Chronicles of a New Business: Planning

Since this blog is being done primarily as a marketing piece for my new business venture, it seems fitting that I start a series about that venture. First, I will discuss the planning of the business. This has been going on for quite a while. Four months to be exact. At the end of April this year, I took my family out to Denver to visit my sister. At that point, I was pretty drained. Busy season had a lot of good moments, but there were also a lot of moments that made me realize this change was needed. I took this vacation as a chance to step completely away and enjoy the more important parts of life, most notably my family. After the trip, I launched fully into planning mode.

My first order of business was to put together a personal cash flow analysis. This is a backward calculation that starts at zero and goes all the way back up to the cash I need to bring in to make my lifestyle work. The key to this was being honest with myself and being conservative. The worst spot I could see myself getting into was budgeting for a $100 monthly electric bill and it actually being $150. $50 off doesn't seem like much, but 50% off can be a real issue for your overall budget. This first step took maybe six hours. But over the next four months, I would put much more time into it.

The next part of my business plan was a business cash flow budget. This was a lot of fun, at least at first. I started by deciding how I would bill, and at what rates. I took that and created seven different "types" of clients that I feel best represented my client base. From there, I needed to come up with goals for how many of each type of client I would work with each month. Once this was determined, I had to project collections. This is the most important step of the cash flow budget. Let's be honest, spending money is easy, and billing clients isn't too hard either. Getting them to pay is always the trick. Again, I was conservative and spaced out my collections pretty well. I then filled in the expenses. At this point, I did a little research into software costs, licensing fees, legal costs, etc. This was a helpful task because it got me thinking about running a business as well. In looking at the two budgets together, I now had a good picture of how my savings would be affected by this new venture. This isn't something I wanted to think about mind you, but again, very important.

The next thing to plan had to be marketing. Marketing is not my strong suit, so an effective plan was imperative. I decided there were four areas for me to target. The first was referral sources. I listed the names of all the bankers, financial planners, lawyers, realtors, etc. that I knew and their contact information. I am a big proponent of referring people who will best serve each particular client. I also understand that not everyone can work together. Knowing this, I felt it was a good idea to have three to five people in all areas of service. I began organizing my list this way, noting differences that I felt would be important to my clients. The list became my initial call list for my first week. The second area I focused on was associations or groups I wanted to work with. This includes Chambers of Commerce, Professional Associations, Business Incubators, clubs, etc. I began looking around Indianapolis at organizations I could become involved with, and discovered it was incredibly easy to find groups I was interested in. It just took a little desire. The third area I aimed at was current clients. My first week, I wrote a letter to the clients I would retain through the transition from my old firm. I created another call list that I would also go through the first week. This contact with my clients would be to introduce them to my new firm, as well as kindly request that they give my name to anyone who may need accounting or tax planning and preparation help. The fourth and last area to attack was prospective clients. No one wants to cold call, but someone starting up his own business can't pick and choose. For my own comfort level, I wanted to have an organized plan to execute. So I picked a few industries I have a strong background with, and a few local areas I am familiar with, and began looking for clients I could market to who fit both criteria. I then came up with a short summary of what I do with my clients in each specific industry and something about my ties to their particular area. I intended to physically bring these to the prospective clients I had found. I'm still not 100% comfortable with marketing, but I definitely feel better about it with a plan.

The next step was to decide on a location(s), technology, legal structure, internet presence, and the most important part of the whole plan. This will take a while, so I will cover this all in my next post.