Transcript: Five mistakes a business plan helps prevent

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My mission is to empower entrepreneurs, so for the last 20 years I’ve been a business lawyer and for the last 4 years I’ve also done coaching, consulting and classes to help small business people figure out their businesses and manage their risks. Look, my first business plan was just plain terrible. I assumed if I built it, they would come, which is a common mistake. I forgot all about sales, didn’t even think about it. But things got better when I folded repeatable sales practices and processes into both my business plan and my daily task list. I had almost no plan for staff, because I literally planned to do everything by myself. My customer focus was way too broad to manage, and my business didn’t really take off until I started targeting actual customer segments. My initial business plan focused on perfecting my product, and not on making sure I was making a product that people actually wanted. Here’s what I did right with my first business plan: I identified my mission, and that mission has remained constant even when my strategy has changed. When I get off course, I reflect on the mission and it steers me right back to where I need to be. There’s one more thing I did right: I made a financial model for what my business was going to be, how much it was going to cost, how much I was going to earn, and when I would hit break-even profitability. If I can offer you one piece of advice so that you can avoid the mistakes I made, here’s what it would be: If you don’t know who your customer is, then consider the one person, one person you know who you’d like to be your customer, and call them up and ask that person questions and build from there. And I promise you, some of the insights you’ll get out of that conversation will do more to help you target your customers, your products, your services and your efforts than anything else you could possibly do.

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