“After reading Profiting by Design in 2010, a simple business plan was written…as it evolved, the business plan began to focus on ‘Demand and Supply,’ rather than ‘Supply and Demand’ economics. My business plan is seldom re-written but remains fluid and alive, and is constantly evolving.” —Chris Nelson, goldsmith and owner of Urban-Armour Jewelry
If you would like to increase your chances of running a successful business by 50 percent, then take the simple step (ok, it is a little daunting) of writing a business plan. It doesn’t have to be fancy, bound, or 30 pages long. And it doesn’t have to be for your banker or investors (though it can be). It can simply be for you. It is a tool. It is a guide. It is a road map. It is an ever-evolving document that can be changed and updated when necessary. I like to compare operating without a business plan to driving from Yakima, Washington to Camden, Maine without a map. Yes, the odds are that you will eventually get there with many interesting detours, but it would be helpful and quicker to have a map.
When we started William Richey Designs, we used the fly-by-the-seat-of-our-pants approach. However when I opened a gallery 20 years later in Portland, Maine, I wrote out a business plan. What I learned is that without this document, you don’t know where you are going or how you will know if or when you get there. I was able to put on paper my goals, vision, financing, projected income, and expenses, and what I wanted from this venture, to look at periodically and to keep me on track. It helped me make wise decisions along the way, as well as anticipate challenges that might arrive and how I could possibly handle them.
There are literally a zillion templates, articles, blogs, websites, books, and videos available for you to make your business plan as simple or sophisticated as you wish. I suggest that the document be two to three pages (not counting the financial pages). It can be just bullet points if you prefer. Below is my recommended format.
- Title or cover page
- The Business
a. Are you a sole proprietor, partnership, or corporation?
b. Describe the background of the business, its design philosophy and/or your artist statement.
c. State goals for the business, your art, and your financials—at one year and at three years.
- Your product
a. Describe your product and collections.
b. List registered copyrights you own.
c. Tell how you create your jewelry—materials, methods, design, processes, and time.
d. Identify your competition. And, yes, you have competition. What are they doing and how will you be different? Be honest with yourself.
e. Identify challenges you will face entering the market. How will you deal with them?
f. List your competitive advantages.
- Market Description
a. Describe how you categorize yourself as a jeweler. Are you a craft, fine, fashion, or art jeweler? Do you sell wholesale or retail or both? Will you have a storefront, sell on the Internet and/or sell at shows/events or all of these?
b. Tell who your target customer is. Describe them in detail.
c. Identify your location. Where are you going to work? Is it insurable? Is it secure?
- Marketing and Selling
a. Describe how you plan to reach potential customers.
b. Lay out your Marketing plan. Do you have one in place?
c. Identify trends that are relevant to you. How can you take advantage of these industry trends?
d. Show marketing and packaging materials you’ve already created. Include advertising you’ve used.
- The People: You and Other People Involved in Your Business
a. Include your resume. Describe your strengths.
b. List employees, subcontractors, and major vendors.
- Financial Data
a. Lay out your money needs. How much do you need? How will you pay it back? What, specifically, do you need it for? When will you need it?
b. Include a balance sheet, with projections for three years.
c. Include an income statement.
d. Include all other information pertinent to your finances: Inventory, tools and equipment, current investors.
- Summary and Conclusion—Write a short two to three paragraph summary that pulls together the information above.
- Visuals—Include drawings and photos of your work, articles written about you, your line sheet, and ads you have placed.
- Letters of recommendation and/or credit references. This is optional, but it is important to note that you have them available. You can say something like “Letters of recommendation or credit references available upon request.”
If you take each of these sections and write out your thoughts, you will be surprised as you watch your business emerge in a whole new light. It will feel more real, and you’ll look at your company with more objective eyes. If you have the right attitude you might even notice that your business and your thoughts about your business evolve.
At one point after we had been in business for seven or eight years it struck me like a lightning bolt that we were indeed a legitimate business. We had employees, a product, and wonderful stores that sold our work. We weren’t just a bunch of college grads working out of our basement in lieu of waiting tables. We were officially a business. It was a wonderful moment. It is never too late to discover that for yourself.