Let me give you a kick-ass business plan sample ! I’m putting the bar high because i want to give you my years experience as an entrepreneur so you avoid as many mistakes as possible and succeed at building something sustainable. The main thing here is to avoid the mistakes that will kill 80% of the business started within their first 2 years. I will show you were I personally failed in my previous business and the mistakes you need to avoid at all costs.
Yesterday I wrote about 12 great business plan templates and to be honest i haven’t written anything yet about Scale My Ass, so it’s good timing ! We’re going to use this as an example to build a good business plan template so you can use it, but the most important : i’m going to ask tough questions so your business plan is so precise that it’s execution will be a walk in the park. My promise is that if you follow the process I followed and get as precise as I am, your business will have really realistic chances of survival.
Also, you will see very precisely how I acquire customers – which is the most complex thing about a business, so i’ll try to keep this as practical as possible.
First : what problem are you solving?
The first and biggest question you need to answer is what problem you want to solve and why solve it. What’s your personal juice in that game that will make you again and again wake up at 5 am to deliver value to your customers.
I read a very interesting perspective of an investor – Jason Calacanis, who was talking about how the selection process at incubators (like Ycombinator, 500 startups…), in particular when he saw FitBit pitch :
It was just obvious that those products were hot. Why? Well, they were all designed well and they solved an obviously large problem.
The point of entrepreneurship is to solve problems efficiently.
SMA’s business plan sample
For me, Scale my ass (SMA) is an education business that helps entrepreneurs grow their businesses. My intent is to make the journey of learning business skills simple and entertaining so you want to stick around. And eventually with enough learning and action i hope to help entrepreneur grow their own stuff and get to the level of success they want. This blog is there to inspire entrepreneurs, and give them practical skills so they achieve the level of freedom and peace they need to do good shit in the world.
Personnaly I do this because i’m passionated about entrepreneurship and I think that it’s just the best way to help people and give something back to the world. I’ve been lucky with a lot of things, I feel it’s about time I give back 🙂
What are your customer’s biggest pain points ?
This question is maybe the most important of the entire business plan and there’s a really good reason why Sequoia Capital is asking it to all the companies pitching them. You need to be very precise on that one (i’ll show you how to do that easily, no worries).
Here’s my answer for SMA :
- Pain of struggling to develop their business to the level they want (that’s totally me actually 😉
- Pain of not being free (financially, or being stucked in a job you don’t like)
- Pain of not living their lives to the level they want
- Pain of not knowing what to do precisely to get things done
So these are my assumptions, and I know they are fair but likely not yet precise enough, so here are some actions i’m going to take to get clearer on the pain points within time :
- Ask entrepreneur what’s their biggest pain point
- Ask what they need to grow their business
So adding on my TODO list : add a poll on SMA to do just that. I could research the market more but I think i have a basic vision for now, that’s good enough to help me progress and that vision will get clearer and clearer with time and interacting with readers.
How to understand your customers’s pain points (ask Amazon.com)
Now if you don’t have a good idea of your customers’s pain points, no worries, i’m going to explain a simple way to get a good vision about it.
Here how you can do it easily :
- The best is without any doubts to interview them : nothing than direct contact will ever be better. The best example I have in mind is Stripe (disclaimer : I love Stripe ;), where even the founders provide direct support to their customers. The reason is it helps you to stay always concentrated on your customer’s pains points and make sure your product is providing real value.
- To find out what are your prospect’s pain points, my personal favorite technique is to research Amazon bad comments – it’s a mine of information ! (note : feel free to extend that to forums and blogs)
Here’s a good example of customer’ s pain points : just right under I reference the book “Traction”, so let’s take a look at what people are saying about this business book. It’s a very simple, and effective strategy, take a look by yourself :
Pretty interesting right ?
The takeaway from these bad comments
So what is the main takeaway from these critics (sorry if the author of the book is reading this, it doesn’t reflect the book quality, I pulled out the bad comments, out of the hundreds of super nice comments) ?
- I think the biggest is people expected actionable marketing strategies. They want copy-paste stuff that can be used right now. And it’s true that the book doesn’t deliver so much on that side (it’s still very inspiring so totally worth reading).
- It’s too general, the book doesn’t address practical and in-depth strategies and show how they were executed
- It’s not relevant to non Internet businesses
So now we have a better idea of pain points and much more precise than what we started with. We started with “Pain of struggling to develop their business” and we’re now around “Pain of not having precise action-plan to execute to develop their business”.
Isn’t that awesome ? Big evolution from our first assumptions right ? Well this is what happens when you start digging through !
You need to do the same for your own business. Now to be fair for me to get a good idea about customer’s needs, I would need to do that for 10-20 marketing and sales books to get a really good vision about what my prospects really want and what are their biggest pain points.
TODO : analyse 20 marketing and sales books’s bad comments. And maybe add the data to this business plan sample.
Second question: how do you acquire customers?
The main point here is to be as precise as possible on how you acquire customers. Ideally you want to have experience on the matter otherwise your strategy will not be precise and will not see the problems ahead clearly. Let’s break that down to small components together.
1. Decide your acquisition strategy
If you don’t have experience on how to acquire customers I strongly suggest you read a few 500 pages books about it or work with someone who does. There’s no question that your business will fail miserably if you don’t (we crashed our first business because of that).
There’s an excellent resource to understand what strategy you can use : the book Traction : how any startup can achieve explosive customer growth. It contains a set of detailed strategies that are explained step by step on how to acquire customers, like :
- Targeting blogs – the book has a good example on how Mint acquired 40.000 customers before their launch
- Publicity – how to pitch medias to get traction
- Unconventional PR – going something unconventional to get publicity from medias and blogs
- Search Engine Marketing – online ads. Don’t do that ! I strongly suggest you avoid that one if you’re not already very experienced entrepreneur since you will need to burn a lot of cash to get a positive ROI and probably will need to have multiple products to breakthrough ; the ad market is very competitive since it allows a business to scale a large size. Go there only to scale your business, not to find out if you have one. Personally so far i’ve only lost money doing advertisement – a couple of thousands probably so not a lot, but if this scares you just skip that one. Unless you can survive with burning 10-20K don’t even bother.
- Social and Display Ads – same same : ads. But on other social media websites
- Offline Ads – same same
- Search Engine Optimization : to my opinion the best strategy to acquire customers but it takes a good year before you can have any ROI, it’s the reason most people just abandon it
- Content Marketing : creating content to attract customers and build relationship – you have a good example with SMA here !
- Email marketing : this part is more for converting a prospect into a customer (haven’t read that part of the book yet but plan to…)
- Engineering as Marketing : creating a widget, or a free product that help customers solve problems
- Viral marketing : get people to refer other people around your product. Add this strategy will definitely help but don’t count on it only ; most people fail at it. On the matter, David Skok from Matrix Partners has a great series of articles about developing viral products (i’m a big fan of what he wrote, his advice really helped me when I started my entrepreneurial journey) i recommend you check that out !
- Business development : classical process of creating relationships with partners to develop your business
- Sales : how to build a scalable sales process
- Affiliate programs : how to build a solid affiliate program that will bring you leads and customers
- Existing platforms : how to use existing platforms like Facebook or twitter to build community
- Trade shows : good chance to be in the middle of a pool of customers – but requires some money
- Offline Events : organizing events like meetups can be a way of traction
- Speaking engagements : speaking live in front of people is the best way to get in touch with your audience and see their reaction live
- Community building : a bit of what we’re doing around SMA
Now a bit of warning : don’t take this book as the bible to execute the strategy, but more take it as a pointer to a strategy that could work for you.
2. Dig the strategy to have step by step actionable processes
You will need to do your homework and build skills on the strategy you choose (read a few 500 pages books on the matter to get a really good understanding on how they work is a start).
I suggest you start reading this book and decide 2-3 strategies you can start with and dig them to the point you really become an expert on the matter. In my experience business is about doing very well one thing over and over again !
So, here’s how i’m going to execute so you have a precise example of what I would write in the BP.
3. SMA’s customer acquisition strategy in detail (practical example)
Now one could argue about the need to be so precise here and I would totally agree that if I had to pitch investors I probably would not present “down to process” information to them but just include a general overview of the situation. BUT BUT BUT… that said, for the sake of your business, you need to be VERY PRECISE about that one. And have additional strategies in reserve because the main one will probably not get executed the way you thing it will. This is the point where I crashed my first business I created. We were not precise enough about customer acquisition and the business died because because past our first circle of friends/collegues we couldn’t find a way to get regular customers. So my advise : be as precise as you can, even down to process level as i’m doing here, it will definitely serve you in the long run.
Here’s how i’m going to do this. I’m going to develop a blog strategy as the main way to attract customers. Why ? Because it’s a very scalable strategy and i’ve been blogging for quiet some time (4-5 years) now, so I know pretty well how it works. This strategy will help me to build relationships with my readers and solve practical problems for them. Then we will add paid products to the blog to monetize our efforts. I target that it will take me one year full time of work before I’m going to get any results. So one year investment.
How this strategy will it be executed (in a nutshell)
- To know what i’m going to write about i’ll start by doing competitive keyword analysis :
- Research enough keywords to give me good fit between search volume and competition
- Select my keyword and make sure it’s not too time or event related
- Then writing each article :
- Wake up at 6AM and write at least for 3 hours uninterrupted every day
- Start by doing web research on the subject and make sure I use enough expertise on the matter ; check business books, etc.
- Write my copy – at least 2000 words
- Verify the internal SEO of the article – use Yoast to make sure the article is optimized for the given keyword i’m writing
- Make sure I have a compelling title – so my CTR is over 5% on google search console
- Editing the article :
- Verify it’s result oriented enough like copy-paste applicable strategies !
- Add images / infographics so it’s compelling enough to read
- Some verification points before publication :
- Is internal SEO correct ?
- Do I have enough research data and expertise to share ?
- Do I have enough practical strategies readers can take out from the article ?
- Is the article visually compelling to read and well formatted ?
- Then promotion of the article itself :
- Add internal links to the article itself
- Promote on internal mailing list and social networks
- Find close competitors on similar topics and get them to link to our ressource
- Find more experienced entrepreneurs than I am and ask them to give their honest opinion about the article
So we have a realistic base for a customer acquisition process here.
Some other strategies to dig up
I also want to use also 2-3 things that i haven’t worked on, so these are new strategies.
- I intend to pay writers to create content for the blog so it’ll free me some time, and it’s a good process to start scaling up the blog and writing processes. I think it’s a bad idea to get the articles done by someone else because it’s core business, but…
- maybe 10-20% of the articles could be done by experts in their fields so we bring more value. Maybe find PHD’s that could write a summary of their work, so someone with in-depth expertise on a matter would definitely be great !
- probably some articles could be prepared, like some research done so it would save me some time
- I want to create a Youtube channel also with 2 things
- Summary of the articles and my take on it (more personal)
- Interview of successful entrepreneurs – how they build a 7 figure business. This will allow me to create relationships with more experienced entrepreneurs, so I can show my readers precisely how it’s been done.
- Build sales funnels – but i’m not yet set up on that one because I need products to do that and it’s a bit too early but will do !
- Twitter strategy : I already build a good twitter strategy that works for another blog, so I’m just going to replicate that one. It will help me to attract follower, typically around 10 per day, which is not a lot but it doesn’t really take me time, so it’ll pay in a year or so. Just fire and forget sort of !
I’m going to dig this much deeper to detail a very step by step process in next articles but here i’m just keeping it to a reasonable length.
Let me give you a practical example on the promotion part so you see how detailed each of the strategies should be. The idea is to be precise enough so you know exactly what to do and how you are going to acquire customers. Whatever you do, you will have to solve that problem and document it if you’re building a real business so rather do this from the start.
Our article’s promotion process (practical strategy)
Here’s how we will execute the part 5.3 of the process. As I said you need to detail each part of the process you’re going to undertake to acquire customers (but to keep things short i’m only going to detail part 5.3 here of this business plan template).
I didn’t invent this strategy i’m borrowing it from real SEO experts (Neil has a ton of other strategies on the matter, check his work it’s gold) and this is exactly what you should do too : assemble expert-level strategies together to glue all these blocks together to create something that works.
Ok so enough talk, first step, we will find close competitors on the keyword we will try to rank for :
Ok so we found a big website Bplans.com that sells business plans so we’ll take this website as a base to find out who’s liking to it. Now, let’s ask Google who’s liking to the site :
Perfect, so we have a list of websites that are linking to this ressource. Next step is to contact the ones that seems to be the best match and tell them that we wrote an article that could help their readers. Here’s one good example of a website that links to Bplan that could profit also from this article :
So, last part is to find a contact point and write them an email to tell them about our article :
I just visited your page about “I need help with a business plan” likely intended for your students. I wanted to drop you a line because I wrote an in-depth article about 12 great business plan templates that I think could really help your readers. I reference free business plan templates that are helpful for anyone starting a business. Each of these templates ask tough questions a business should ask and, i believe will avoid to make big and costy mistakes to anyone using them.
Again these templates are free and most can be downloaded in PDF. I would be honored if you added a link to the article, so your readers can find these resources easily and use them. I believe it will save them time (and hopefully some money).
Here’s the article : http://www.scalemyass.com/12-business-plan-template
Should do the job, hopefully i’ll repeat this enough and i’ll get a few backlinks !
I think the strategy could be automated to some extend and probably sub-contracted to prepare a list of websites that i could contact. That would save some time.
So here we have a business plan that’s realistic and precise down to strategy level. Again you need to detail all your customer acquisition strategy step by step and make sure it’s realistic (you have experience about it and you know it works).
Third question : how do you serve your customers ?
A big mistake I made that cost me 2 years nearly full time was to build the product before anything. I’m done with this approach and i have to warn you against it. Unexperienced entrepreneurs tend to think building a product first. I would personally say it’s the most attractive path if you want to fail.
Entrepreneurship is to serve people
Entrepreneurship is to serve people. Not yourself. People you want to help. So one needs to put them first to build something that works.
The best way to make things happen is actually reversed : build a community of people around you that will actually tell you what they need. I’ve taken this approach successfully throughout my last blog and I think it’s really the best way to build a business. It actually combines doing market research AND building a prospect base at the same time – pretty time efficient. This is also the reason my approach in terms of market research is pretty reduced (cf. 4th question). I’ve done a bit of research hereunder but I really limit the extend of this part. I’m building an audience and will ask at some point my reader to tell me what they need. If you persist in thinking you want to create a product first, you need to dig in really deep into market research and interview a LOT of your potential customers. Personally I think that if you follow this approach there is a very high probability that you will loose everything – time AND money, just to realize too late that all the time you spent was on stuff people did not want in the first place. There’s a BIG difference between what you think people want and what they end up buying. After all, so many of us have been using Windows 95…
Sequoia, again, has good questions in regard to that :
Solution – Demonstrate your company’s value proposition to make the customer’s life better. – Show where your product physically sits. – Provide use cases.
Product – Product line-up (form factor, functionality, features, architecture, intellectual property). – Development roadmap
Business model – Revenue model – Pricing – Average account size and/or lifetime value – Sales and distribution model – Customer/pipeline list
For SMA the model i’m targeting will be to create kick ass content to help other entrepreneurs. I could do that for free for the rest of my life so it’s not a big deal if the blog doesn’t kicks off. I’ll be happy about the relationships started and the knowledge gained in that area alone.
So to build the community we’ll create actionable solution content.
For products, I think e-learning or coaching will do the job but i’m not there yet. Again i’ll let the community tell me what needs are not yet met.
Fourth question : what is the market size ?
Another big mistaker I made there. I lost a good 4-5 years because of that. Let me explain. The last business i created was far too narrow to bring big enough flow of customers. I raised to top level inside my niche (I advised the French Prime minister – as one of the top experts in my niche – not too bad), but business wise it was a clash (hard to raise to 7 figure). Big lesson right there : you need to find a business that’s not too small and not too big.
Here’s a great illustration that gets to the point from the book Disciplined Entrepreneurship : 24 steps to a successful startups by Bill Aulet, illustration by Marius Ursache (it’s a really GREAT book, i totally recommend you reading it, written by MIT professors expert on entrepreneurship, awesomely illustrated) :
Great point. So, practically what does that mean ? We need to find out who are our potential customers and count how many of them are around. Here’s how we can do that :
1. Identify the profile of the customer you target
But, why is this so important, to begin with ?
Russell Brunson explains this perfectly in his book DotCom Secrets, he uses this image :
You need to know who is your target customer, so you know where to find them ! This is why this image is so powerful – awesome job done here about simplicity. And the thing here is to identify your paying customers, which is the ONE condition to have a business. So I know I want entrepreneurs, but how can we find out how many of them are around ?
2. Gather basic numbers on your customer’s base
Time to make some calculations and find out how many entrepreneurs are there (the TAM – total addressable market – how many guys you can target in total in your market).
For Scale My Ass, i’m addressing entrepreneurs. But that’s not precise enough. So let’s dig this a little more and narrow down our market and ask first questions :
- entrepreneurs, like broke entrepreneurs, or rich ones ?
- Entrepreneurs starting a business, or the ones already having a business ?
- Where will they live ?
There’s a nice little tool I like using to do market research is to poke on email databases (very good tool to do market research) :
We start at 10 million leads, and from there we’ll filter out the businesses that we’re interested in to get a quiet precise idea of our market size.
So next, we add some criteria to get closer to our customers :
So now we’re around 4 million leads, of businesses that are making some money. I also tried to restrict the number of employees to more than 4, and I got the lead number to 2.5 millions. So 1.5 million leads of small business with at least one employee. And 4.3 million from 2 to 99 employee – you get the idea on how to play with numbers.
Next I restricted the leads to people who had specific job titles so it would give me a clearer idea of the real amount of leads I could get of the total lead numbers :
So 1.2 million. At this point we have a very vague idea of the target. We now need to get more precise to see what is the market structure.
3. Let’s get more refined
We have very general information there, because out of all the businesses around not everyone is going to be interested about what we offer. Next step is to segment submarkets to verify our assumptions and know precisely each entrepreneur in each industry type (ex : designers, shop owners, etc.). Here’s a way to do this to analyze sub market :
For now, i’m not going to get into too much details because I can spare the effort by simply building the blog and asking that question to my readers which saves me a lot of time.
Let’s just ultra conservative and restrict the market to only 1/20th of this original number which would give us 60.000 targets. Let’s say we only win 1% of that market, that’s about 600 businesses. Can we make a living out of that ? Provided we sell 1.000€/year products, we do. And adding other english speaking countries like UK, Australia and english speaking entrepreneurs around the world can push it to 7 figure without problems so we reach our initial goal.
We’re good on the global vision but frankly for now we suck at being precise enough to target specific entrepreneurs. More work to do on that area in the future.
4. Can you realistically sell to your market ?
Let’s do a quick check if this market is really a good idea (i’m using the Disciplined Entrepreneurship : 24 steps to a successful startups‘s approach here of how to do market segmentation) :
- Targeting people with money ? Yes
- Accessible to a sales force ? Yes
- They have a real reason to buy ? Yes : these people are in business so they have potential to spend money on getting their business to grow more. Now we definitely could work this more in detail to get a better target profile : maybe people who’ve had some sales going down last year if that makes sense. Maybe remove people in the industry and concentrate on service, and maybe target people with an online presence. But we have a base there.
- Can we deliver products to help them grow ? Yep.
- Competition level ? Fierce ! But I think we have good assets.
- Is it possible to leverage additional segments ? Totally, there’s a lot of opportunities to grow and sell products. SEO would be one, SEM, etc.
- Is the market consistent with the values / passions of the founders ? Yep, for me it’s passion.
There’s definitely a lot of work to be done to get a more precise user profile and segment things well enough, so I’ll add this to my todo list :
- Find out precisely who is reading the blog (apart from close friends 😉
- Build audience segmentation so I know who to talk to and what at their pain points
Fifth question : how do you make money ?
The SMA business model is pretty simple and keeps a low cost profile which I suggest you take if you’re new to entrepreneurship :
- Step 1 : spend a lot of time writing good content and promoting it
- Step 2 : build a big user base
- Step 3 : monetize
So most of the cost here is time, since it’ll cost me a lot of time to do the writings.
Here are my current spendings.
Here are the spendings I made so far for the blog :
- Logo $39.99 I ended up not using it – maybe i will someday
- WordPress theme : $51
- Hosting : $99 per month
- SEO software : $990/year + $599/year
- Domain name 14.8€/year
- Lead capture : 110€
- Aweber : 69€/month
Here’s what I’m planing to spend :
- Another SEO software – $1000/year
- Getting some help to write content and/or promote the blog : $5000/year
- And currently i’m thinking about creating a software that will popularize the blog : $5000
My main target is to get enough trafic to get 300 to 400 emails per day. From experience, this will allow me to monetize the audience around $100.000 per month.
Our business plan sample – last words
I hope this business plan sample helped you ! Putting everything on the table for SMA hopefully raised a few good questions. I hope it’ll help you to avoid my own very costy mistakes (ouch, I lost so much time and money…).
Write a quick comment to tell me what’s your biggest take from this article ! What lessons you got from it.