I know a lot of woodshop owners that started off as a one-man business. They printed business cards, had their brother-in-law create a website, got a second phone line installed, and were on their way. Then they got a big job and hired help. Bigger jobs required more employees, and because the machine needed constant feeding, finding the next job became the priority.
Okay, so maybe this is my story, except I started before the Internet. Is my age showing?
But if you recognize yourself in this story, now is the time to take a step back and think about one, three, five and ten years down the road, evaluate your successes and failures, and write a business plan.
Think of a business plan as preparing for a cross-country drive. Would you leave without having a route or knowing how long the trip will take? Hopefully not.
A good business plan lays out where you are today and where you want to go. As with most cross-country drives, they don’t always go exactly the way you expect, so your plan needs to be flexible and get revised along the way.
A business plan also describes your company, what it sells, its market and goals. It typically contains a market analysis; the operational and management structure; the company’s financial status, and marketing strategies. It often required with a loan application.
A business plan should be referenced and revised as your business grows.
Here’s a breakdown some of essential elements:
Executive summary: This is an overview of what your business makes and sells; the ownership structure and history; the mission statement, and future goals. If seeking a loan, include growth milestones and financial information.
Market analysis: Describe the demographics of your market, explain your target market, and provide details about the competition. Include pricing data, discounting campaigns and sales strategies. Also, include any regulatory issues you may confront and operational costs necessary for compliance. Other pertinent topics to explore: Are you strictly local? Do you want to grow into a larger region? Would you do business across state lines? Take the time to investigate similar shops and learn what they’re doing differently.
Organization and management: Describe your company’s organizational structure, providing ownership roles and management team profiles. Putting this information down on paper will help when you need to replace or hire new employees. It’s also critical to have a written agreement pertaining to any partners, including defined roles, compensation and exit procedures. And do this while you’re all still friends.
Service, product lines: Describe what you provide to customers and review which jobs or products are the most profitable or cost effective. Determine the product life cycle and analyze areas for improvement. Also, factor in research and development costs regarding materials and processes.
Sales structure: Describe the sales process, including lead generation and average time spent from start to finish. Analyze for areas of improvement and explore marketing strategies to support your sales process.
On to marketing
Prepare a formal marketing plan that identifies your customers, states your primary message and how it is disseminated. Remember, marketing is not sales; it’s about selling to the masses.
There are a number of components to include in your marketing plan:
Branding: Defines who you are and what you sell. Your branding should be designed to attract a certain clientele and incorporate the look and feel of your business. Your brand should be expressed consistently using the same colors and fonts in your logo, business cards, stationery, website, brochures, etc. Unless your brother-in-law is also a graphic artist, strongly consider hiring a branding professional.
Messages: Establish one or two primary messages.
Elevator speech: Prepare a response to “what do you do” that can be delivered in 30 seconds or less. Your response should create interest and encourage more discussion. Write out your speech and practice.
High quality images: Hire a professional photographer to assemble your portfolio and always have it available for viewing, preferably on a phone or tablet.
Website development: Hire a designer to create your website using your brand and messaging. Include testimonials and images from your portfolio. Website design can be a do-it-yourself project but it’s not necessary to reinvent the wheel. Wix, for example, is a super easy platform.
Publicity: Think about the publications (both online and print) that your customers read and pitch a story idea to an editor or reporter. It has to be newsworthy. Did you just make something that is unique and different? Are you using new materials or a new machine? Even a new hire is worth a mention in the local paper because readers will see that your business is growing. Share any publicity through social media.
Advertising: Create ads that include your branding and messaging. Include a sale item or discount code.
Social media: Post photos of your shop, jobs in progress, completed projects and recent news. Post at least once every few days.
A clearly defined business plan, with a strong marketing component, will make the difference between a mediocre company and a controlled, stable and successful one.
This article originally appeared in the May 2019 issue.