planning – Page 6 – Michele Christensen

Strategic thinking for the 1-person business

Solopreneurs need strategy as much as big businesses do

One of the skills I use all the time in my business is strategic thinking. This sounds complicated, and in fact it’s one of the skills emphasized in MBA programs but there are certain parts of strategic thinking that scale perfectly for a solopreneur or small business.

You can start your strategic thinking by always asking and establishing why you are doing anything. Ideally, you should be asking this of every single task or activity you are thinking of doing. If you decide you’re going to start Tweeting, then why? What’s the purpose? How will it add to your bottom line?

Why do you have a website? What’s the purpose of your website? Why are you writing that particular blog post? When I first start working with a new client and we begin to ask these questions, it can be unnerving. It’s an entirely new way of thinking and running your business. We’re used to hearing an idea and doing it. That freedom is one of the joys of being a solopreneur, and our natural inclination to take action is one of the hallmarks of solopreneur success.

While I would never want to stifle those tendencies, we need to put the breaks on ever so slightly and establish why we are doing this new thing, how it fits into our plan for success and if in fact it’s worth it for our business. One of the least effective ways to manage your business is to jump from one bright shiny new activity to the next and keep cramming more and more activity into our business without having a plan for how it will help our success. It’s fine to have a few activities that aren’t absolutely pulling their weight in your business if you enjoy them, but having a day full of purposeless activity will lead to exhaustion, discouragement and lack of motivation. Your success will most certainly come from activity, but not just any activity – it has to be a carefully orchestrated mix of actions that work together in a strategic way.

The costs of doing business

Do you have a good handle on your costs of doing business? How much revenue do you need just to keep the doors open? How much in costs do you incur each time you sell something?

Lots of solopreneurs don’t have a solid grasp of their cost of business. So often, solopreneurs just want to help others and do what they love. They don’t want to know about or manage the business side of things. In fact, a lot of solopreneurs love their work so much they don’t even think of it as a business – they’d give their services away if they could.

The problem with this is that it doesn’t work. Not paying attention to the costs of business means you are operating in the dark and can’t make sound decisions. Many people start their solopreneur business thinking they just need to print a few business cards, put up a website and start doing their work. Word of mouth and the fact that the world needs their brilliance will handle the rest, right? Wrong.

You are as much as business owner and manager as you are a provider of whatever product or service you provide. You need to handle the business end of things in a manner that supports you and your work. Part of this is always having a handle on the costs of doing business. When I worked for big corporations, the budget was a huge ominous document that took months to prepare and was both revered and feared. I’m not suggesting you do that, but you can start by making a list of the costs of doing business that you incur just to open your doors. These costs are generally fixed, i.e. stable and predictable within the range of business volume you could expect in the near future.

Some examples of fixed costs could include:

web hosting
domain registration
phone and utility bills
rent
ongoing training you are investing in

It helps to know what costs of doing business you have each month so that you know how much you need to cover them. It’s the first step to understanding and managing the profitability of your solopreneur business.

You also incur costs that only happen when you generate revenue. These costs are variable and depend on how much you sell and may vary by product.

Have you ever tallied your costs of doing business? Were you surprised, either in a good way or a bad way?

Make use of holiday slow time, part 3

This is part 3 of a 3 part series. Click here for part 2.

The final idea I have to share about making use of a slow time in your business is to use the time to create processes and systems for things you do regularly. I’ve seen many business owners get caught up in reinventing the wheel for tasks they do all the time. My rule is this: the first time you do a repeating task, write down the steps you think you need to do in order to complete the task. As you do the work, adjust your list and add notes to help you next time. The second time you do it, work from your list and again improve it based on what you learned. By the third time, you should have a pretty solid process that continues to change over time as needed. The more you can systematize and document repeating tasks, the more efficient you’ll be at doing them. You’ll be less overwhelmed and it will be easier to start. Finally, if the time comes for you to hire some help, you’ll have a process in which to train the person not just an ill-defined result you want.

Don’t get stuck on making your processes perfect. Paper is fine to start with (and maybe for a long time after). Don’t worry too much about formatting or formality. This isn’t for your customers, it’s just to make you more efficient.

Here are some ideas on processes you might want to start with:

sorting and filing paperwork
bank, credit card and cash reconciliations
data entry
compiling your newsletter
cleaning and maintenance
opening and closing if applicable

Give it a try! Leave a comment if you have any other processes you can write up.

Is your business slow right now?

If so, you can use this time to help make 2011 a great year. By getting ready now, you can hit the ground running on that first day back to work after the new year and not waste any time figuring out what to do. You’ll want to work on both your big picture plan and some detail items as well.

Here are some ideas to help you do some planning for 2011 right now:

If you haven’t done any planning for 2011, aim for a simple plan since it’s already December 16. Next year, you can start earlier and be more detailed and complex. Start by looking at a calendar (electronic or paper) and write in all the big events you already know about, including both personal and professional. Some ideas to get you started: holidays, birthdays, anniversaries, yearly family events, school events, community events, business events, medical issues and big personal projects like home improvement.

Knowing these events and date ranges ahead of time will help you know when you may be less available to work or simply less productive. Schedule your major business projects around these events. Look at what you want to accomplish in the year and set some time frames. Consider what projects need to be done before others. Look at how you can use yearly events in your marketing – think “back to school sale” or “summer seminar.” Make sure to schedule prep and marketing time before any events or products you launch.

Planning can be done on a much greater scale, but doing just this much should give you a good overview of the year. Knowing the order in which things are happening will help you prioritize what needs to be done first, and will help you know where you are in your yearly journey.

Along with planning, you’ll want to set some numerical targets for the projects you are planning. If you are doing a list-building project, how many new subscribers do you hope to gain? If you are doing some SEO or traffic building, what numbers would tell you you’ve been successful? You don’t always need specific numbers – sometimes just an idea or a direction will do. If you have 500 subscribers now and more than that after your list building project then you know it worked to some degree. If you’re trying to save time on something, the hours spent should be going down.

In my next post, I’ll tell you about how you can prepare your space and files for the new year.