Create a Successful Business Plan

You hate working for someone.

You don’t want a job and only have $120 left in the bank. You need revenue to pay the bills, but what should you do? You are uninterested in robbing banks or stealing from people, they pay well but have negative social stigmas.

If you aren’t a trust fund baby and want a legitimate endeavor, I suggest that you create a business. But every successful business needs a solid and functional plan.

A hobby is not a business

People often confuse businesses with hobbies. These are not the same. Hobbies are activities you do with no desire or interest to earn money. This is how the Internal Revenue Services describes a hobby:

A hobby is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

  • Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
  • Whether the time and effort you put into the activity indicate you intend to make it profitable.
  • Whether you depend on income from the activity for your livelihood.
  • Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
  • Whether you change your methods of operation in an attempt to improve profitability.
  • Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
  • Whether you were successful in making a profit in similar activities in the past.
  • Whether the activity makes a profit in some years and how much profit it makes.
  • Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

Most new businesses will fail, a sad yet true reality

Businesses aren’t get rich quick schemes. Most startups fail. According to the Small Business Administration, in 2016, 433,192 started and 399,923 closed. In addition, four out of five establishments that started in 2017 survived until 2018 (79.4%).

Do you need help starting your business?

Schedule a FREE consultation today!

Most new businesses will fail, a sad yet true reality

Businesses aren’t get rich quick schemes. Most startups fail. According to the Small Business Administration, in 2016, 433,192 started and 399,923 closed. In addition, four out of five establishments that started in 2017 survived until 2018 (79.4%).

You need more than talent to succeed, you need a plan

Success doesn’t happen overnight. You need a plan, a business plan. This plan requires time and effort. You can choose to pay for a business plan or copy an existing one, but you still need to find time to review it and make necessary edits.

A business plan needs to be organized with a sequence of activities. Here are steps to create a business plan.

  1. Identify your affinities and abilities.
  2. Identify a market need or opportunity that has a need for your abilities.
  3. Write a mission statement which explains how you will satisfy the market need.
  4. Write a vision statement which will accomplish the mission.
  5. Identify your target market location.
  6. Identify your preferred customers
  7. Research your competitors. What are they doing great? How can you differentiate yourself from others?
  8. Identify your business requirements, threats and obstacles.
  9. Create a business strategy, which lists actions that will help you accomplish your mission.
  10. Remove, mitigate or eliminate potential  threats or obstacles.
  11. Develop systems to manage the work.
  12. Identify needed resources (labor and supplies).
  13. Procure new resources (labor or supplies)
  14. Posture yourself as an industry expert.
  15. Educate yourself on how to scale the business.
  16. Assign company roles and responsibilities.
  17. Delegate and distribute work.
  18. Seek new work from client referrals.
  19. Improve the quality of your marketing and advertising.
  20. Research new opportunities or trend changes.

The Handyman 

You have reviewed the list and decided to become a handyman. You decide to create a handyman business plan. Please read my assumptions before reviewing the plan:

  • The owner is being financially supported (through savings or family) while the business is developing.
  • The owner will reinvest money received from the business to procure more resources (labor, supplies, and materials).
  • Once the business is proved viable, this business may need a line of credit to purchase more supplies and/or hire labor.

Handyman Business Plan

  1. You like to work outside and with your hands. You also have special training in home remodeling.
  2. You live in an aging neighborhood with a mix of young and old homeowners. The young residents are inexperienced with home maintenance and the older residents do not have the time nor energy to complete the work themselves.
  3. Your mission is for all homeowners to receive trustworthy home repair service within 48 hours.
  4. Your mission is to schedule an appointment request within 2-4 hours.
  5. The target market are homes within 20 miles of Austin, Texas.
  6. Your preferred customers are college educated homeowners who live in homes valued at least $450,000.
  7. HandyBro is the most prominent handyman company and has captured 70% of current market. You decide to offer services that HandyBro doesn’t offer his customers.
  8. Before you can start the business you need to get a handyman license, truck and buy supplies. The only know threats are rumors that HandyBro may try to discredit your business.
  9. You created “The handyman business strategy.” This plan includes how you will deal with any HandyBro smear campaigns and how you will get new business.
  10. To promote your company you hire a social media staff. They will create your new website and online ads.
  11. You discovered the “Handyman 3000” plan which helps you decide which purchases take priority.
  12. You create a budget to purchase equipment and hire labor.
  13. You identify where you can purchase bathroom supplies at a bulk rate. Also, your buddy Randy is available to install and repair plumbing.
  14. Most homeowners don’t know that a roof has a lifespan of 7-10 years. You create educational material on this and other homeownership issues.
  15. You read books on the handyman business and attend handyman conferences.
  16. There are too many things to do in the handyman business. You assign roles and responsibilities so that nothing is neglected. You also draft instructions on how to complete the work.
  17. In the beginning, you will occupy many roles but eventually you’re able to hire new people who can take on your old roles. These people will use the instructions you wrote.
  18. You offer discounts for new clients and initiate a client referral program.
  19. You work with your social media staff to create a Facebook campaign, which includes videos and sophisticated marketing funnel.
  20. At the latest National Handyman convention, you discover that more homeowners wish to learn about home maintenance. You decide to capitalize on this by offering online courses.

Expect a long and arduous journey, get help when necessary

Creating a business is not easy to do. Do not be too quick to go through this process, work through each step carefully. Take an administration day if you need the time.

Systems and processes cannot be created in a vacuum. When you are ready to scale operations, seek professionals like myself whom specialize in administration.

For future study, I highly recommend reading “The E Myth” by Michael Gerber.

Above all else, remember this: You are the captain of your business. Do not let anyone try to convince you on how to manage your business. You decide who you will help, which products or services to sell, and how you choose to sell them. No one can make these decisions for you.

Sources

IRS hobby: https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

SBA Small Business FAQ: https://www.sba.gov/sites/default/files/advocacy/Frequently-Asked-Questions-Small-Business-2018.pdf

Do you need help starting your business?

Schedule a FREE consultation today!

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