Do you get frustrated because you don’t know where to start when it comes to getting started with your side business? Well, there is a solution to help you answer all those questions you have.
A business plan can help you map out your entire side business and understand what you need to do in order to operate a profitable side business. From the marketing strategy to seeing how you’re different from competitors, learn how a business plan will help you with your side business.
Table of Contents
What we will cover
I’m going to be diving right into how a business plan will help you with your side business and how it will ultimately help you get started and reach those goals of generating that second income. So if you’re ready, let’s jump right in.
What is a business plan?
So to make sure we’re all on the same page to start here, what is a business plan? Well, a business plan is a document that’s going to outline and go into detail of every part of your side business.
It’s going to detail your marketing strategy, your financial and cost structures, the key activities you need to do the operational strategies and maybe some of your competitor analysis to understand the competitive landscape. It’s really going to detail all the aspects of your business.
So you really have a full understanding of the business, the industry, your competitors and what’s it going to take to reach your business goals that you’ve set out for your side business.
Ultimately, it’s a super important document that often gets overlooked and often gets a lot of negative feedback from entrepreneurs and other business owners as it can be quite time intensive to create.
I strongly believe if you take the time to develop that business plan down the road, three to six to 12 months later when you’re not sure what to do or you need to re-evaluate your strategies to see if you’re making the progress you’re meant to be making, you can always go back to the business plan. Look at what you first set out and see if you’ve reached those goals or if you need to fine tune your business plan further and adjust going forward.
I briefly touched on how the business plan can help your side business, but let’s dive into this further so you have a full understanding of how it works and how it’s really going to help your side business.
First, I want to touch on the marketing strategy. While your business plan is going to cover a lot of sections that we’re going to cover here, the marketing strategy will be key for gaining new customers into your side business and we’ll be something you’ll want to be doing constantly in order to have that lead generation and a constant flow of new clients coming in the door.
If you’re not sure what you need to do for your marketing, well building out this side of the business plan is really important. You see, once you’ve developed your marketing strategy with your business plan, if you run out of clients or you need to work on getting your first few clients or building up more, you can refer to your marketing strategy and see what are the key activities you need to do.
Outline key marketing channels
Your business plan will outline the key marketing channels that you’ll go down in order to reach your target customer. For instance, if you’re operating an online business, this could be SEO. It could be social media. It could be referrals from other Web sites thats pointing to you.
Depending on what the type of business you have, you’re going to have different marketing channels. Similarly, if you have an event target strategy, you’re going to be hosting or going to events in order to meet your target customer and in order to potentially work with them and propose your services.
If you’re unsure of what you need to do to reach that target market, you can refer to the marketing strategy in order for what you need to do to get those new leads and clients.
Operational plan and strategy
And the second and one of the most important parts of your business plan will be the operational section and the operational plan.
The operational plan is going to outline what kind of things you need to do in order to operate your side business. It’s going to outline your service offering and how you work with your client.
How you’ll get leads
For instance, if you have a dog walking service, it’s going to outline the steps you need to take in order to work with that client. The first step will be marketing your services towards those target markets. Second, what happens when someone’s interested? Are they going to come to your website or are they going to phone and contact you directly from a mail ad?
You’ll need to understand these things as it will dictate sort of the operations of your business.
If you’re operating it all online, a key part of your operational strategy will be having a Web site that has all the information needed. If you’re posting flyers, you’re going to make sure your operational strategy has that labeled there, that you’ll be posting flyers in these demographic areas and people will contact you through phone or email, so you know how to operate your lead generation strategy.
How you’re offering services
Next, it’s going to detail how you’re offering those services to clients. If it’s just a one-off fee, they pay you in the beginning, you perform the services, return any materials or anything else you’ve borrowed from them, and then you finish up with the client and that’s it. Well, you need to detail that in your operations plan.
This will give you a clear road map and guideline for what you need to do in order to market your business, use your services in order to add value to someone. And finally, finish up with the client and receive payments.
The operational plan is key for your side business, as if you’re someone who doesn’t know what to do when they get home from their 9:00 to 5:00 and you need that extra direction while you can refer to your business plan and the operational section of your business plan.
And it’s going to detail what you need to do when you’re working with a client, when you need more clients, or when you just want to work on some of the other aspects of your business in order for it to operate properly.
Cost and revenue assumptions
The next piece and how this is really going to help your side business is using the cost and revenue assumptions and projections within the business plan.
Now it’s really really important you have a solid understanding of the numbers in your side business, especially the cost structures and the revenues coming in.
If you have no clue the startup costs or the ongoing costs it’s going to take to run the side business and you’re not sure how much revenue you could ever bring in, well, that’s just a recipe for a disaster and it’s a recipe for you to constantly spend money and time on a side business with potentially seeing no return.
Which is really not what we’re aiming here for, guys.
We want to generate a side business that’s has potential to make us a second income and that can cover its expenses.
Will you be bringing in enough revenue?
As you’re building your business plan, you’re going to detail out how much, you know, this side business could cost to start and operate. And then you’ll look at the revenue projections and see, will these potential revenue projections meet and exceed the potential costs?
Determine if you need to change things
If you find that the costs are way too high and the revenue projections are way too low, even though these are estimates, you may want to go back to the drawing board and consider changing the business model, consider changing the pricing, or maybe even consider changing the side business idea altogether.
We want a side business that we can run that’s eventually going to bring us a second income and that is actual profits and not just revenues being eaten up by all these expenses.
And so the whole point of having these costs and revenue assumptions and detailing out in this business plan is so we can actually go and six months to 12 months down the road, we reflect on these projections and see if what we’re doing in our operational strategy or marketing strategy,etc, is actually working.
For instance, if you see six months down the road and you’ve blown your revenue projections out of the water, then you can actually go back and revisit your marketing strategy and say, hey, this is something that’s really working. I’m going to spend more time on this here.
Similarly, if you have a side business and you’re not meeting those revenue expectations and you’re still constantly spending money, you can go back to your marketing strategy and see if that’s really the right way to reach your target market. Maybe there’s a more efficient way to reach people that will build a better relationship in order to get them to buy. Or maybe you need to go into your operational plan and see maybe there’s an aspect of your service offering that isn’t hitting right with their target market. So you may need to adjust that.
But you can see. knowing your revenue and cost structure will give you a road map six, even three, six, 12 months down the road and you’ll be able to look back on your business plan in order to determine if you need to keep going or if you need to change things up.
And this will really help you have a road map and strategy going forward as you don’t need to be scratching your head thinking,
- Is this the right strategy?
- Could I be spending my time better elsewhere, etc.?
If you’re unsure of where your side business sits among all the competitors, or if you’re unsure where it sits within the industry, the business plan will help you answer that in the market analysis section.
Usually in every business plan, you’ll have a market or industry or sector analysis that really dives into the industry, detailing:
- Who your competitors are,
- What their unique differentiation is like,
- How they’re different from each other,
- What are their product or service offerings,
- What are their price levels and where they sort of positioned in the market unique to you.
This is really good for you to understand because you need to know where your side business is unique and differentiated from all the competitors within that landscape.
Determine how you are different
If you don’t do this, when someone comes up to you ask, so how are you different than this or how are you different than X, Y, Z? If you don’t have a straight answer, you may sound unconfident and that person may actually go to your competitors. Whereas if you’ve done the analysis, you understand how your business is exactly different, then when someone comes and talks to you, you can actually play to that and let them know how you’re different.
And who knows, they may actually be looking for that difference because they may have worked with a competitor in the past and didn’t like the results or they really value the way you’re positioning your business and operating it, etc. Knowing where you stand out in the market and what your market and your competition is doing is super important.
Determine what to price your services at
Also, the market analysis lets you determine what are your service offerings going to be as well as the pricing. For instance, if you’re offering less value than one of your competitors, it doesn’t make sense to price at a much higher price point unless you have something that will just blow your customer away. This is usually not the case.
How to raise your prices
If you want to have that higher priced ticket item and you notice among your competitors that they’re offering these certain levels of service, you’re going to have to go above and beyond. Get creative on how you can add more value, how you can help your customer further in order to charge a higher price point in a way that makes sense among the market. It will really help you understand everyone else there, how your business is unique, and I think, guys, it’s going to really give you confidence in knowing that you can have a unique differentiator among your competitors.
So you can just focus on your side business and helping people the way you want to help them.
Strategy and implementation plan
The next part of your business plan for your side business is going to be the strategy and implementation plan. Now, this is a super important part of your business plan as it’s going to really answer some of the key questions that you’ve been so frustrated with.
I know a lot of you guys who are starting your side business, you get really frustrated about
- How do you get started?
- What do you need to do?
- What do you do after your day job or before you go to work in order to build this business up?
- In order to make sure it’s something you want to run?
- In order to make sure people will pay for it, etc.?
There are so many questions about how to get started. And really your strategy and implementation road map will answer all those questions and it’s going to tie in all the other previous sections of the business plan we talked about.
Outlines when things will get done
For instance, it’s going to outline when you need to build that minimum viable service or the core service that you’re offering to your clients. And when, well, what that timeline be and what will the date be for that? For instance, when will you have section 1 or stage one of your service built? Section 2 or Stage 2, etc.? It’s also going to detail when and how you’re going to be setting up, you know, implementing those marketing strategies we talked about before. Will it, for instance, if you’re running an online business, connecting with certain target markets through Facebook groups may be a marketing channel that you’ve identified. If that’s the case, you want to outline in your strategy an implementation road map, when and how you’re reaching these people through the Facebook group so you’ve budgeted the time and you’ve made sure you’re actually taking some step forward in order to engage with those people.
It ties your whole business plan and company together
It comes full circle and you can always check back to your strategy and road map six months or 12 months down the road to see if the strategies and the things you’ve been doing and working on your business have actually generated that revenue for your side business. The business plan works all together and it’s a working document that’s really going to guide you down the road for your side business.
Not sure what to do? Refer to your business plan
If you’re unsure what you need to do in order to get clients, you can refer to your implementation plan about some of the marketing activities you need to do.
If you’re unsure if your service offering is built out, well, you can refer to your strategy implementation road map and revisit the areas where you’ve listed, where you need to build out those specific areas of your service.
There’ll be no confusion when you get home from your 9:00 to 5:00 or if you want to work on your side business before you go to work. There’ll be no confusion about what you need to do because the strategy and road map will outline those things you need to do. And it’s really taking a part of your whole business plan. So, you have a full plan that’s structured well.
If you’re like me in the beginning, you felt frustrated, stuck, not sure where to go with your side business. I really recommend you develop a business plan for your side business.
And if you’re needing one on one help with this, I do have a coaching program where we ultimately help you develop the idea, execute and build that business plan and strategy. So you know what to do going forward. You can access the one on one coaching page by clicking here.