Creating a Plan

We're almost done. 0:00 Now I've covered all the working parts of my business model. 0:02 So let's look at how that translates into money. 0:04 As I mentioned in the previous videos, I can easily obtain our costs by looking at 0:07 the key resources, activities and partnerships. 0:12 And since I've already completed that, this should be fairly easy. 0:16 My start-up costs are going to be the hardware, initial software and 0:19 any other setup costs. 0:23 If I want to be official and 0:25 create a company early on, I'm going to have those legal costs as well. 0:27 I will also have ongoing costs for subscriptions that I pay for. 0:31 As well as occasional costs, like attending conferences, or 0:34 my educational activities and even paying an accountant during tax time. 0:37 Listing out all these costs helps me understand my base expenses and 0:42 the kind of revenue that I need to bring in. 0:46 The last part of my business model is my revenue. 0:49 Now that I understand my value proposition better, 0:52 I have a better picture of how to maximize my revenue streams. 0:55 Going into this my thought was, well yeah, I'll charge a client, you know, revenue. 0:59 Obviously I'll just, you know, get the money from them the one time. 1:03 But now the plan is, 1:07 for each client I start with a fixed price point that's product feature dependent. 1:08 Since I'm targeting a market that doesn't really know how to maintain their site or 1:14 resolve their problems when they occur, I can charge a recurring fixed payment for 1:18 maintenance, hosting and any other services. 1:22 Finally, I can gain additional revenue from each customer by up-selling. 1:25 Well, that about covers it. 1:31 Let's put this information down in a better format that suits our 1:33 purposes more. 1:37 To use this as an internal reference, I'm going to keep it as a mind map, 1:38 which is this diagram I've been drawing all along. 1:42 If this is something you'd like to do, 1:45 there's a lot of great free mind mapping software out there. 1:47 If I want to use this for business considerations, 1:51 I can put together a more formal document that goes somewhat like this. 1:53 I'll start with a summary. 1:58 In this section, I'm going to list the profile of my company, general overview, 2:00 you know, name, purpose, legal status, and so on. 2:03 I can also include what I have already achieved, 2:08 any clients that I have worked with, and so on. 2:10 Most business plans then follow with an industry or market analysis. 2:12 Here's where you list your market size, your competitors and trends. 2:17 This information is very important, 2:22 because it shows that you understand your playing field. 2:23 For this example, it's kind of hard to get that information. 2:27 But if this were anything other than a freelance business, 2:30 you should be spending a bit of time gathering all this information. 2:33 Not only does it arm you when going into business, 2:36 you'll also gain an understanding of what already works, 2:40 what are existing sales avenues, and revenue models. 2:43 It's important to know what companies before you have tried. 2:46 Sometimes, this section is broken down to industry and competitor analysis. 2:50 It's up to you. 2:55 I tend to put them together, 2:56 since your competitors are part of your industry anyway. 2:58 Next up, is the customer analysis. 3:01 This section indicates that you have done all your research about your customer. 3:04 I did that, so I'm just going to list it out. 3:09 I'm gonna list out my target customers, their demographic information, and 3:11 the needs of a typical customer. 3:15 All the information I went over when I explored my customer segments. 3:18 The next big section is our marketing plan. 3:23 This is where we describe our brand, how we get our customers to 3:26 know about our product and service, and how we distribute it to them. 3:29 The information for this section comes straight from two sections of 3:34 the business model, our channels and our customer relationships. 3:37 Like we just talked about, my channels are very traditional. 3:42 So I'm going to rely on a few ads, word-of-mouth, and a lot of networking. 3:46 Evaluation, purchase, and distribution happen directly with 3:50 the customer since the relationship is a one-to-one. 3:54 I'm going over all this briefly, because I detailed it earlier. 3:57 But you should be writing out each of these points in as much detail as 4:01 possible when putting together your formal plans. 4:04 Next up is our operations plan. 4:08 This section goes over the key operational processes that 4:10 the company needs to undertake to ensure success. 4:14 In simpler terms, that's our list of key activities. 4:17 It sounds too complicated to call the activities of my freelance business 4:20 an operations plan. 4:24 So I'm just going to say key activities in my plan. 4:25 Remember, a business plan doesn't have to adhere super strictly to any format, for 4:28 such simple uses. 4:33 Now, we can also break this information down into primary and 4:34 secondary activities, if we need. 4:37 Lastly, we're going to include our financial plan. 4:40 This includes the revenue model that we discussed. 4:43 As well as the associated cost structures. 4:45 Business plans seem like they're designed for more complicated ventures. 4:49 But as you can see, we can modify it to suit our needs. 4:52 The goal in this exercise wasn't the format for the final product, but 4:55 to show you that running through the business model is the more important part. 5:00 Once you know how all the working parts fit together, 5:04 it's simple to put that down on paper in multiple formats. 5:07 My personal favorite is the mind map. 5:11 It helps me keep an eye on the big picture and it's really simple to implement. 5:13 I hope that the exercise helped you understand how to 5:18 create your own business plans, regardless of what you're getting into. 5:20 Good luck with creating your own. 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