Friday, March 22, 2013

Your Little Business Plan

The first topic I'd like to tackle in my Etsy 101 series is the benefit of having a business plan.  Let me preface this discussion by saying that I did not have a business plan when I started my shop... and it showed.  I ran my business with an if-it-feels-good-do-it mentality.  What can I say?  I was a liberal arts major in college and I never took a business class.  My plan for my etsy shop looked something like this:

1.  Make buttons
2.  ???
3.  Profit

See that step number two, with all the question marks?  That is the spot where your business plan goes.

If you run the words "business plan" through google, you are going to get a lot of information on how to write a formal business plan.  And if that's what you want to do, go for it!  It certainly wouldn't be a waste of time.  But, personally, I think a 10-page, 16-part business plan is overkill for a little etsy shop.  So, I'm going to tell you how to write a little business plan.

There are three major components to your little business plan.

The first, and most important, component is your Mission Statement.  To write your mission statement, just ask yourself the question: "why am I doing this?"  Is your primary motivation just that you like making stuff and you need a way to unload everything you create?  Or are you in it for profit?  If so, how much profit?  For many etsy sellers, the goal is just to create a self-sustaining hobby.  For others, the goal is to be a professional artist and to make a living by selling your wares.  For most, it is probably somewhere in between.

The next part of your business plan is pretty easy.  What are you selling?  That's your Product.  Consider what you are selling both literally (hand-knit cashmere scarves) and figuratively (warmth, luxury, beauty, etc.)

Finally, you need to figure out where is your Market.  Who is going to buy your stuff?  If you sell baby clothes, your market is probably going to be new mothers.  Try to get as specific as you can when you are defining your market.

And that's it.  That's really all you need for your little business plan.  Just consult these three components whenever you have to make a business decision and you'll be on the right path.

4 comments:

  1. Mission statement, the product and the market? That’s quite a good business plan summary, Pepper! It’s simple and direct, which can help you point out things to help you achieve your goals. However, if you’re going to ask me, I think you can include your financial standpoint. That is to secure your target ROI, and to let you know if your business is running smoothly.

    Cameron Scott

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    Replies
    1. Great point Cameron! Setting financial goals assessing financial realities is definitely an important part of a little business plan.

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  2. This is a must-read! The initial steps of building up a business is very critical, because of all the elements you have to do before you can actually run the business needs to be taken care of at this point. But with this summary, every business owner and aspiring ones will have an idea on which steps to take first and focus on, as well as do an effective business plan for themselves. Completing this will surely be the key to their success. Cheers!

    Eric Rotkow @ Coffee + Dunn

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  3. Two of the most important parts in a business plan is the product and promotion. While they are the real concern on putting up the business, it’s also important to consider the financial factor. The money is what will be used to operate the business. Therefore, it makes sense to set some target sales in a specific time frame.

    Mitchell Carlson @ Insure Your Company

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