Business Plans are Useless but do One Anyway

Starting out as a freelance journalist I was forced to write one, and I’m glad I did

Business plans are useless. That’s the prevailing wisdom, but then I did one, and the benefits now outweigh the time and pain it caused me.

The German government is generous in helping anyone who wants to be self-employed with financial support. It’s a lot of paperwork, and an essential requirement is a business plan to convince them your undertaking will be successful. Easy, I thought.

So I sat down at my desk in my pajamas at 6 am (because that’s what you expect me to do as a freelancer, true or not) and got to work. I then realized I had no idea what to do.

I’m not going to lie, it was boring, hard and took a lot of my time. I tried to take a few shortcuts (because I’m impatient) and sent the first draft to a friend (who also happens to be a business coach and knows how this works). She sent it back with the question: so what is it you want to do, exactly?

That’s harsh considering my business plan was about being a freelance journalist. Fine, she said, but how exactly was I planning to make money, grow and generate the income I needed to keep the lights on?

Without going into the detail, your plan requires you to outline the service you are offering, a marketing plan, target market, and a financial plan.

I’m a journalist, not a business major.

In essence, a business plan requires you to write down your goals, test their validity, and take an educated guess about how productive you’ll be.

Five-year goals are what I needed to create, but in reality, I could barely predict the first year, so I started fantasizing.

My service was pretty straight forward: I’d be writing stories for specialist news agencies. I discovered I had a niche offering in financial journalism, which set me apart.

Finding a niche is always a good place to start, but I was really in it to make money, and at this point, I was wildly guessing what my sales would look be.

Money focus

To figure out the actual take-home pay, I had to start tallying up all my expenses. I had a few items that were expensive but non-essential, like a Headspace subscription for $8 a month. Gone. I had a few other similar entertainment-light subscriptions that all had to make way for LinkedIn Premium, website and other costs.

Doing this exercise forced me to strip down all expenses and get rid of my non-essentials.

There was one thing on there that was non-negotiable: my box (CrossFit lingo for fitness studio) membership. It’s expensive, but I had to tally it up, and it was motivation to make sure I could cover the cost.

I did this month-by-month, then year-by-year and the most shocking thing was I could probably get by on less by being a little thrifty.

My earnings tables were detailed. I had to check through them quite a few times but seeing my own revenue goals laid out in front of me like that was visual confirmation that I had a lot of work to do and a sense of pride in what I hoped to achieve.

Accountability

I now have a reference for what I set out to do and what I was aiming at. I have a ledger to hold myself accountable. I’m now the responsible boss as I don’t have one looking over my shoulder anymore.

Of course, that first version was crap, but even if you’re undertaking freelance journalism, it makes sense to set out how you’re going to make ends meet each month.

Each story sold is a sale, and once you get a grip on that and visualize what you need to do it helps spur you on. I’ve missed and overshot on several targets, but that’s okay since that initial plan was projection without knowing what would happen in reality.

Reality will hit.

In my first year, I didn’t make much money in July at all. I hadn’t planned for that, then panicked and having to make up the shortfall under pressure was no fun. Now, I know to prepare for a slow month and spread the work so I can enjoy some time off.

​Had I not created a business plan, I wouldn’t have known how or where to adjust my activities, so I’m glad I wrote one, even if the whole ordeal ate away at my self-confidence and time.

Originally published at http://www.jarkoch.com.