Opinions

Start-ups: A Good Plan Pays Dividends When Starting A Business

Starting a business is a complicated process, so it pays to break it down into simple, digestible chunks.

Share this article

Share this article

Starting a business is a complicated process, so it pays to break it down into simple, digestible chunks.

Opinions

Start-ups: A Good Plan Pays Dividends When Starting A Business

Starting a business is a complicated process, so it pays to break it down into simple, digestible chunks.

Share this article

Willpower alone will not get you to wherever you want to be. You need a plan. Without planning the ascent on your personal Mount Everest your chances of success are little better than they are of winning the lottery.

Making the right plan starts with defining the right goals. Setting a goal for the plan is about setting a goal that is reasonable and achievable. In other words it has to be practical.

If you have an itch to run your own business, in order to make this a reality, we need to get down to measurable specifics – e.g. to set up an organic farm shop in nine months’ time.

Planning

Having successfully defined the goal we need a plan.

The plan will:

i) break down the journey into bite-size achievable parts and

ii) provide a critical path.

Chunk it down

This is critical. Viewed in its entirety the journey from talking to doing can appear so overwhelming that it is paralyzing.

By examining the constituent parts of the whole the project becomes less intimidating; it allows you to focus your energy on the right elements and to do it in the right order.

And you can be sure that whatever your plan is it will be sorely tested as soon as it faces the intervention of real life. This isn’t to say that there’s no point having a plan but that your plan may have to be adapted from time to time once you start implementing it.

business plan

For clarity, break it down into bite-sized chunks

Chunking is a way of breaking down larger goals into more realistically achievable steps. By creating a series of realistic mini goals to achieve, you can also feel a continual sense of achievement, which in turn, will spur you on further.

Here’s what to do:

1.      Write down what, specifically, your goal is. For example, your goal might be “To open a barber’s”.

2.      Break this goal into key steps you would need to take to achieve your goal. In this case:

  •          Arrange finance
  •          Find suitable premises
  •          Fit out the premises with equipment
  •          Employ staff
  •          Advertising and Marketing

3.      Next, break down these goals into smaller goals and tasks. Write down all you can think you will need to do to achieve these tasks /goals. No need to think about what order you will do these tasks, just write them all down.

4.      With each of these smaller goals, break them down into even smaller tasks and goals. Each time you do this you are creating manageable tasks.

The Critical Path

This is a project management term used in business to describe the sequence of events that a team must follow in order to deliver a goal in a certain time. If one event is delayed by a day, the whole project will be delayed by a day.

For our purposes the critical path simply means you need to work out in what order your chunks of work have to be completed to get the result you want.

critical path

Your critical path will help to order the business of starting up

Create your critical path

You’ll have identified all the smaller tasks, activities and goals in the previous “Chunk it down now” activity. Now you can create a “critical path”. Here’s how:

1.      Estimate how long each step will take. What’s the least and most amount of time that each step might take?

2.      Which activities are “critical”, meaning that they have to be done on time or else the whole project will take longer? For example, with the barbers, the plumbing has to be installed in the time allotted for it otherwise it will delay all other activities.

3.      Which steps are dependent on other steps being completed first? For example, with the barbers, the fixtures and fittings can’t be installed until the premises are decorated but decoration can’t take place till the plumbing is completed. So, the plumbing is “critical”. If it’s delayed for a day, a week, a month etc it will delay achievement of the whole project for – a day, week etc.

4.      Which steps and tasks can be delayed, if necessary, without seriously delaying achievement of the main goal?

5.      Which steps are not dependent on other steps happening first; can be taken at any time or at the same time as other steps?

6.      Now write out all the steps that need to happen for another task to begin. Add in all the other steps where appropriate.

You now have a logical list and plan to guide you.

coffee shop

Location is important for a successful coffee shop

So what does an actual critical path look like? Well, let’s say you want to open up an organic cafe but you’re currently working in, say, HR. Your “critical path” would begin with research and planning – all of which will be done in your “spare time” and here’s what that path might look like:

Location: where are you going to open up this organic cafe? A city centre will be a lot more expensive than by the coast. So is this part of a whole life change or just a business one?

Cost: how much is it going to cost you? Are you leasing or buying the premises? How many staff will you need? Will you need to invest in equipment or furniture? How much stock will you need to buy? How much are you going to charge for your food? What profit margins will you need to make a profit?

Business plan: once you have a good idea of costs, you can start on a business plan. Without one would be like crossing the seas without a compass. Not a very clever idea.

Raise money: now you’ve decided on a location, have figured out how much it will all cost you, how to make a profit and how much cash reserves you need to get there…you need to figure out where you are going to get that cash from. You might choose to use your savings or draw down equity from your home. You may downsize or take out a loan. You may even do a combination of all the above.

Jump: once you’ve got your finance in place, you’re ready to …jump!

Simply put, you need to know the steps you need to take and in what order to take them in order to get there. Once you’ve got that, your chances of success increase exponentially.

This article is based on Stop Talking, Start Doing Action Book: Practical tools and exercises to give you a kick in the pants by Shaa Wasmund (published by Capstone).

Related Articles
Get news to your inbox

Start-ups: A Good Plan Pays Dividends When Starting A Business

Share this article