The short answer is “yes.”
But it doesn’t need to be a novel. You should simply view it as a guide or a roadmap for your business – one that will change as conditions change.
As you begin, the actual act of writing out your business plan will help you map out expectations, forecast your financials, and develop a framework for how the business will operate and grow.
To help you get started, here are some basic sections to includes yours:
1. Company Description
This doesn’t need to be lengthy. It should simply cover who you are, what you do, and what makes you different.
One way to differentiate yourself is through your value proposition. “Value proposition” is just a fancy term for the reason – or reasons – why a buyer would choose you over your competition. If you’re not sure where to start when crafting yours, read our post about The #1 Secret to Creating a Killer Value Proposition.
Another way to differentiate yourself is by creating some guiding principles for your business – i.e. things you believe in. Guiding principles can be anything from educating clients by sharing knowledge with them, to living by the Golden Rule, to focusing on continuous improvement. The question is: what’s important to you?
If you’re independent, you can skip the executive summary portion of this section. These summaries are typically used when trying to secure funding.
2. Market Analysis
To set yourself apart, you need to know a) who your competition is and b) what they’re offering to clients in terms of services and value.
To find out, conduct a local search to identify consultants in your area or industry. Check out their websites to learn more about each. Also, engage the local businesses community (e.g. your chamber of commerce or the local chapter of the Project Management Institute) to find out who’s practicing. You can also use sites like IMCusa.org to identify practicing consultants.
3. Organization and Management
If you’re independent, this section should cover your company’s organizational structure, as well as the management activities (like admin and operational tasks) you need to keep track of. However, if there are a few principals, it’s a good idea to go deeper and set the level of responsibilities between partners. This helps avoid redundancies and prevents things from falls through the cracks.
4. Services Offered
Once you’ve developed a value prop for your consulting business, create one for each of your services. The message shouldn’t focus on methodology; it needs to focus on why a buyer should choose you for that particular service. If writing multiple value props is too much to tackle at this point, then simply craft a combined “services” value prop and aim to articulate individual ones over time.
5. Marketing & Sales
Set some short-term revenue targets and goals for brand awareness. Keep in mind that, at first, you’re just trying to get your buyers to know who you are. Once that’s accomplished, you can set your sights on achieving long-term goals – like extending brand awareness, acquiring market share and positioning yourself within a niche.
6. Financial Projections
At this point, the financials are difficult to predict because you’re dealing with so many unknowns about your business. So instead of spinning your wheels on endless scenarios, think about how much you’d like to earn each year and work backwards from there.
So, say you want to earn $75,000. You need to think about how much you need to bill, how many projects you need to take on, and what your budget is for administrative costs.
You’ll also need to figure out an hourly rate and an average fixed price engagement. When determining the latter, identify a few possible scenarios. For instance, if you’re an HR consultant helping clients improve retention, the value of the service you provide will be different depending on if the client company has 100 employees or 10,000 – so charge accordingly.
Your business plan should be a living document, not a book report. So review, re-evaluate, and modify yours every six months or so. And if you need more help in the process, check out the Small Business Administration’s resource on writing business plans.