Building a Business Plan – Part 1
Every Successful Business Has a Business Plan.
That being said, I have to admit that when I began my home piano studio, I did not write out a formal business plan or even a startup plan! I did, however, create professional documents such as a studio policy, studio brochure, business cards, tuition statements, and many other documents necessary for running my studio. I also had a lot of goals for my business but they were mostly in my head. In spite of not writing out a business plan, my business has flourished and I am now in my ninth years with a full studio and a waiting list. As I become more and more educated on the business end of things, I realize the need for a business plan. It’s never too late to write one. In fact, to insure that my business continues to be successful, it is absolutely essential.
Why Write a Business Plan?
Putting everything on paper is powerful. Similar to writing weekly assignments for our students and asking them to document their practice for the week, writing a business plan aids in solidifying goals and recognizing both strengths and weaknesses. The United States Small Business Administration stresses the importance of writing a business plan for the following reasons: to obtain outside funding and credit from suppliers, to manage operation and finances, to promote and market your business, and to achieve goals and objectives. A standard template for a business plan usually includes:
- Executive Summary (statement of the business purpose): It is recommended to write this last after you have completed the other pieces of the business plan.
- Company Description: Legal establishment, history, startup plans, etc.
- Product or Service: Describe what you’re selling focusing on customer benefits
- Market Analysis: Know your market, customer needs, where they are, how to reach them, etc.
- Strategy and Implementation: Be specific. Include management responsibilities with dates and budget.
- Management Team: Include backgrounds of key members of the team, personnel strategy, and details.
- Financial Plan: Include profit and loss, cash flow, balance sheet, break-even analysis, assumptions, business ratio, etc.
Now, all of this seems a bit daunting to me because some of it does not apply to my business. In my research I found that you don’t have to follow a standard outline. It is more important to create a business plan that will work specifically for your business to give you direction, examine and clarify goals, allocate resources, and prepare for problems and opportunities. The plan can be done as simply or as detailed as you like.
Whether you are a new or experienced studio business owner, I urge you to consider writing a business plan if you have not done so yet. To get you going on the process, here are some fun suggestions:
First of all, write a letter to your studio and date it a year in advance congratulationg yourself on completing your goals for the year. I got this idea from an article I read years ago on New Year’s Eve regarding setting personal goals for yourself. I did it and was amazed at how many goals I had achieved in the letter. Be specific in what it would look and feel like to have met your goals. Place the letter in an envelope, seal it, and do not open until the following year.
Ideas – Dream Big! Brainstorm!
Take some time to answer the following questions:
- What would you like to change about your studio?
- What would you like to change about your life?
Revisit in three months and ask yourself, “Have you started to make the change? If not, why?” Then, revisit in six months and ask, “Have changes been made? If not, why?”
What is Your Five-Year Plan? What is Your Ten-Year Plan?
Where do you want to be living in five years? Doing what? What changes would you like to make in your personal life? What hobbies will you be pursuing? How much will you be working or teaching? How much money will you make per student? What will be your total income per year? Then ask the same questions for ten years.
Next month I will explore more options for embarking on building a business plan. To be continued….