Business Fundamentals – The Business Plan is Your Road Map to Success
This is a super simplified business plan discussion but I want to start here because without a business plan, you’re operating an expensive hobby, not a business. Some skip this part of business preparation if they’re not going to a bank for funding and that’s a mistake for so many reasons. For an easy to follow small business plan outline, I recommend this: https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan
I’m going to skip (for sake of brevity and boring you to death) the details in a business plan and focus on a few things a typical business plan may not address.
It’s important to be clear about how much you want to earn. Part of this being clear about your ideal client. If you have not clearly identified your ideal client, you will struggle with your financial goals.
Who is Your Ideal Client?
If you don’t know who your ideal client is, you will waste precious time. Please ask yourself the following questions to help identify who your ideal clients is.
- What are the needs your clients will have?
- What is the age of your ideal client?
- What is her relationship status?
- What is her personality type?
- What profession is she in (what is she doing to earn a living)?
- Where is she shopping for her clothes?
- What additional services is she treating herself to (hair, massage, nails)?
- Where is she going for these services?
- Where is she spending time online?
- What kind of car is she driving?
- What kind of restaurants does she frequent?
- Where does she like to travel?
- Where is she spending her free time?
- What kind of house does she live in?
- What kind of hobbies does she have?
- Who are her friends and where do they hang out?
The clearer you can get about the description of your ideal client, the better you get at finding and attracting these clients.
This helps you to know how to market and what services you are going to provide. If you want to build a high-end business where clients don’t flinch at spending money on your services, you’ll market to them in very specific places and ways. This type of client, for example, isn’t buying her clothes at Wal-mart and doesn’t buy her skincare on Amazon. She’ll be employed in a well paying job or she’s retired with a healthy retirement budget.
Now don’t misinterpret that. If you don’t want a high end business there is absolutely nothing wrong with that. It just means you will have to adjust your earnings expectations. It also doesn’t mean if someone shops at Wal-mart, she won’t splurge on your services. Right? She may shop at Wal-mart so she CAN splurge on your services.
And that leads us to the marketing portion of your business plan.
How Will You Reach Your Ideal Client?
Part of creating your business plan is knowing how will your reach your ideal customers. You will need to decide on your promotional strategy and marketing channel. What brand positioning you create for your product line(s) and company? We’ll talk more about this in future editions but you need to ask yourself these kind of questions as you plan.
Plan for Growth
Next let’s talk about business operations. In the beginning of every small business, the owner wears a lot of hats. You’re not only the esthetician, you’re the product and inventory tracker and shipper, the bookkeeper, the janitor, the marketing manager, and maybe even the website manager. But there will come a time when you have to start building a team so you can focus on what you do best. After all, you didn’t become an esthetician to be a bookkeeper or a marketing or website manager, etc., right?
What your team looks like will evolve as your business grows. You may start with a virtual assistant who helps a few hours a month. You invest in paying her so your business can grow. You delegate to her administrative work so you can spend more time serving clients and planning. Over time, when the budget is there, you will add others who help you manage all the pieces and parts that make your business operate efficiently.
No one builds a successful business alone. It takes a team to get your business to higher levels of success.
How Much Do You Want to Earn?
Part of the financial piece of your business plan determines how much money you want to make in your business. Again, what I’m sharing here is a super simplified discussion. You should sit down with an accountant and/or a business manager you trust to plan this out properly but this will give you a bare bones look at what you need to consider.
I’m going to write this like you’re a newbie so don’t be offended if you’re established and this seems elementary to you. Just skip this if it doesn’t apply to where you’re at.
The financial question poses other questions like…What does your budget look like each month? How much do you need to pay the light bill, the mortgage, groceries, sitter, car payment, and so on, until you have a list of what it ACTUALLY costs you to live. Don’t leave out any expense when you make this list.
You might have a partner who helps earn so you’ll take that into consideration as well.
Next, make a list of how much money you also need to buy products, supplies, equipment, marketing, website costs, etc., for your business. Now, take the final number and add 25% (this % will be determined by your tax bracket so please consult an accountant) because you also need to make enough money to pay your taxes.
Once you have the final number of all of the above, you can then determine how many customers you will need to serve each month to make enough money to earn a living. This will also impact how much you charge for your services, etc.
The number one mistake I see estheticians make is they UNDER CHARGE. They reason that customers won’t pay X because of where they live. I beg to differ. How much a customer is willing to pay is determined by how well you posture your services AND if you are marketing to your ideal client (or not).
Your Value Doesn’t Decrease Because Someone Can’t See Your Worth!
Remember, your ideal client isn’t someone who cannot afford your services so stop trying to sell to those who cannot. The minute someone speaks negatively about your prices it is a red flag they are not your ideal client. Don’t lower your value by lowering your prices. Instead graciously move on to clients fitting your ideal client description. We’ll talk more about that in future editions.
A Business Plan for Success!
The objective of this conversation is to encourage you to get a business plan down on paper (or screen). This plan isn’t set in stone. You’ll adjust it as you grow and learn. Writing a business plan is one of the best ways to ensure the success of your business.
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