How to Create a Business Plan for Your Small Business
Creating a business plan is a key part of the extensive planning and preparation required to become a successful independent professional. According to our State of Independence research, the independent workforce is 41 million strong—representing about 31% of the private U.S. workforce— so knowing what it takes to launch a small business is more important than ever. Here are 8 steps to help you create a well-rounded business plan as you begin your solo venture.
1. Define Your Services
Focus your initial business plan around a specific selection of services within your areas of subject matter expertise. For example, offering marketing or tech consulting services are good broad overviews, but designating yourself as a ‘social media marketing expert who configures and monitors SEO optimization for small-to-medium businesses’ provides a different value proposition and will attract more clients.
2. Outline a Marketing Plan
Core to a business plan is how you intend to attract new clients. Client recommendations and job referral services are excellent resources when starting out, but as your business expands, so will your marketing needs. Consider your target audience and determine whether or not efforts such as a website, social media marketing, or traditional direct marketing might be the best supplements to an initial word-of-mouth reputation.
3. Decide Who You Want to Work With
Knowing who you want to work with both initially and eventually is an important step in preparing to win business. Depending on your existing network of relationships, you may be able to immediately reach your goal client, but make sure you’re prepared to excel and deliver value before making a commitment.
4. Price Your Services
Before reaching out to potential clients, you should know how you plan to answer one of the most important questions: what your services will cost. There are a number of factors to take into consideration when determining how to price your services including your experience, target clients, and industry standards. While this will require research on your part, determining bill rate is essential to positioning yourself effectively in the market.
When pricing your services, don’t forget to account for overhead expenses that go into owning and managing a business. You’ll likely be responsible for all supplies and equipment, marketing costs, office space, and salaries for any employees or subcontractors you work with. A good budget can help you set a rate that covers your costs, and a bill rate calculator such as the one MBO Partners offers can help.
5. Choose Where You’ll Work
Do you plan on working out of a home office? Will you set up a workspace in client offices? Or, will you your own space or opt-in to a coworking facility? To decide which solution works best for you, consider factors such as your industry, desired overhead, space and equipment requirements, client type, and personal working style. Take inventory of your needs and factor this choice into your business plan.
6. Create a Standard Contract
Some clients have standard contracts they require all their independent contractors to use. Others will not, and in these cases, the responsibility of preparing an agreement will be yours. Be prepared for this and create a contract template beforehand as part of your business plan. Because this is a legal document, you may want to hire an attorney to draft one for you. Another option is to talk with a consulting services expert to discuss the best options for standard contract clauses.
7. Secure Required Licenses and Registrations
As an independent contractor, you are considered a small business owner. This designation comes with license and tax requirements from local, state, and federal government agencies. Before getting started, research what licenses and registrations your business will require to operate legally.
8. Plan How You’ll Measure Success
Everyone begins their independent career with the goal to succeed. But it’s important to define what success means to you. Does it mean immediate profitability, or hitting your break-even point after the first six months? Are you looking to earn a specific annual profit, triple your client list, or spend more time with your family? Include detailed, measurable goals in your business plan to give yourself key performance indicators you can use to gauge success.
With a solid business plan in place, you’re ready to make your dreams of working as an independent a reality.