Most people have seen the business plan templates that cover the product or idea, the market, the team. But a business plan misses some very important things that will make the difference between a business that is successful and one that is not. Those are your personality traits, your work habits, and your support system.
Passion is important, but it will not guarantee success.
So here are 12 questions to ponder and maybe even answer in your own Personal Plan.
There is no correct answer to the following questions. You can be very successful and be a bad at delegating. Some owners understand nothing about cash flow. However, you must be aware of what traits you don’t possess and compensate in some other way.
Why do you want to start the business? Is it because you want to be your own boss? Because you hate your job? Because you want to be rich? Because you have the world’s greatest idea? No right answer here- just recognize that your immediate motivation may not be enough to sustain you through the hard times. You may become that nasty boss you hated. You may end up reporting to an investor you hate more than your old boss. You may not get rich for a long time, if ever. The idea may not work and you’ll have to come up with another one.
Where is the money going to come from to start the business and sustain you personally? You will see a ton of advice about 9 months of salary to sustain you and hard dollar figures of what it will take to start. But all of that advice makes assumptions about what type of business you are starting and what your personal situation is. If you are the sole breadwinner for your family, the answer is much different than if you aren’t. But one thing is certain. It takes money to start a business and it takes money to live. What are your plans for that? And as a follow-up, what if that plan falls through or the business takes longer to get off the ground than you expected? (Which it undoubtedly will.)
Have you been involved in a small business? Do you know what to expect? The short answer is “expect anything”. Do you understand the personal liabilities you take on as a small business owner? Do you understand you can be responsible for things occurring in your business that you may not have known about or don’t understand? (Payroll taxes, product liability, employee claims.)
Are you able to sell? I’m not referring to “What can I do to get you in this car today?” selling, but “My business offers this that can help you do that. Let’s work together.” No one is going to be able to pitch your ideas to others– lenders, investors, employees, customers, vendors– as well as you or will be as impassioned about that pitch as you. And those stakeholders want to hear that pitch from you, not from a paid sales person.
Do you have a support system of advisors, mentors or sounding boards? If not, I would start looking for some because they are incredibly helpful. Look for experts in your industry and other small business owners. They can be people you know personally or contacts you make on LinkedIn. Just remember to use them thoughtfully and use their time wisely. And always thank them profusely for their advice.
Do you understand the concept of cash flow and how it differs from profitability? If you don’t, learn it or find a resource that can help you with it. Lack of cash flow can sink your business faster than being unprofitable.
Can you assimilate a lot of information quickly and make decisions? You will be confronted with situations you may know very little about and you will need to learn enough in a short period of time to respond appropriately. If you tend to over research or like to sit on decisions for weeks at a time, you may want to find a resource that can move you along faster when needed.
Can you delegate? If you tend to do everything yourself, the company can only become as big as you. If that’s your plan, fine. If that is not your plan, make sure your delegation skills are sharpened as you will have to offload tasks and decisions to others to make progress.
Do you have the discipline to motivate yourself? There will be times when you are receiving NO external encouragement or direction. Can you continue on your path with the same deliberation and focus when you are discouraged? When you are not sure if you are succeeding? When your best employee leaves? When your investor gives up? When you lose a big customer?
Do you understand that just because you want it to work with all of your being does not make it happen? Passion is important, but it will not guarantee success. That saying “Do what you love and the money will follow” is just not true in small business. You may not make money even though you love your business. Rather, do what the company loves and the money will follow.
Can you separate your personal relationships from what is good for the business? I’m not asking if you can be a mean, hurtful individual. But could you fire your best friend if he or she is not helping your business? Could you tell your brother who invested in your business that you won’t be meeting the payment schedule you agreed to? Small business is full of unpleasant, but necessary conversations.
Can you deal with multi-variable formulas with no correct answer? (x + y + z) * a = ?? When you market a product or service, there are a number of factors that will affect its success, many of which are outside of your control, some of which you may never be able to identify. Did a product launch fail because of the product, the timing, the message, the channel, the competition, the economic climate, the inventory levels, the company’s ability to fulfill, the audience? Conversely, what if your launch succeeds? Do you know why? Can you replicate it?
Again, I’m sure you can find examples of very successful business owners who did not answer “correctly” all these questions, but I bet he or she had resources that compensated for where he or she fell short. So answer these questions honestly, seek the appropriate help, and go forth and start a successful business.
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