If you’ve been following along with the podcast, you know that in the past 2 episodes we walked through why you need a business plan, as well as the important sections and aspects to include in creating you plan. That research and work is great, but the true value of your business plan is the ability to use it in your business.
So in the final episode of our 3 part mini-series, we are going to take you through the process of using your business plan to help you create a successful business.
Episode Key Points
- Our biggest business wins from 2015
- How to use the roadmap section of your plan as a path to execute and track the progress towards your goals
- How to use the financial analysis portion of your business plan to track your actual business progress
- How to keep an eye on your competitors and use them as a way to help improve your business
- How to engage with your audience to stay connected to what they need and their feedback on your offerings
- Strategies for identifying what is working vs. what isn’t working in your business
- How to use your Ideal Customer Avatar (ICA) to guide your business decisions
- How to use your business plan to help you create standard operating procedures (SOPs)
- The various time-frames through the year to review your plan and make adjustments
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Ariana: This is The Serial Startups Podcast, Show 21. In the previous episode we broke down the seven essential elements that you need in your business plan. Today we’re going to show you how to use your business plan to help you grow your business.
Male: This episode of The Serial Startups Podcast is brought to you by the Business Planning Mini Course.
Ariana: Are you dreaming about starting your own business but don’t know how to take the first steps? Or maybe you already have a business but are still struggling to get that comfortable income. A solid business planning process will make your ideas come to life and get you on the road to true profitability, and we can help you achieve it. Head on over to serialstartups.co/businessplan now to find out more information and get started.
Welcome to The Serial Startups Podcast where we bring you the real deal when it comes to masterminding a business, juggling personal relationship and a busy household. We are your host from Serial Entrepreneurs, Tom and Ariana Sylvester, and this is the podcast for people who want to get more out of life. We want to show you how to build multiple streams of income and get on the fast track to being your own boss. Join us as we talk about our ideas, successes, and failures both in business and in life.
Tom: All right, so welcome back to The Serial Startups Podcast.
Ariana: We are on Episode 3 of our Business Planning Miniseries. That’s the last episode of our Miniseries. If you missed the first two episodes, you can head on over and check them out at serialstartups.co/show19 and serialstartups.co/show20.
Tom: All right, so it just dawned on me that we spent three episodes towards the end of last year talking about really our lessons learned and some of the mistakes we made, but we never really called out some of the wins that we had in our businesses. So, Ariana, what would you say is the biggest win that we had last year in business?
Ariana: For me, I think our biggest win was absolutely smashing our sales goal for Warsaw Wine and Spirits. We had our projections at one number, and then you had an actual goal that was higher than that, and we actually went higher than the higher goal, so woo-hoo!
Tom: Yeah, so we’re just about three years into the business, and each year we had projections and then we went over them, but this year we just did well beyond that. I think one of the big things too is we actually had … Normally in a retail liquor store end of the year is big, and then holidays are big, but this year, Fourth of July, typically our second biggest holiday, and we did really well this year. Then Thanksgiving this year actually jumped a ton.
Ariana: Yeah, went over Fourth of July. Woo-hoo!
Tom: Yeah, so multiple good things there.
Ariana: And yours?
Tom: Mine was actually finally selling one of the properties for our real estate business that we had tried to flip a couple years ago, and then just couldn’t sell. Most of our real estate is rental real estate, residential or commercial, and we tried to flip one of the properties. Everything looked good, but one of the lessons we learned is an area that’s really good for rental real estate typically isn’t as good for flipping, so we renovated this property. It was beautiful, good area but just didn’t have enough sales for us to flip it at the price we wanted so we ended up keeping it for a while. We took a loss on it a little bit each month, but we were finally able to sell it, and then overall we’re coming out ahead, which is great.
Ariana: Yay. That’s what we like to hear. Here’s what we’re going to go through today. If you listened to last week’s episode we’re going to kind of go through those same seven sections in reverse and show you how to use them to help your business. Then we’re going to go through the time frames we recommend for reviewing and refining your plan.
Tom: With that, let’s jump into the show: How to use your business plan in your business. In the first episode in this series we started out talking about business planning myths, and one of the first ones was that you just create a business plan and then you don’t use it afterwards. That could not be farther from the truth. The most successful businesses create their plan but then use it ongoing, throughout their business and update it as time goes on.
This episode is really focused on what do you do after you create that plan instead of just having it sit on the shelf? Because if you create the plan and then don’t use it you miss out on so much of the value of the business planning process. Then, like we previously mentioned, we look at it like GPS. Your business plan really helps you go from where you are at now to where you want to go, and it’s a step in a way to help you get there.
Ariana: That brings us to the first section, which is your road map, where you’re really identifying those goals and time frames, and I think we’re going to get into the time frames a little later on in the show, but you need to know now what you need to do for the next year.
Tom: Yep, so essentially, like we said with a GPS, where are you at now? Then your road map really identifies for the next couple years what are the goals that you want to achieve, but what we really want to focus on here as you start using it is the next year. Understand where you want to go beyond the next year, but the big focus is the next year, and then ultimately really the next quarter.
You want to have a context of what are your goals for the next year, but really, what are the goals for the next quarter? Then start to break those down into what you could do each week in order to achieve those goals.
Ariana: Then we’re going to jump over to financial tracking, which is huge, as we’ve previously stated.
Tom: You made some projections in your business for where your financials would be, and then what we want to do now is actually take those projections and align them to the milestones or those quarterly plans that you came up with. What that will allow you to do is really chart not only how are you progressing at your goals but then also look at your financial targets and see how you’re progressing against those.
Ultimately what we recommend is each of the milestones that you laid out, figure out what your financials should look like at that point, and then just use a chart or something simple to track how you’re doing against it. For example, if after the first month you should have $1,000 in revenue, do a basic chart that says, “We should have $1,000, but at the end of the first month we only have $500,” and that way you can clearly see are you hitting your projections or not, and then figure out what adjustments you may need to make in order to hit those projections over the course of the year. Next section up is really looking at your competition.
Ariana: We want you to keep tabs on any competitors that you have in your market and what they’re doing. Go ahead and follow them on social media. You can also set up Google Alerts, which will tell you any time they get searched on the Internet or any kind of articles come up about them. If you need to, if they’re an offline store, go and visit them. Walk in and see what they’re doing. See what their customers are doing. If they’re online obviously you can go and research them. Check out their social media. See what their customers are saying and any comments about them.
This allows you to look for any further gaps that you may have missed that you can kind of squeeze into and take over, and gives your business opportunities to shift and fit into those spaces.
Tom: Yep, and one of the key things here is you may have a lot of competitors, but what we recommend is really picking like your top 3 to 5 because you don’t want to spend a lot of time trying to follow your competitors, but if you pick the top 3 to 5 that should give you an idea for looking at those opportunities and gaps.
Ariana: Yeah, and if you’re offline usually it’s the closest 3 to 5.
Tom: Yep, so next up, kind of related, is your audience.
Ariana: Now that you know your customers after we’ve gone through your researching that audience, go out and talk to them. If you can, have informal conversations with them of coffee and dinner if you’re a service-type business and can invite them out. Or if it’s you don’t have people that you can meet up with, give them a chance to give you a call on the phone and talk over things that are going well and things that aren’t going well.
Meet up with them in person. Find out where your customers hang out and go see them. Or if you have a product-based business you can do focus groups and see what people are saying about what products you have or what services you have. It’s best to go out and hang out where your customers are, whether it’s online and offline, so that you can really stay on top of what they’re looking for and stay in front of that.
Tom: Yeah, and I think a key thing here is a lot of times we think we know what the customers want but this is where you can actually go out and verify that. What a lot of entrepreneurs find, and we found the same thing, is that there’s some times where you nail it and you do know what they want, and there’s other times where you get their feedback and you’re like, “I would have never of that.”
Ariana: Mm-hmm (affirmative). Another way to get feedback is to have surveys, whether they’re online surveys or even paper surveys that you give to people as they’re walking in your store, talking to your actual customers when you are there and seeing what they’re buying and not buying if you’ve got reports that you can run in your system that, “Okay, well, these products are obviously doing well. People are buying them. These others aren’t. How can we shift and adjust that to get them better?”
Tom: Yeah, and I think that’s a key point. People always say people vote with their wallets, so it’s one thing to do a survey and have people say, “Yeah, I’d buy that product at that price point,” but it’s a completely different thing if you look at your sales and you see people buying that. Or if you don’t see people buying it kind of go back to your plan and say, well, what was your time frame for achieving whatever your goal was, and then if you’re really not hitting that maybe you drop that product or maybe you make a shift.
If you have physical inventory, maybe you don’t carry that product. Maybe you do a discount to get rid of it, and then you put that money into something that is selling or is solving their problem. I think the key thing here is really just, it’s one thing for what people say, but ultimately looking at your reports are going to tell you what’s working and what’s not.
Ariana: Yeah, and also, as part of that road map, feel free to adjust your ideal customer avatar as you learn more about those customers because you really need to be able to shift that as well as what you’re doing in your business.
Tom: That’s a great point. I think the other thing with the avatar is a lot of times you may come to decision points in your business where you have to decide, are you going to go this way or that way, and going back and looking at that avatar, you can kind of think, “If I was in my avatar’s shoes what would they want?” That helps make that business decision in terms of what your customers want, not in terms of what you want.
Ariana: Next section is those operations.
Tom: When we described operations we talked about laying your business out in a six-step or less process. Here you’re actually going to go and implement that six-step process. Then what you can do is you also identified not only that six-step process but what backend functions you are going to need in order to actually support that process and make your business run.
In this case, now you can actually use that as a template for creating what’s called your “standard operating procedures.” Essentially what these are is the processes and all the things that are required to run your business.
Ariana: Yeah, what we talked about last episode is we have a binder for our processes at the liquor store. That’s what all the employees are trained off of and that’s what they have access to every day when they’re at work for every process that they could possibly come up with or any situation so that if there’s something that never happens or very rarely happens at the store but it could, there’s a process in there for that so that they can kind of jump in the binder and say, “Okay, that’s right. How do I sell a gift certificate again?”
Tom: Absolutely, and then the final thing with the operations is you really want to review that SWAT analysis that you did. SWAT stands for Strengths, Weaknesses, Opportunities, and Threats. Then you want to look at your strengths and weaknesses. You came up with some sort of mechanism for taking advantage of that, and you want to make sure that you’re executing that in your business and you really are taking advantage of that.
At the same time, you also came up with your weaknesses and threats, and hopefully you came up with a strategy too to minimize this or reduce the impact. You just want to review those periodically and make sure that you’re actually reducing those weaknesses and threats and then taking advantage of your strengths and opportunities. From there that leads us into the team section.
Ariana: This is where you are going to really look at your business plan and find those missing roles so that you can hire an outsource and cover those things. Then you really want to evaluate the roles that you’re performing and identify the next ones that you want to outsource.
What are you doing that you shouldn’t be doing or that’s taking you too much time to do and you want to kind of hand that off to someone else. That also allows you to make sure you put in place and have written well those standard operating procedures so that when you do hire somebody and get it off your plate they can continue to do it the same way that you were.
Tom: Yeah, and this was a big one that we did last year as we went through and identified what roles were we doing in our businesses and then which ones did we want to outsource. That made it very clear on what standard operating procedures we had to create so that we could do the outsourcing. This is a big one, and a lot of people don’t realize, especially if you’re just a startup and you’re doing it yourself, that you can do so much more once you outsource. Going through this process really helps you figure out what do you outsource, and then what information do you need in order to be able to hire somebody.
Ariana: The last section is slightly different. We’re not going to talk about the overview of our business. We’re going to talk about reviewing your time frame.
Tom: With this, your business plan you’re going to use in your business, but at different points over the year you’re going to use it differently. Annually, typically most people do it at the end of December, start of January, you want to update that entire business plan, so you want to look at the financial projections that you had made for the year and then compare those to the actuals.
Ariana shared her win about us just smashing our Warsaw Wine and Spirits sales numbers, and the reason that we knew that was because we just did a review at the end of the year and said, “Here’s our actuals compared to our projections. We’re well above that.”
Additionally, you want to go through each section, especially the goals and road maps for the upcoming years and update them and make sure they’re still accurate. If they’re not accurate, make any tweaks that you need to.
Ariana: Next you’re going to break down your annual goals and look at your quarterly goals so that you can track those milestones and financial targets that you wrote out in that business plan, and you can look ahead at your road map for the next quarter and make sure that those next-quarter goals still make sense from where you are today.
Tom: Then monthly you’re going to review those milestones to make sure that you’re on track for your quarterly goals, and if not you can make any adjustments to meet them.
Ariana: Weekly and daily you may not necessarily need to look at your business plan. You’re just executing your daily and weekly tasks for your business. Let’s just recap quickly those sections. First is that road map, identifying your goals, and time frames, and what you need to do over the next year.
Tom: Next up you’re going to want to make sure that you’re doing financial tracking throughout the year so that you don’t get to the end of the year and realize that maybe you’re way off. You can do it along the way and make adjustments as needed.
Ariana: Competition: making sure you’re keeping tabs on your competition and what they’re doing, and making sure you’re taking on the opportunities of any additional gaps that you find in their product.
Tom: Audience: You’re making sure that you’re keeping up to date with your customers, what they need, what they want, potentially what’s shifting, and then really looking at what do they need, and then ultimately, are you selling or not selling certain things? Do you need to make adjustments based on what your customers are telling you and what they’re ultimately telling you with their wallet by what they purchase and don’t purchase.
Ariana: Operations: implementing and executing your six-step process, and then also using your backend processes that you laid out. Your standard operating procedures, get them written. Keep them updated so that you can make sure that everyone in your business is working under the same plans.
Tom: That leads into the team. You may have some roles that you wanted to hire, or if not you may realize that there are certain things that you should hire and outsource, so having those standard operating procedures will help you then hire those people, get them trained, and get some of that work off of your plate.
Ariana: The last is reviewing that time frame, going over your road map and making sure your annual goals, your quarterly goals, and your monthly goals, all your milestones are matching up with your financials and your plan, and kind of shifting and adjusting as needed. I think that brings us to our tip of the week this week. That is the end of our miniseries on business planning, but we know that you can only cover so much in a podcast unless it would be like hours upon hours long. We also know how overwhelming it can be to start your own business and get all the pieces in place.
If you do want more guidance check out our business planning mini course. We go much deeper into how to create that business plan with videos, templates and step-by-step guides. You can learn more by going to serialstartups.co/businessplan.
Tom: That is our show for this week. You can check out the show notes on anything that we talked about by heading over to the show notes page at serialstartups.co/show21. Don’t forget that we do have the free business template there that you can download.
Ariana: Tune in next week for a special episode. Yay.
Tom: That’s going to be one of our episodes that’s off of the business planning topic.
Ariana: Yes, mystery. You won’t know until we tell you.
Tom: Oh, beautiful.
Ariana: All right, have a good week, guys. Thanks for listening.
Tom: All right, bye.
Ariana: Do you want a free copy of the template that we use when we create our business plans? Head on over to serialstartups.co/bptemplate to download your free copy, and if you want a step-by-step guidance for creating your business plan and how to use it to grow your business, head on over to serialstartups.co/businessplan for access to our business planning mini course.