Long term planning

JohnnyGoodyear

@Angie said:

@BlueGreenSpiral said:
I like that approach @Angie

The problem is I'm at the point where you say is the easy part. Putting everything down on paper in a professional manner is where I am struggling! I will need to predict the future while making sure I don't project too little or too much income. Either of these will cause problems in time when I have to show results to qualify for further assistance after year one.

Thanks again for the tips so far

Try going at it by not trying to find the right answer first. Come up with a list of 6 - 10 possible answers.

I do this all of the time with long term financial security planning - which I use to determine whether to activate a business project back-up plan. For example, addressing the question "do I have business funds to continue with my current business course, unmodified, with no add on projects." Break that down into micro questions:

Do I have enough savings and forecast income to do this for a week?
A month?
Three months?
Six months?
A year?
Two years?
Five years?
10 years?
20 years?
30 years?
40 years?

I don't have an exact answer - but 5 years ago the uncertainties started with the month/three/six month calculations and now the uncertainty point seems to fall between 25 years and 40 years.

So it sounds like you have to provide a one year growth forecast, and at the one year mark show results and provide another one year forecast - and there is benefit to arriving at the one year mark meeting with proof that your forecasts were sound.

On you mind map, gather this sort of data. Required expenses, nice to have expenses, rough timing for expenses, source of funds for expenses. Just dump it in piles on paper and arrange it into timelines later. Then add potential income sources, what's required before a source of income can become active, time lag that will occur between sale and payment, risk of non-payments, your time required to create product or provide services, method for customer discovery. You are basically fleshing out all of the business stuff that is built into your plan first, and then running scenarios with product pricing and customer purchase possibilities afterwards. And then it's the list again: what if 5 customers, 10, 20 100, 1000, 10,000.

When you are forecasting short term, high risk, you need to calculate across the range of possibilities to have a vision of what's possible, and operate based on low level estimates of success. I started my business plan based on calculations of 5 sales per established title per month - and that's the number I compared to personal savings to calculate what to expect. "What to expect" is also the benchmark for knowing if my business was performing adequately or if I needed to pull the plug and consider something else instead - and I had timed goals at three, six and 12 months.

I was fortunate and the business eventually soared to heights I could never imagine (see number 28 here https://www.amazon.com/gp/bestsellers/2015/books#2 achieved with no promotion, advertising or interviews. ) But the business planning, calculations and forecast always take the same form. Get everything dumped in a mind map, know what stuff is fixed expense, elective expense, modest and achievable sales, modest and achievable growth, required personal time commitment and sensible "what ifs" (what if I sell 10% more every month.)

Most people who require a business plan from you want a well though out plan and a reasonable estimate of risk and return on investment. In my case, I lucked out and a boom hit in a business area that I'd been studying for decades and been active in for about a year and a half pre-boom. But boom or not, I had a business plan in place with a 10 year modest growth forecast and a really clear idea of what it would take to reach a sensible business goal. A lot of business aspects are fully under your control - things like whether you plan to buy a new computer or slog it out with a hand me down. Whether I buy the nice pencils I like now at x $$$ per year or spend on Dollar store pencils supplemented with cheap give away pens from anyone who gives them away.

I think you'll have no problem getting a good plan together. Budget it doing it 3 or 4 times before you end up with one you trust, and dive in so you can get the wonky ones out of the way this weekend.

And keep in mind, you need to show someone a really good plan - not prove that you are psychic. A plan doesn't have to show just one likely outcome - go ahead and show three as long as you can explain relative likelihoods and risks.

Very generous post.

futureaztec

There is a whole segment of people who are productive oriented with regards to their output. Sometimes I find that they put out a lot of content, but it just doesn't have that magic dust. Myself, I am never able to submit university work that I don't wholeheartedly believe in. This means I cannot manage more than 3 classes at a time and have been known to disappear for weeks on end working on a topic. I don't make many friends this way and I tend not to be the "successful" type, but in the long term I seem to get things done and I don't have that transitory feeling of accomplishment that gives way to the mediocrity of what I actually produced a few weeks later. I imagine its a tradeoff.

Angie

Another useful business planning exercise is to binge watch Dragon's Den with an eye to identifying gaps and faults in the presented plans, and in the methods of presenting those plans. Then label the gap so you can view it generally. (Examples: Presenter doesn't know financial generals about high performers and average performers in his field. Or Presenter didn't physically prepare to climb stairs and present, or to stand and present. Presenter doesn't know common business financial terms like "gross revenue" "net earnings" "fixed and variable expenses" etc.)

Try to spot analogous gaps in your own plan and presentation prep.

Dragon's Den can serve as an overview to what type of competition you may have for funds, and what sorts of gaps and mistakes your client doesn't want to see.

Fun discussion this morning! It's nice to step back and look broadly at the project planning process. The only other thing I can think of at the moment is that once you have a fantastic business plan, you will find loads of volunteers who have "better" ideas about how you should run your own business. (See any developer thread here for examples, lol.) A solid plan is one that makes it readily apparent which alternative ideas should be considered, discarded or evaluated further for merit.

BlueGreenSpiral

Some serious wisdom in this thread!!
I'm thinking this one will help others who are in a similar situation

The tips from @Angie have been especially helpful and I will be catching up with links that others have shared tomorrow. My meeting is 4 weeks away so I'm going to be using the advice to organise the side businesses that I had to delete to fit in the funding application!

I didn't know we could put spoilers into posts here...Nice touch @Dubbylabby

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