Congrats! You’ve made the decision to strike out on your own as a solopreneur to start the business you have been dreaming of for months, or even years.
You know exactly what product or service you are going to provide and have been honing your skills. You may want to be a consultant, a coach, a designer, or a writer. You know there is demand.
You know this can work.
But do you really?
Though you may be tempted to immediately throw yourself into your new small business, don’t forget a crucial element: creating a business plan. Yes, the words “business plan” might trigger some dread about epic documents that take a ton of time to produce—but that’s not necessarily what a business plan needs to be.
The Lean Plan for solopreneurs
Even if you’re not thinking about writing a traditional business plan for a bank loan or investor pitch, creating a simple business plan that can act as your strategic roadmap can help you make better business decisions.
To be realistic and smart about your investment of time and resources, you need a well-researched document that will prove to you that your idea is viable and that your time, money, and effort will be well spent.
This shorter, more nimble type of business plan is called a Lean Plan, and you can create one in just a few hours, rather than a few weeks or months. It’s the perfect approach for a solopreneur who’s looking to expand their occasional freelancing gig into being full-time self-employed.
Keep it simple
Your Lean Business Plan is going to get you organized and help you be clean and concise about what your business is and how you’ll run it. This plan is the blueprint for your business and will help you think through your target market (who you’ll sell to) and how you’ll reach them. Keeping it simple helps you in the long run because if it’s easy to review and revise, you’ll be more likely to revisit it, and use it as a tool to grow your business.
Do your research
Before you can make projections for your future solopreneur business, it’s important to get a realistic picture of what you can achieve. Here’s where old-fashioned networking comes in. Don’t just guess how much you can potentially make; talk to real-live people in the field.
For example, you may assume that your earnings could take you into the six-figure range. That’s what they earn at Deloitte, right? Wrong. According to consulting.com, “The average annual salary for a Business Consultant is $72,900.” Still not chump change, but not what you may have expected, either.
Regardless of what you read and guess, it’s important to talk to experienced individuals who can set you straight with honest expectations. Even if your field is yet-to-exist (talking parakeets on-demand, anyone?), you can still reach out to those with similar business and revenue models.
From there, do an actual sales forecast to model the revenue you think you’ll be able to bring in. Put together a list of your personal expenses for the standard of living you require. Compare the two—this will help you understand how much revenue you’ll need to bring in each month to make your venture your primary work. Don’t forget to factor in self-employed (sole proprietor) taxes!
Profile the competition
Once you have identified and spoken with at least a couple of individuals succeeding in your field, it’s time to dig deeper and profile your competition.
As noted above, because solopreneur small businesses often tend to be extremely niche, you may fail to identify direct competition. That’s O.K. This exercise will help you anyway. Everyone has some kind of competition.
Answer the following questions about your competitors, and try to be as objective as possible:
- What is this person/business’s competitive edge? Is it the offering itself, or perhaps price, convenience, or another factor?
- What are their weaknesses or what do they lack? This question will help you determine where to invest the most energy.
- What about their approach inspires their customers?
- How do they effectively market their products or services?
- How can you capitalize on what they are already doing to win customers? For example, if they advertise in a certain publication with much success, can you advertise there, too?
Essentially, you’re doing a SWOT analysis on your competition—looking at their strengths, weaknesses, opportunities, and threats. You can learn more about SWOT here, and download a free SWOT analysis matrix template here. These profiles will give you a wealth of information that will help you fine-tune your approach.
Profile your ideal customers
Profiling your customer can be a simple or incredibly exhaustive endeavor. Be realistic about how much detail will be helpful to you, and don’t be afraid to go and speak to real people about their likes, preferences, and spending habits—this is about defining your target market through some simple market research.
For solopreneurs, it’s best to start by creating a few realistic buyer (user) personas. A buyer persona is a very specific, fictional representations of your ideal client. Creating a buyer persona can help you better understand your potential clients and see them as real humans. Then you’re better positioned to tailor your products and services, as well as your marketing messages.
Some helpful questions include:
- What is the background of your ideal client or customer? Are they wealthy? Educated?
- What are their demographics? Are they young or old? Give a specific age.
- What motivates them to purchase your product or services?
- What needs are they looking to fulfill or problems are they looking to solve?
For your solopreneur business, you may start out with as few as one or two personas, and you can always develop additional personas later on.
Clarify your mission and purpose
In today’s idealistic work environment, the word mission or purpose can seem like a catch-all for anything positive about work.
As a solopreneur, more than selling your product or service, you are selling yourself. And without passion and purpose, your customers will not be lining up to buy. Ready to define your purpose? Start by writing your company’s mission statement.
By articulating why you care about your business and the change you will create in the world, you are allowing others to connect emotionally with you and your work. Emotional factors are perhaps the most important elements in the decision-making process.
Include only what’s needed in your Lean Business Plan
Include details that will serve as a guide for your first few months of operation. This will save you a lot of guesswork when difference scenarios pop up (though they always will, and that’s part of the fun of it!).
You can use this list to create your Lean Business Plan outline:
- Identity: What do you do and who do you do it for (or your mission statement)
- Problem worth solving
- Target market (or customer analysis)
- Sales channels and strategies
- Marketing strategies
- Revenue and expense projections, break-even analysis
- Goals and milestones
- Team and key roles
- Partners and resources
- How the business will be funded
Analyze and adapt
Your business plan should be logical and easy to follow. Be realistic. If after some thought and research you have determined that part (or even all) of your idea is not viable (because of competition, lack of funds, or a weak or nonexistent market), be willing to put it aside or make changes to your business model. Hopefully, that won’t be the case, but be prepared.
As you start your business, you may discover unanticipated challenges. Maybe the competition is steeper than expected, or the market is smaller and less willing to pay than you thought.
You may discover that your core idea is strong, but your entire approach to marketing and sales won’t work.
Successful solopreneurs identify challenges and act quickly to remedy them. The more you can do this upfront, the more energy you will have to devote to actually doing the work that you love.
And don’t view your business plan as a static document. As you refine your strategy, update your plan accordingly. Creating different iterations of your business plan will help you understand past and projected growth, and will keep you on track with a concrete plan and purpose.