There’s consensus around the importance of writing a business plan when you start a business.
But, given that how you start a business is the most crucial factor to its future success, should you spend the time writing this plan? And if so, how much time, and which kind of plan?
I’ve been looking into academic research around business planning, and found that it is quite hard to reach a definite answer.
A study published in 2010 ran a meta-analysis on 46 studies and found that business planning does improve business performance.
So, if we dive into research, what can we discover about business plans?
1. Conduct a Monthly Business Plan Review Meeting
Most meetings are inefficient, but this one isn’t.
You need to have a monthly business plan review meeting, where you go over the plan, see if you are on course, what projects got held back, and what needs to be updated.
I usually run this meeting at the beginning of each month, and it helps keep my whole team aligned with their goals of the month.
In the meeting, you review the progress you had in the previous month, and compare it to what you wrote down. You need to discuss the chosen strategy, and whether that strategy needs adjustment. You also need to review financials, and make sure your budget constraints still hold.
This monthly plan review holds you and the rest of your team accountable. It allows you to continually learn and adjust your plan.
The steps of running this meeting includes:
- Review financial statements.
- Reevaluate milestones.
- Review long-term goals and strategy.
- Discuss any bottlenecks or other issues.
- Action items
2. Make sure your plan is shorter and less detailed
Startups, especially ones in highly innovative businesses, should create shorter, less detailed plans, according to a study from 2007.
The same I believe is true for side hustle, who share a similar trait of working in uncertain environments. Side hustles are usually, as the name suggests, side businesses, so the owners need to maneuver and develop the business while dealing with another job and restrictive time constraints.
All these contribute to a fast paced business where strategies need to change on a regular basis. By using simpler plans, you are able to review your strategy and adapt it more frequently.
3. Don’t write in your business plan stuff you’re not sure of
When crafting your business plan, it’s essential to be genuine and realistic. Avoid making assumptions or adding information you’re uncertain about. A business plan built on speculation can lead to misguided strategies. Instead, focus on what you know, and if there’s something you’re unsure of, take the time to research or consult with experts.
4. If there is zero income, don’t make too high projections
Overly optimistic financial projections can lead to disappointment and mismanagement of resources. If your side hustle is in its early stages and hasn’t generated income yet, be conservative in your revenue forecasts. This will help you set realistic expectations and make sure you are not failing just because you made unrealistic goals.
5. Plan the runway for when you are not yet earning money
Before your side hustle starts generating a steady income, you’ll need a financial buffer to cover expenses. Calculate how much money you’ll need to sustain the business and yourself during this period. This “runway” ensures you can operate without financial stress, giving your venture the best chance to flourish.
6, Set clear and achievable milestones
Break down your side hustle’s journey into specific, measurable goals. These milestones could be related to product development, customer acquisition, or revenue targets. By setting clear milestones, you can track your progress, stay motivated, and make necessary adjustments along the way.
7. Allocate a budget for marketing and promotion
Even the best products or services need visibility to succeed. Set aside a portion of your budget specifically for marketing and promotion. This could be used for social media advertising, content creation, or other marketing strategies tailored to your target audience. Remember, effective marketing can significantly boost your side hustle’s reach and profitability.
8. Have success and failure metrics
Define what success looks like for your side hustle. This could be a certain number of customers, a revenue target, or other relevant metrics. Conversely, establish “red flag” metrics that indicate challenges or areas needing adjustment. By having both success and failure metrics, you can celebrate achievements and quickly address any issues, ensuring your side hustle remains on the right track.
Side hustle business plan template
Here is an example of a business plan that’s specifically made for side hustles:
Identity
I am a marketing expert who challenges conventional methods and processes for marketing, especially ones being disrupted by AI.Problem
Marketers are confused regarding how to make decisions to promote their business.Our solution
Our strategy incorporates research and logical thinking to reach better decision making processes.Target market
The target audience is marketers in SaaS companies.The competition
Other marketers who focus on innovative ways of marketing.Marketing activities
I will communicate with customers with an email newsletter, targeted Google and Facebook ads, social media, and in person at conferencesExpenses
ToolsTeam and key roles
Currently, the only team member is the owner. As profits increase, we will look to add an employee to assist with social media and online marketing.Milestones
As business grows, I will advertise in target markets
