business plan

Personal Strategic Planning

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If you want to accomplish something, it helps to set down your goals in writing. I have never been a fan of New Years Resolutions, but I do find the end of year to be a good breaking point to begin strategic planning for my business and my life. Many people separate their business planning from their personal planning, but to me this makes no sense. After all, business and work are a very significant part of our lives, so it only makes sense to plan all of it together.

Ever since I was 14, I have created one year strategic plans for myself, detailing what I would do in the following year. The first step in writing a new plan is to review the previous year and learn from it. In this post, I will assume that you have no previous plan, and will walk you through how I create my own plan from scratch. So take out a piece of paper if you like to write by hand, or open a text editor in a new window!

I always write my plans in the tone and format of a journal entry or letter writing to my future self about what I have accomplished, and congratulating myself on how great it must feel to be where I wish I was today. I break out my life into 6 distinct areas which hold the most importance to me – Family, Significant other, work, business, self, and social life. Your categories may be different, but I find this is a good general starting point for everyone, even (especially) if one of these areas is not going so well for you. In the past, I consolidated work and business into one category. Since I work for a large company and am also starting a business, my goals are very different in these two areas, so they have different categories. You should combine them if it makes sense.

Family

I use the family category to describe what is going well with those in my family – parents, siblings, children – and what could use some improvement. I usually start by describing the greatest successes of the past year – times of joy with those close to me, and then go on to describe how I will continue this trend of being closer to my family and how to improve relationships with them. This might be as simple as committing to writing a letter once a month, or calling once a week. I purposefully leave out wife/significant other, as she gets her own category!

Significant Other

Similar to family, this section has varied widely over the years, from the time I started at age 14, describing all the ways I would win over my crush at the time, to today where I look for ways to deepen and advance my relationships as an adult. If you are single, describe what is important for you to find in another person, how you will go about finding this person, and what it will be like when you do. If you are already in a committed relationship, commit to making it better and more fulfilling, and describing what it is like when you have accomplished it.

Work

Work for me consists of the daily grind in a big corporation. For those of you who have chosen to work for someone else, this section is all about career goals. This also varies widely for me depending on where I am in my career. It can be a section talking about how I will search for and find the job I want, or a discussion of how I will excel in my current role – the skills I will learn, the relationships I will build, the improvements I will make in my corner of the company. Sometimes, I will strategize how to get myself promoted, or a raise.

Business

I am starting a business in January. This section becomes my one year strategic plan for my business. Since I am just starting out, I have outlined goals and strategies for finding customers, how much monthly revenue I will attain this year, which markets I will enter, and how I will grow my customer base and company presence. I have strategies detailing where and how to outsource work, which networks I need to join or build, and how to go about doing each of these things. Every business is in a different cycle and should have a different strategic plan. Don’t worry if you miss the mark at the end of the year. What’s important is that you write down your business goals and then actively work to accomplish them. Last year, my goal was to find an idea for my business, and to build it. I almost made it!

Self

We have a tendency to neglect our personal growth. But I believe that if we stop growing personally, every other area of life will suffer. You can’t neglect anything on this list if you hope to find true fulfillment in life. The Self category revolves around personal happiness, health, and well being. My personal plan focuses on learning new skills of importance to me, reducing wasted time, and improving health through healthy eating, exercise, and meditation. In the past, I have committed to working out 6 days a week, being vegetarian, learning a new language, and understanding women better. I am not always successful, but just the continued effort will have a profound impact in other areas of your life. Many of these goals end up spanning multiple years, and may (should) become a staple of each plan going forward.

Social Life

I get very wrapped up in my work and relationship, and tend to forget the important aspects of a social life. I feel it is important to have friends, network, and meet people that matter to me. Social life encompasses all the people outside of family and business who you can relax with. I have had goals detailing how many friends I would make when moving to a new city, deepening connections with existing friends, or reconnecting with old friends. This can also include going out more/less, trying new activities like backpacking or rock climbing, or joining networking groups for shared interests like reading clubs.

Conclusion

I would recommend you take everything you write lightly. Make it into a letter to your future self detailing your accomplishments and how you did it, and have fun with it. Your plan should be a pleasure for you to write and a pleasure for you to read. I use mine to review every few months throughout the year. I have found that I will generally accomplish 80% of everything I put in my plan. Some goals will never make it off the ground, while others will develop into something more than I imagined and will consume more time than I had planned. That’s what you want, so roll with it. Next year you can make a new plan and put in what is truly important all over again.

This kind of planning also helps me keep sight of what is important in life, so work, business, or personal life doesn’t take over other important areas of my life, leaving me unfulfilled. You don’t have to show your plan to anyone (I never do), but making it just for yourself is key to achieving your dreams.

What about you? Do you make personal plans? I would love to hear about what kinds of planning have worked for you in the past, and how you put together your thoughts for the future. Share your tips in the comment section!

Internet Start Up Mistakes and How to Avoid Them

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I launched my first web business 2 years ago, and just like that the venture flopped. Resurrecting the whole thing was pointless, and I spent a fair amount of time reflecting on what went wrong, what went right, and why it was doomed to failure from the beginning. Since that time, I have met many people in the same boat, or who were heading in that direction. To help prevent others from facing the same situation, I compiled a list of the main mistakes I made and see others making, and some tips on how to avoid them.

1) Not seriously writing a business plan

Many first time entrepreneurs and even some long-term entrepreneurs make this mistake. Everything you read online will suggest writing a business plan, but many people take this step for granted. Perhaps it is hubris that they have skills others do not, and thus are bound for success with their great idea. The problem is that the idea may not be so great, or the execution of the idea may fail. The business plan forces you to consider this carefully and honestly, to assess if it will be a successful venture, and what your chances of success are.

This is an easily avoidable mistake to make. Don’t just commit to writing a business plan, but commit to writing a business plan which is honest, as harsh as it needs to be, and identifies as many risks as possible. The most critical section for new web startups is going to be the financial section and the marketing section. For finance, ask yourself very carefully about the business model, and realize that the vast majority of web businesses do not make money, even for very large sites. Is your model  a good business model? How many users will you need to turn a reasonable profit? What are your costs per user and revenue per user likely to be? How many other businesses have turned a profit using this model, and how long did it take them? Did those businesses have success factors you lack? There are many such questions you should carefully analyze and write down a formal response to, even if no one will see it but the internal team.

Secondly, marketing. The question I like to ask is “is this a <major blog in your niche> worthy story?” Would they write an entire story dedicated to your product, or not? If the answer is no, you may want to seriously consider if your product has a good potential of success. The second piece of the marketing section  is market research, and really understanding the ins and outs of your competition. On the web, every other site is a competitor, not only in your own niche. If someone would rather be on facebook then your page, they will be. And finally, a good knowledge of other similar sites is critical. What are their competitive advantages? Why will you be able to siphon off their users to your own site? Is your site unique enough or superior enough to cause people to change their habits? To avoid failure, be realistic, even if the answers are harsh.

2) The Me Too Syndrome

I constantly talk to web entrepreneurs who fall into this trap. They see a major success (Some bloggers, twitter, and facebook come to mind) and then say ‘if them, why not me?’ They set out to create an also-ran product with nearly all the same features. The problem is, even if you build something which is fundamentally better then the competition, you still have to make users understand that and accept it. This works sometimes, but is the rare exception and not the rule. Generally, if you are entering a competitive space with a successful competitor, go find a new business.

3) The ‘If you build it they will come’ Fallacy

Some people have the assumption that building something means people want to use it, so they will. I actually made this same assumption when I started my first web business a few years back – thinking that there was search volume for my product, it was well designed, and so people would naturally start to use it. In reality, a business has to build out a customer base through word of mouth, advertising, brand building, and public relations. You can’t sit around for Googlers to find you. They may, but they also may not.

To avoid this, always assume that no user will find your site unless you personally direct them to it. This will help you when considering the proper marketing strategy. Building up the business case and the marketing plan in your business plan will help here. Essentially, you will need to help users to find you. Having a great product only keeps users, it doesn’t generate them.

4) The design trap

I like good design. I am not so good at creating it. My strength lies in the more technical and business oriented areas of startups, not in overall product design or graphical design. Although this is one of my weaknesses, I realize that design is a very important piece of product development. The trap is when the design becomes the product, or when the design is never ending. In the first case, a really cool designed product has forgotten about the utility of the product for the consumer. Who wants a really nice looking lump? In the second, a form of scope creep, continuous refinements in the design space can leave a product less polished, or delay delivery far too long leading to high cost.

I see a lot of web startups who tweak and tweak without ever finishing. I would recommend setting the design early on, and then going through several rounds of refinement, but leave a limit up front, and only exceed it in extreme circumstances. Once you are successful, you can always complete a redesign.

5) Product worthiness

Is your product really something other people want a lot of? Really? Is it iPod good? If you can’t honestly answer yes to this question, then what are you really doing? Perhaps just starting a business without a good product. This, along with the also ran products, is one of the main reasons I have seen many new startups fail.

A friend of mine nailed it one day when we were talking about mobile apps. He said he sees a lot of applications on the iPhone which are ok, but not great. The truly great ones come about when an existing user searches for an app she really wants, but can’t find it, so designs her own, and designs it well. This leads naturally into…

6) Filling a gap

As a corollary from the previous section, does your product fill a gap in your customers needs? If it does not, then why would a customer pay for your product? Even if your product is free, if a customer wouldn’t be willing to pay for it, you should evaluate the overall utility the business you are starting really has. Making sure your product fills a customer need is a basic part of product design, and should be considered before any significant capital has been spent, whether in time or money.

Also consider the life space that your business will occupy and how that will affect price points, even for free services. Utility applications and web sites generally have a higher price point, because they can actually improve your users life. Entertainment or social applications are more take or leave, since they are unlikely to materially improve your users life.