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Planning Steps

Many good ideas fail for lack of planning. Often times, planning is more a matter of research and understanding than it is of actually writing down steps to something. If you are going to do something, you need to know what is realistically involved in it. That means you need to search out information. Sometimes it means you need to dig a little deeper to find not just the rules, but the exceptions to the rules!

So, startup of any new thing is going to consist of these steps:

Research - find out what you are really getting into, and what is required.

Analysis - Determine whether it is practical, and what accommodations you might need to make it work, whether you have the resources, etc.

Written Plan - Write down the order in which you'll do things, and how you will accomplish the various steps.

Execution - Start following your plan step by step. Make adjustments as you go along, and keep re-analyzing to determine whether what you are doing is working or not. If it isn't, then research, analyze, and rewrite.

Business Plans

You can get an outline for a business plan from the SBA online, or from any other source. But a business plan can mean two different things:

1. A formal business plan, which you need if you want to get financing or if you intend to form a corporation. This plan has specific items that need to be included, and an expected format. Writing it up can be a major chore. There is software to help you do this, or you can work from a basic outline.

2. A flexible "working plan" which may be more appropriate to a shoestring startup. If you don't need assistance from another business to get going, you may just need an outline of what your plans and goals are, and how you intend to achieve them. A flexible plan will mark milestones by achievements, not by dates. It is important that you have some idea of where you want to go, and what your standards are. It is also important for a shoestring startup, that you have some idea of when you will change your operating methods to more standard ones - for example, if you do not hire a lawyer, determine when you'll know it is time, or if you use a single phone line for home and family, what is your criteria for changing it. You don't always need a formal business plan. You DO always need a sense of direction and planning.

Setting Goals

Goals fail for two major reasons:

1. They are unrealistic. Goals have to be firmly grounded in reality! They should be aimed at progress, not at ridged criteria that must be met by a certain date. Later when you have some idea of the predictability and patterns for your business you can set more solid goals, but at first, they need to be flexible and they need to accommodate changes. And before you set any goals, you need to know what is realistically possible. A good goal should require you to stretch yourself a bit, but should not place a burden on you that is impossible to achieve. "I will be making XXX number of dollars by the end of the month." may not be a realistic goal for a startup. "I will see a positive growth trend over a period of three months." is a very good goal for a startup, because it focuses on progress, and in seeing what is really there rather than an arbitrary standard that may not have anything to do with reality.

2. They are too vague in scope. It is fine to say, "By this time next year I want to double the income of my business." But such a goal is useless if it is not followed by a breakdown of tasks to achieve the goal. You need to not just state the goal, but HOW you are going to achieve it. And you must be specific, and focus on tasks, not on objectives when breaking your goal down. For the goal above, you would then write down such things as "I am going to join one new trade association with marketing benefits by (date).", "I will research creative ways to use purchase incentives.", "I will form and institute a system for marketing to existing customers during the month of January, and put it into effect in February."

Goals are more effective when they are based on habits formed around daily tasks. But it takes a month to form a habit (most people give up at 2 weeks), and then you have to maintain it through any changes that interrupt it.

Task Oriented Milestones

Some of the milestones in a business are marked by changes in how you conduct your business. You may go from processing every order by hand, to being able to afford a shopping cart system. You may switch from hand printing envelopes to using labels. You may begin to hire out more of your marketing tasks or other items. A shoestring startup often starts out doing EVERYTHING yourself. But that changes over time. A good business owner will constantly be aware of operating changes and needs, and anticipate impending growth changes. You'll need to research ahead of time so you know what direction you want to head in when you reach a milestone. The transition will be much smoother if the change does not catch you off guard, and you'll have better options if you have researched ahead of time instead of just grabbing something in a hurry to do the job. The day I paid for my first advertisement was a milestone in my business. Getting a second phone line was a biggie. Purchasing my own domain name was a memorable occasion, as was the addition of subsequent domain names. Getting a laptop was a cool thing. All these things came about as a result of success, and because of a need for change.

Management

The most important management rules for a shoestring startup are:

1. Don't buy anything you don't actually need. Don't pay for information you can get for free. Use free software if it will actually do what you need. Get by with a cheap printer if you can. Make do where it is not going to hurt your business in every instance where you can do so. Don't buy anything just because it is cool or has a cache you like. Make sure that it will have a positive affect on your ability to earn NOW before you purchase it. Later, this rule can change if you have better cash flow, but you must learn to determine clearly what will help you earn and what won't at first, and ONLY spend money where it will increase your income.

2. Research options for hiring out tasks you may not be able to do a professional job with. This doesn't mean you shouldn't do things yourself. It just means you should research your options and not assume you cannot afford it. You need to know what you are getting into when you do a job yourself instead of hiring it. Making a business card is one thing - most people can turn out a classy looking one in PrintShop or Publisher. Building a website is something else entirely and has a whole range of technical and aesthetic issues that won't occur to you unless you study up on it. Find out what it takes to do it yourself, and then find out what someone else would charge for it (and what you get for your money). If you know some background on doing it yourself, you'll have a better idea of what you need from a professional, and you can purchase only what you need. If you research hiring it done, you may find that you can hire it for very little more than you'd pay for the software or equipment to do it yourself. The point is to base your choices on facts, not on assumptions.

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