in a cupboard. Many creative people simply don’t bother having one at all.
The varying plusses and minuses of a business plan depend on why the plan was written in the first place. Plans are usually used as a tool to help convince another party to give you something. You might use a plan to garner a loan from a bank, attract a financial investor to an idea, or make a government financier happy. If this is all a business plan is for, many creative people think that they won’t need one – if you’re not going for a loan or an investment, why bother?
The value for creative entrepreneurs is in the process of planning. Sitting down and investing time and thought into the intricacies of what you’re trying to do can take your business beyond the dream in your head and march it into reality. You can use the plan to brainstorm ideas, establish some goals and research the things you don’t know enough about. You can face tough questions about your endeavour, and devise solutions to potential problems before they happen.
If required, you can then create two business plans. One is your “public” plan, which conforms to a more traditional model and contains all the salient information that can be shared with bank managers and government departments. The other is your “private” plan, which can contain your fuzzy dreams and weird drawings and becomes a personalised and private guidebook to your business.
Business plans can follow whatever template you see fit, but regardless they all cover the same four major areas. In simple terms:
1. Management and Administration
- What does your business sell?
- What is your business structure? Why?
- What is your role in the business? Do you have experience in business, and if not, how will you compensate for this?
- Who is in your team? Do you have help, like a bookkeeper, accountant, mentor? Will anyone work for you as an employee or freelancer?
- How can you maximise your strengths? How can you compensate for your weaknesses?
2. Financials
- What are your start-up costs? How will you get the money you need?
- How much will your business cost to run?
- What do your products or services cost to create?
- How do you intend to make money in the beginning? What can you realistically expect to earn from your business in the next few years?
3. Marketing and Business Development
- Who will buy from you? Why?
- Do you have any competitors? What are their strengths and weaknesses?
- Who are your potential clients or customers? What do they want?
- What kind of marketing strategies will you use?
- How much time and money are you planning to spend on your marketing?
4. The Future
- What will your business look like in the future? How will it grow?
- What are your short and long term goals? What are you doing to try and meet those goals?
The four sections work best when they tie together. For example, if your goal is to move from being a freelance director into running a larger production business, your management section will need to include details of your potential freelance crew; your financials will need to explain how much the expansion will cost; and your marketing section should outline the strategy that you’re going to implement in order to find the clients who will pay for your services – and therefore keep your business afloat and moving towards your goals.
Business plans come in all shapes and sizes, and there are plenty of good (and some bad) templates available to help guide you through the process. Some are even designed to specifically help creative people. For example: Business Plan for Creative People; The Right Brain Business Plan; The Business Model Generation Canvas and Government Business Plan resources.
Regardless of which template you use, keep your plan concise and simple. You don’t need to conform precisely to these structures, and if you think it will help explain your vision use as many design elements and images as you like.
Sometimes running a creative business means blurring the lines between your personal and artistic life. Don’t be afraid to work out those issues in your “private” plan, if you need to. If your business also needs to support the time juggle required when you have kids, or your arty short film that will never make any money, or the upkeep of an elderly cat – add it in and work it out.
Finally, a business plan is a living document. As your business grows and changes, so should the guidebook. Some people update their plans every now and then, some every six months. As long as the document is up to date and continues to guide you.
