A business plan is a very important and strategic tool that helps business owners, like us, not only focus on the specific steps necessary to make business ideas succeed, but it also helps us to achieve short-term and long-term objectives.
When I meet with independent consultant business owners like you, one of the questions I ask them is, “tell me about your business plan?”
How do they answer? It’s very common, whether it’s someone who’s been an independent consultant for six months or six years, for them to look at me like a deer in the headlights and admit that they don’t have a business plan.
And I get it because I’ve been that business owner too….the business owner without a specific business plan.
That’s why in this episode I’m sharing a really simple way for you to create an effective business plan for your independent consulting business. This approach to the business plan will ensure you’re crystal clear on the results you want to create and that you have a simple, yet powerful way to achieve those results.
I call it the Bottom-Up IC Business Plan and it has four components. The first is defining the type of work you want to be doing. The second is aligning your ideal schedule. The third is aligning your plan to your financial goals, and the fourth is defining who you need to become in order to hit your plan. Note that these components are in this very specific order on purpose. I’m going to walk you through each of these four in detail and explain why. Let’s dive in!
- [00:35] An overview of today’s topic
- [01:22] Who this episode is for
- [02:17] What is a business plan
- [05:30] The four components of your bottom-up IC business plan
- [07:46] Defining the type of work that you want to be doing
- [11:01] Aligning your ideal schedule
- [12:51] Aligning your plans to your financial goals
- [16:19] Defining who you need to become in order to hit your plan
- [20:15] Traps to avoid when creating your business plan
- [22:23] Ready for help figuring out how to apply these strategies in your IC business?
- I invite you to book a Strategy Consultation call with me.
- On this call, we’ll dive into your business, get clear on your goals and challenges and determine an action plan for you so that you can create the business impact, income, and flexibility that you desire.
- To book yours, please visit https://www.consultmelisa.com
MENTIONED IN THIS EPISODE —
- Take the IC Business Plan Assessment: https://www.icbizeval.com
- Episode 058 – Consulting Margins
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FULL TRANSCRIPT
**note: This is an automated transcript, so please ignore spelling errors and grammar mistakes*
00:34
Welcome to the podcast, I can’t wait to share today’s episode with you, we’re going to be talking about a consulting business plan. An independent consultant’s specific business plan is can be such a mystery, but such a mystery type of concept. But once we break it down today, and I teach you what I mean, by the bottom-up type of a business plan, you’ll see how impactful this can be for your business, for you to make sure that you create a business that you love, that you’re growing, you’re scaling, you’re creating a direction that you want to be creating, and not creating some kind of a monster of Frankenstein type of a business that you didn’t intend to, and quite frankly, that you hate operating. We don’t want to get you into that spot. I work with a lot of clients who come to me and say, you know, I’ve been doing this for 10 years, or I’ve been doing this for 20 years, 15 years, and it’s a mess, I dread working in this business every single day. And I didn’t mean to get here, but just over the period of time, it kind of accumulated and created, the crew took a life of its own. And so can we work on fixing it. And so that’s what we work on together. But for you, whether you’re in that spot where you want to revisit some of the things that you’ve created and get back into the direction that you really want to be heading. Or if you’re, you know, newer to your business. And if you had a few projects under your belts, and you want to really set the stage to do this business, create this business in a way that is sustainable. In either of those cases, this episode is for you. So that’s what we’re going to be talking about today, the bottom-up independent consultants’ business plan. So so when I start meeting with new prospective consulting clients, so again, I’m a coach for independent consulting business owners like you. So when I meet, with other business owners like you one of the questions I asked them, either, you know, when we first meet, or early on in our work together, tell me about your business plan. Oftentimes, whether it’s someone who’s been an independent consultant for six months or six years, they look at me a little bit with, you know, like a deer in the headlights. And honestly, for me too when I was running a console, you know, fully running a consulting practice. Before I transitioned into coaching, I had no business plan. I didn’t even know what that meant when I thought of a business plan, and you might be in the same boat. Think about it, I was a political science major in college, so I never had to do this. But my roommate was in the business school. And she would come home with a psych project where she had to create a formal business plan with all these formal sections. And quite frankly, that you know, that never became a business. It was an exercise, right. But that’s sometimes what we think of when we think of a business plan, maybe some project you had in college, or maybe you think of a business plan as something needed to secure funding for a startup.
04:01
That was my other main exposure to business plans when I was incorporated, you know, contributing to the planning and pitching to get funding for the startup that I helped to grow, create and grow. So for you, what do you think of when you think of a business plan is kind of when you think of them in that way, it kind of feels daunting, feels kind of like this project, you’re going to be graded on either by a professor or by some venture capital, private equity investors, whatever it is that you might be having in your head about a business plan. Let’s just set those aside because today I’m going to share with you a really simple way for you to create and maintain an effective business plan for your independent consulting business. And by effective, I mean that it’s simple, doesn’t take a lot to create, doesn’t take a lot to maintain, and ultimately it helps you as a framework to create, to know what the results are that you want, and then to drive yourself toward in your business toward those results. And by results, I mean financial results, schedule, what your schedule looks like, as a business owner, as an employee in your business, as a consultant in your business, and the impact that you want to make. That’s all we need. We don’t need some, some sexy, you know, 29 to 50-page business plan that would meet all the criteria that a professor would be looking at, or a private equity investor would look at what we’re looking at as a framework from which you can run your business and get your get very clear on the results you want to be creating, and measure yourself against what you’re, you know what percent complete you are toward those results. That’s it. So hopefully, we’re clear on what the word business plan means now, and we can dive into today’s agenda. Today’s agenda for our podcasts is four parts. First, we’re going to talk about defining the, what is what ultimately we’re talking about, what are the components of your bottom-up business plan. So the four components are number one, defining the type of work you want to be doing. Number two, aligning your ideal schedule, and number three, aligning your plan to your financial goals. And number four, defining who you need to be calm in order to hit this plan. So I’m going to walk you through each of these four in detail. And just to be very clear, I’ve put them in this very specific order on purpose. A lot of times we think about maybe the financial goals first, or we think about, you know, what the what type of work we want to be doing. And then we sort of tried to fit it into our ideal schedule. And we never think about who we need to become to hit the plan. So I put it in this very specific order on purpose. So let’s walk through it in that order for you. So for you, Oh, but first out, I did want to set a little bit more context, and then we’ll go into number one. And that context is, this is your plan. And so you get to decide what period of time you want to create it. If you’re in an earlier stage of business, you want may want to do that to make out this plan, as you’re thinking about the steps I’m giving you for a 12-month period. Because you’re just not, you know, you haven’t maybe tested out a lot of different types of engagements or types of clients yet. So a little bit more variety and a little bit shorter runway could benefit you. If you’ve got some history in your business, you may want to build this out, like I do this in three-year increments for my business, because I’ve got history. And I know what I love doing I know what I don’t love doing as much and have a much clearer under some of those failures under my belts. And so I love doing this on a three-year runway, a three-year plan. So I’ve got some room to maneuver, set a really lofty high goal and give myself some space to hit that goal. So for you, as you’re thinking about the end of the timeframe of the business plan and the steps I’m about to share with you, those are some things you may want to consider considerations as you’re, you’re thinking about the timeframe of this. So with that, let’s dive into the first kind of bucket, the first category of our step of your business plan. And that’s to define the type of work you want to be doing.
08:47
Do you want to be doing long-term multi-quarter even multi-year engagements? And if so, why? Why do you want that? Sometimes the answer is I just don’t want to be nervous that I don’t know where the money is coming from. That might not be the best business plan that you put in place. It might be that you book a longer-term client to give yourself some room to maneuver and move into the business model that you want. But get really honest with yourself about what it is that you want and why you want it. Do you want those types of long-term engagements because you love them? Or because you think it’ll make you feel less nervous? Why are you selling yourself short? If you’re just doing something because you want to feel less nervous? There are lots of other better ways to not feel nervous. Besides setting yourself up for work that you don’t like to do. Do you want to have some kind of ongoing retainer-based advisory work? Do you want strategy work that you hand off for someone else to execute? Or do you want to do the strategy and the execution like really ask yourself what kind of work what is the nature of work that You want to be doing? Do you want to have one client at a time, when you really dive deep, you want to have five clients at a time where you have more variety. Really ask yourself what it is that you want. Put this stuff off the table for the moment about whether this is practical or realistic or a good idea. Don’t sell don’t do that to yourself. Don’t crush your dreams before you even start. By basically telling yourself it’s not available to you. So why even think about it? That’s terrible. Don’t do that. Think about what your dream business is? What are the dream clients look like? What are dream engagements look like? And figure that out. Because so many of us, as consultants, and independent consultants, approach our business backward. We accept whatever comes to us. As clients, we accept whatever comes to us as it types of engagements. We accept whatever comes to us in terms of how many clients we have, how long the engagements are, and how much even we’re paid for the engagements. And that becomes our business plan.
11:16
That’s backward.
11:20
Again, you might take things in the short term to give yourself some runway, but go figure out what kind of business it is that you want, and be honest with yourself. And then let’s reverse engineer for you how to get it. Don’t just accept whatever comes across, you’re not the kind of person who does that. So don’t do that to yourself in this business, you don’t have to. To begin with that end in mind and strip away whatever feels practical or realistic, or that you should be doing, and get super clear on what it is that you really, really want. Okay, that’s the first step. The second step is to figure out, so now you know exactly what you want to do in terms of the type and the nature of work. You might have one long-term client because you love your reasons for that. Or you may want to move into more kinds of shorter-term engagements, whatever that looks like, the next step for you is to build that into an ideal schedule. So look at your schedule over the next quarter or year or a couple of years. And really think about how you want to do business. Do you want to take off a couple of months? A year? Maybe December? And June? I don’t know, July, August.
12:37
Maybe you want to take a week off? Every month?
12:43
See what work the first three weeks of the month. And then you take the fourth week off? I have a client who does that? Maybe you want to only work on Monday on your business Tuesday, Wednesday, and Thursday for clients and have Friday off? What is your ideal schedule? Again, we do this in such a backward way. Most of the time, we think well, let me figure out how to make all of this work and in a way that I’m not miserable. That’s a shitty way to approach it. In terms of a business plan, right? Of course, you can figure out how to make everything work. But that’s not what we’re doing here. We’re figuring out what’s your ideal schedule? What do you want? How do you want to be working? How much space do you want in your life, to do other things, you’re a business owner, you get to decide, so write it down. Then we can reverse engineer how you get it. But at least be honest with yourself. This is what I would love to create might not happen next quarter. But I know I could get there in the next 18 months. But be honest with yourself, this is what I would love. Maybe it’s possible to get that. But when you just decide upfront, oh, it’s probably not possible for me to have what I want. So I’m not going to be disappointed by even trying, then you’re just failing ahead of time. Don’t do that. Okay, I’m under a bit of a soapbox. today. I want you gotta have what you want to have in your business. And this is a way to get there. So this is why I’m so passionate about it. Okay, the third step here with your business plan is to align your business to your financial goals. So you know what type of work you want to be doing. Maybe it’s some advisory on retainer. Maybe it’s some strategy work that you hand off to someone else to implement. Maybe it’s doing strategy and implementation, whatever the nature of the work is that you’re doing. That’s your, what lights you up, you know that you know what your ideal schedule is now, so you kind of know what your working weeks and time is in your business that you want to set up as your framework. And now you want to just Double check this against your revenue goals. So it’s great. It’s like, okay, well, how much would I need. So here’s what my lay of the land looks like for the next 12 months, let’s say when I’ll be working when I won’t be working, and what kinds of work I’ll be doing. Maybe I’ve got some gaps in between projects, whatever it is that you’ve designed, then you just go to work figuring out how are you going to layer in the pricing models that get you to the place where you’ve married together, you achieving your revenue, and income goals. With what you see to be aligned to the value you’re delivering to your clients, you can go back to last week’s episode for the formula and the process of figuring out what that value in the pricing would be. And then you’ve basically created a model that is doing work that you love to do on the schedule you want to deliver it on, and you figured out how that would work for you financially. And again, don’t forget the income side of this, we’re talking about revenue, you might have a very lean business with very little expense. And so your revenue and your income are fairly close. Or you might have designed a business model that has some team members, you know, some subcontractors or other people delivering or things that you’ve you’re outsourcing, do not forget the profitability side of this. Don’t design something that is generating a lot of revenue, and very little income, we definitely don’t want that. Okay, so think about, again, I put this purposefully on step three, not step one because you can get creative to figure out how to do the type of work you want to do on the schedule you want to create. It can fit very easily within the finance and can support the financial goals that you have.
17:11
So that’s step three. And if you need a little bit more detail around how to get to step three in terms of, okay, I know these high-level financial goals map up, what would I do in my business to hit these kinds of hitting these goals? Go back to Episode 64. We talked, and I talked with your kind of another layer under the financial goals about how to create your business development metrics. Okay, not necessarily for this though, keep, keep listening, you can put that on your list if you haven’t listened to it already, as a next step. Okay. So with that, we’ve done step 123. Step one, again, what is the nature of the work you want to be doing? Step two is what is the schedule you want to have as a business owner and employee of one in your business? And then thirdly, is mapping that to figure out how are you going to hit your financial goals, doing that type of work on that schedule. And then the fourth, and oftentimes most important part of this business plan is to get very clear on who you need to become in order to hit Create and make this business plan a reality. The version of yourself, who is running your current business, who is delivering for your current clients, who are working on the schedule that you’re working on, who is creating the amount of money that you’re creating is a reflection of the current way you see yourself, how you think about yourself, and your current mental models. It’s based on what you think is possible for you and your business is based on what you think you’re capable and not capable of your current results. Which, if you’re listening to this episode are not the results you want to create continuously create. They may be amazing results. But you’re wanting to bring your business to the next level where it’s more sustainable, where it’s more predictable, where you’re making more money, where you have more flexibility in your life, where you have more impact. Even if you have amazing results right now, we’re not trying to recreate those, the version of you who’s creating those is the version of you who thinks in the way you think right now. So we’re we, we want to get to the place where we’re really clear on what you need to be changing about the way you think and the way you feel in order to get to that next level. Again, your current results are a full reflection of your current mental model. What are you thinking about yourself? What are you thinking about? Ask your clients, what are you thinking about the value and the impact of your offer? How are you managing your emotions? Are you avoiding feeling overwhelmed avoiding feeling confused, and avoiding feeling uncertain, or unsure? Self-doubting, are you most? Are you able to redirect yourself? That stuff happens pretty much at every level of business. But are you able to redirect yourself notice that and redirect purposefully to create confidence and commitment, capability on a daily basis? So this fourth part of your business plan revolves around you getting very clear on the version of you, who has created this business that you just described in the first three steps? What is that version of you thinking? What is that version of you feeling? What is that version of you not thinking?
21:03
What is that version of you doing? What is that version of you not doing? How are you
21:13
see, seeing yourself? How are you seeing and thinking about your clients in a different way, that upper levels, the results that you’re creating, and enables you to get to that, whatever you’ve designed in those first three steps, and create those results on autopilot? So this is such a crucial piece of your business plan to get crystal clear about the version of you, which you’ve heard me refer to before your future self, who has achieved this business plan and is the purse, the version of you who just this is like what happens with you and your business on default if even if you weren’t really trying, it’s like the autopilot. And then you can do this again, right? You’ve got to get really clear crystal clear on who you need to be in order to create those results, that you’re not creating those results. And then, and then somehow you’ve arrived at being that person. It always requires you to be courageous and show up in a different way of thinking in a different way in order to get the results that you’re trying to create that are different than what you’ve created already.
22:34
So that is
22:35
those are the four components of your business plan. And I want to share with you a couple of traps, we want to avoid these things. Look, this is a living plan. This is something you want to set up for yourself. Again, what you’re delivering and what the schedule looks like, how the financials map against it and who you’re being to get all of those things. You’re going to fail, you’re not going to hit it the first time, like the first quarter might get done the first quarter, when you’re executing against this business plan you created, you might fail miserably.
23:21
That’s great news.
23:23
Because number one, it says to you, you know what I said something that’s a high bar for myself. I didn’t just create a slam dunk to make myself have this false sense of achievement, I created something that is causing me to stretch. So that’s why it’s great news. The other great news, if you fail is that you get so many inputs about what could be adjusted. So you want to fail. When you fail. Do you want to evaluate why, and why does it mean that I failed in terms of what went right and what didn’t go right? Because I guarantee it’s not 100% that you failed. In those categories. We were talking about those four categories, then you want to really figure out what am I going to iterate What am I going to adjust what I meant to do more of that was working, what am I going to do less of what I’m going to replace. So you just keep repeating over and over again, whatever your plan is to get to two that you’re executing against to achieve that ultimate business model and business plan we’ve described. And then just know that this is not set in stone, it’s not going to be perfect. And we want to avoid the traps of thinking it needs to be perfect, which creates over-analyzing over overcomplicating. We want to avoid that trap and we also want to avoid the trap of setting up something that just fails ahead of time because you don’t want to feel disappointed or like you’re a failure because you didn’t hit the goal immediately. So those are the traps that you want to avoid as you’re setting up this business plan this business model for yourself. And as a next step, this is the type of work that I do one on one with my clients, you can go put this into action, but I find that it helps so often to have a sounding board so that you can get further faster with fewer mistakes. So we can help you challenge you help poke holes in your logic, and help you create that clarity and direction and a plan for what you never even imagined was possible, let alone for you. You can have so much more than you’ve got right now, whether it is financial, or whether it is flexibility, peace of mind, or impact on your clients and for yourself, and for your family. So if you’re interested in talking with me about what that might look like for you, specifically, you can go grab a time off my calendar at consultmelisa.com. And in the meantime, be sure to go take that independent consultant’s predictability assessments, it’ll help you to look at four key areas in your business. This business plan is infused throughout those four key areas and will help you uncover where you might be, and have some gaps in your business that are creating less predictability than you could have. And really pinpoint those for us, you know exactly what to do next, gives you really good next steps and resources so that you can go address those areas that are holding you back in terms of predictability, and ultimately make more money and have more impact and more freedom and flexibility for yourself and your business. So those are the two next steps I recommend for you go put go through this work that I just gave you in this business plan so that you do have the clarity and you know exactly what the direction is that you’re headed for your business. And you’re not just kind of taking what you get and trying to make it work. You don’t need to do that anymore. So go make the business plan for yourself. And I look forward to seeing you again next week. Take care.
