In the second article of his series on starting a financial advice business, Rohan Sivajoti discusses business plans and why they're best kept short...
When starting your own show, having a business plan is the right thing, yeah? We can agree that having a plan makes sense and guides your decisions moving forward. If you're going directly authorised then part of your application to the regulator is a Business Plan, so in some senses it's mandatory.
I have an issue with business plans though. They're typically upwards of 15 pages and are perhaps filled with your best ideas, financials, strategies and all the rest - but how do you update them? How do you work with them on an ongoing basis?
They're brilliant to begin with but then they go and live in your top drawer or an online folder, and you might dig it out once a year to update.
The reality is your business will continue to evolve at a fast pace (especially early on) and plans need to change and be updated easily. Your big document becomes somewhat irrelevant very fast.
A few years back I spent some time in a business growth accelerator called Entrepreneurial Spark where I was introduced to the Business Model Canvas. It completely changed the way I plan for my business.
The concept is incredibly simple: keep the focus on nine key areas, on one page, and update regularly. The nine areas are:
Kay Partners - Who are they?
Key Activities - What key activities do our value propositions require?
Key Resources - What key resources do we need?
Value Propositions - What value are we delivering and what needs are we satisfying?
Customer Relationships - What type of relationship do each segment get?
Customer Segments - Who do we provide value to?
Channels - Through which channels will we work?
Revenue Streams - What and how do we earn money?
Cost Structure - Most important and biggest costs
Those nine areas are the key to creating a business model that is truly focused on the important parts of business. Furthermore, we were encouraged not to write on it and this makes perfect sense. By putting pen to paper, it confirms the notions to each box, and when something changes, which it will, you have to get the Tippex out.
Use post-it notes. Tear them up into small slices and populate with post-it notes. Keep it on the wall above or near your desk. Run your eyes over it at least once a week. That key partners section, are they getting enough love? Has your customer segment changed? Have you integrated a new service delivery channel?
What is on that one page, are the things that are important for your success. Pay attention to them, edit them, update them and nurture them. It's way better that half a tree sat collecting dust in your top drawer right? This is your new working document.
Rohan Sivajoti is director of Postcard Planning and director and head of Innovation at NextGen Planners
