Bringing Business to Retail
Jessica Oman- The Renegade Planner Kicks Some Biz Planning Butt
Bringing business to retail podcast, episode three with Jessica Omen. Welcome to the bringing business to retail podcast on Salena night.com. Stay ahead of the competition by opening your doors to business experts so you can learn, grow and be inspired. Passionate about bringing business strategies to independent retailers. Please welcome your host, Salena night. Hey, there. Welcome back to the bringing business to retail podcast. Today's episode I'm really excited about. I've got Jessica Omen from the Renegade Planner and over the next couple of weeks, in fact, the next five weeks, I've got some really meaty how to podcast. I'm talking about outsourcing, talking about freeing up some time in your life, talking about launching your business, growing your business. And in today's episode, Jessica is going to go through business planning. Now, before you get growing business planning, the stuff that she tells us, even if you are past the business planning stage, if you don't need the finance to open your business, the stuff that she's going to tell us really makes you think about where you're at in your business journey. She's going to go through the eight steps of compiling a business plan. Now, whilst that's good for getting venture capital or getting some financing, what I found was really great was that those steps were really important for me checking in at where I was at this stage of my business. She's going to make you dig deep into your business. So it's not just a glossy piece of paper, talks about facts and figures. The business plan that Jessica does actually makes you dig deep into almost into the wire of your business, and she's given us a great resource, which you can find in the show notes, but I'll talk to you about that later. So without further ado, let me introduce Jessica Omen from the Renegade Planner. And welcome back to the Bringing Business to Retail Show. On today's show, I have Jessica Omen from the Renegade Planner. Now, in my course in the launchpad, which goes live in May 2015, we go over just how much it costs to open your own store. And this is where people go wrong, they severely underestimate how much it's going to cost. But even if you're in another business, you're not opening your own shop, or you're already an established retailer, getting access to capital is what you're going to need to grow your business. And this is when you need someone like Jessica. There's a knack to getting money, especially in these current tight lending times. And I love how Jessica describes herself as writing business plans that pack a punch and make investors and lenders pay attention. Now that's my kind of girl because I love people who are a little bit different. And I think if you are a little bit different, you do get the attention of the people enough to actually get them to read what you're putting forward. Now Jessica has an MBA and a bachelor's degree in English and education. So she really knows her stuff when it comes to writing. So let's just jump on in and talk to Jessica about what it is the Renegade Planner is, what it is the Renegade Planner does. Hi, Jessica. Hi, thanks for having me. Great to have you on board. I did not have the lintro for you, but I'd love it if you could tell our listeners about yourself. How exactly did the Renegade Planner get started? Almost by accident. Basically, I've always been interested in entrepreneurship and kind of doing things in a non-conformist way. I don't don't confine to any conventions really in the way I live my life. And a few years ago, I was post MBA and in a job that I really didn't enjoy. You know, sort of the typical story that you hear about a lot of entrepreneurs who just, they couldn't handle having a boss anymore. They just weren't enjoying where things were going with their career. That's exactly how I felt. So I had this idea to combine my business education and my really strong writing skills to work on business writing projects for entrepreneurs. But I didn't have any money really to start my business at all. Typical entrepreneur fashion. Right. So, you know, here I was like, well, how can I go and help people get financing to start their companies? And I don't have any money of my own. And I was like, well, you know what, the planning process is still the same. I'm just going to put my back up against the wall and do it. So I quit my job. I had 200 bucks. I bought a piece of software that I don't even use anymore. A $5 set of business cards and I registered my business name. That all cost about $174 and I had $26 left. So what did you do with the $26? Well, I guess that became my working capital. I use it for I use it for bus fare so I could go downtown to my first networking event. I just started advertising on Craigslist and I do about a six month process of experimentation with different types of ads and different types of clients. I learned quite quickly who it was. I really wanted to work with and was able to start refining a system for my own business planning as well as being able to apply that to other people's projects. So you you took that knowledge of those first six months and that's how you developed where you're going to go in business. That's how you developed your system of writing the business plan. Is that right? Yeah, absolutely. And I'm still refining it and changing things all the time because the business plan is ever evolving, but yeah, it took me about six months to start figuring out who that customer was going to be and start to feel really confident that I could apply that to other people's businesses as well. And did you work full time on this business in that six months? You were saying that you quit the job and this is what you were going to do. So did you commit? Did you go hard and go, you know, six to eight hours of my day. I'm going to be working on the networking and the finding what it is, what I love doing and the writing, the processes and the systems. How did you manage that first six months? Yeah, I definitely spent a good six to eight hours a day on it. But I was floundering a little bit because it was my first foray into entrepreneurship and I wasn't exactly sure what to do. But I knew that I had to develop this planning system and I immediately fell on kind of a unique approach to business planning that none of my competitors were doing. So I went with that and I just worked hard on it on differentiating myself from the other local consultants who were doing a similar type of work and just refining that system until I got it right I should say, even though it's still changing. And how did you launch that product? My business plan consulting services? Yeah. I just started telling people that I was a business plan writer because I had done several of them through my own education and I'd been reviewed and I had gone through competitions. So I just started to apply that knowledge to real life projects and I just told people that was my specialty. I used to do other types of writing, to copywriting and editing and that kind of thing but I've since pulled back and specialized only in the business plan. So I do sell the business plan as the product of consultation. So a lot of people will just sell a business plan and they'll just write it and do their own research in a silo and then tell people to take that to the bank. I don't think that that works very well. I think the approach has to be collaborative. You need to work closely with the entrepreneurs so that they can really sell it. So what I do is really consulting but I produce a business plan at the end so they have something to walk away with when we're all done. Well that's great. Let's just delve into that a little bit deeper. What is the big thing apart from going out and trying to do it themselves which I'm sure works in some situations but if you're a very niche industry or if you're something that the bank or a venture capitalist hasn't ever heard of you obviously need to get your point across and when you're in that niche you live it and you breathe it and you have your own jargon and you know how fantastic this product is but that means nothing to the outside world. So tell us a couple of the mistakes that people get wrong when they write their own business plans. When they buy one of those off the shelf templates they pay their dollars and they go this is what the bank wants to read so this is what I'm going to fill out and this is why I should get my money. Yeah well there's a whole bunch of things. One of the first ones that I see a lot when I'm reviewing other people's plans is the claim that they have no competition. This is huge and entrepreneurs all have unique ideas. Everybody's business is unique. It's like a fingerprint but that doesn't mean that there's nobody else selling a similar product to a similar group of people. You will always have some sort of competition unless you are the next Google but even then you're competing with Google so like there's just no way to get away from that and I see that quite commonly in people's business plans where they say there's nobody like me I have no competitors and that is never ever true because your customers already exist. They're fulfilling the problem that you solve. They're getting their solution in another way right now and it's up to you to try and capture some of that market share. So there's always competition and people need to talk about that and acknowledge that it's there. Another one I see a lot is like you mentioned at the very beginning underestimating the cost to start up as well as underestimating the cost of operation and/or inflating their revenue projections. So thank you that you're going to go from 100,000 in sales this year to a million and a half next year. It's very unlikely that that will happen. It does happen from time to time and we see these success stories but it's very rare that that will occur. So you want to have financial forecasting scenarios that show your best ideal case as well as your expected or more realistic or conservative case. So those are two things that I see a lot of and the third one is that is people forget to pay themselves. Oh the first rule of business, pay yourself first. Yeah absolutely and while there is merit in foregoing some salary to help the businesses cash flow at the beginning and help it grow, I think there's something to that but a lot of entrepreneurs fail to budget for it at the beginning and to make sure that they've set aside some part of their capital in the future to actually make sure that they're getting a fair return for all the work that they're putting in. Yeah and that's something I talk about in my course as well is you do, you go in with the best of intentions and you say I'm going to work in my store, I'm going to work in the business and you underestimate how much time it's going to take because I distinctly remember saying to my husband, well if I open my shop from 10 to a four, that's only six hours. I'm like I'm working nine hours in my current job like I'll be doing six hours a day. I'm sorry you've never been 12 hours a day. So I think they get the underestimating how much time you're going to have to put in and remunerating yourself in line with that because if you're working in your business, it's so easy to pay the bills that come in because they're the things that are hanging over your head and you don't want to go into default on your electricity bill or you know you not pay your staff if you have staff, those things need to be paid and I think you lose the love if you're not paying yourself. You do get into that headspace of what am I doing this for? Like I was getting paid more working for somebody else in a stacking shelves in a supermarket than I am now if you don't pay yourself and I agree that you do forgot that money but like you were saying you need to write into your business plan at what point you're going to start compensating yourself fairly for the work that you're doing. Yeah and I think if you apply the same mentality of having an obligation to pay yourself, the same obligation that you have to pay your utility bills and to pay for your internet so that you can keep your company going, all of that stuff, you have an obligation to compensate yourself and if you can kind of get yourself into that mindset, I think that that's quite motivating because if you set a deadline like my paychecks have to start in month six so that means my business has to earn this month, this much every month, I think that that really helps motivate you to really reach those objectives. Yeah, so our top three things that people get wrong when they write their own business plan, they say there's no competition and they neglect to actually find who their competition is, completely underestimating the cost of starting up and their running costs and getting their financial predictions perhaps a little bit over enthusiastic on where they're going there and forgetting to pay themselves and I guess part of that is also failing to budget correctly, you haven't actually put your budget together in a realistic fashion. Yeah, absolutely. Those are pretty common issues that I've experienced. Right, so how can you help people with that? What's the process that you take when you bring a client on to write a kick out business plan? Well, first it's important to get the entrepreneur into the mindset of a business owner so it's more than just producing a product and putting it out there and hoping people like it. It's about thinking like an entrepreneur, like somebody who has this product and they're trying to find a way to make their margins and profit from it and there is a bit of a science to that so people have to be open to shifting the way that they think about what it is that they're selling. So at some point we are selling a commodity in some way and so you do need to be able to think about your product like that in order to be successful I think and that doesn't mean to take the passion out of it, right? That doesn't mean to say well but I make the best pasta sauce ever and I just want to tell the whole world about it. Don't stop doing that, right? You need to do that. But there are some technical things that you do need to get in hand behind the scenes in order to make your product sell really well and help your ideal customers really understand why yours is better than anybody else's. So that's the first thing that I do with people is try to put them there. And then we start talking about the ideal customer, right? This is not a new concept, a lot of people in my space are talking about this but you do want to produce that customer avatar, that one perfect person that if you could just clone them over and over a million times or as many times as you needed to fulfill your business and bring it to capacity, that that would be that one person. And we narrow it down as much as we possibly can and then build a marketing plan and build a business plan and build a strategy around that person. And it's so much easier to do that than to try and look at an entire industry and say, oh my gosh, how am I going to reach all the people out there? If I can just jump in there, why do you think, and this is something that I find people just will not do, it's like they don't want to know who their ideal customer is, is it because this is a thinking thing, you really have to dig deep to think who your ideal customer is. I talk to people all the time, I mean I know in my store we put together brand profiles, so we literally have a lady who, her name's Sally, and that wasn't my choice of name, her name's Sally and she is a mum with her first baby and she earns this much money and she likes to wear these kinds of clothes and her husband works in this industry so we have those brand profiles but it takes a lot of work to do it but I just find that entrepreneurs just aren't prepared to get that level of, they're not prepared to dig that deep. Why do you think that is? I think there's some fear there, there's, I mean a lot of people are starting out are really freaked out that they're not going to earn enough income, at least in the first few months or a year to support themselves so they go out and they try to market to everybody in the hopes that they'll just get some customers who will give them some money. So I think there's a fear of excluding people who might potentially be good clients or good customers or that business if you narrow down your profile too far. So it's a bit counterintuitive to say, well I just think of my one ideal customer but by doing so you actually end up attracting more of the types of people you really want coming into your business and the people that you end up excluding are ones that wouldn't have become your customer anyway and probably would have wasted a whole bunch of your time. Yes, exactly and I'd love to know how much time if you just, on average, do you spend with your clients to develop this ideal customer role because I know when I did it, I reckon I spent about two weeks off and on thinking about who these, who my two brands were, who my two avatars were, these two ladies who came into our shop with their babies, the online customer and the in-store customer and they were completely different, yeah I reckon I spent two weeks working that out. How long do you give your clients to work out through their ideal customer if they don't already know? Well, I think the exercise itself might only take a couple of hours but thinking about it could take dozens, you know, and so I give them a worksheet at the beginning, I haven't still it out, it's almost never specific enough and then I start challenging their assumptions on each one of the questions that I ask in the worksheet and we usually spend an hour or two just discussing that and trying to narrow it down a little bit more. But I even find that through the process of writing the business plan which might take anywhere from three to six or eight weeks, their own definition of their ideal customer will already start evolving. So I don't spend hours and hours and hours on it right at the beginning, I get us to a place where they feel quite comfortable moving forward and then I allow that definition to evolve as we work and then I tell people, okay now you've got the business plan now at least once a quarter and make sure you're reviewing that definition again to make sure it still fits with the whole philosophy and strategy for your business. Great advice. And I have to say it was just at the beginning of this year so first day back our team got together and we handed out the profiles and said is this, you know, since we lasted these 12 months ago do we think that this is still who our ideal customers, who our avatar is and we did change a couple of things but essentially we all agreed that based on the people who were coming through the doors this was an accurate reflection of who our avatar was. So we've got our ideal customer, what else do we need to write this business plan? Well once we've got those two pieces I wanted to start talking to the entrepreneur about what kind of legacy they want this basis to leave so it's very and it's very difficult to think about that when you haven't even launched yet but I try to, I ask them about expansion, about possibly selling off the business, about where they see things themselves when they're ownership of the company in 5, 10 or even 15 years or even close to retirement because all of that can affect the way that you structure and operate your business in the long term. So we do that and then I start beginning the market and industry research that the bank wants to see for their assessment. And do you do that or do you get them to do that? I'll do all of that but yeah I do all of that but I'll obviously clear it with them too and I'll give the rationale behind, you know, where I've gotten the information, why I've, you know, thought that these market segments are probably the best ones for them, where the ideal customer fits into that segmentation and all of that but it all has to be cleared by the entrepreneur but I will do the work for them. And that, I think it's great when you can give that to somebody else who knows what it is that you're thinking, who, you know, you've been in this discussion with them, you know what their product is, you know what they want for their business and who their ideal customer is now and as an unbiased person you can go out and find those industries or those, you know, the market niches that perhaps they hadn't thought of that have come to you because you're not so involved in this business and in this brand that you can see the wood for the trees, you can see all these other opportunities that could be there and you can actually evaluate their likelihood of success from an unbiased perspective. Yeah it's funny I just made me think of an example of a client from a couple of years ago who had a product that was locally made organic, very artisanal food product and we talked about his ideal customer being, you know, a mother in a relatively high income family who wants to purchase quality products for her family and for her children and we had to find her in a whole bunch of different ways. He agreed with all of that and had came to me with this incredible marketing idea that involved putting scantily clad women down town handing out flyers and I was like, "Okay, that doesn't really quite fit the profile." And at the end of the conversation, "Oh right, okay yeah that's right I just need, you know, some people just need to get out of their own heads and there's nothing wrong with brainstorming ideas even if they're totally ridiculous but people do get caught up in their own heads about what tactics and strategies they think will work so I think it does help for me to bring them back to, okay, but that does, is that something your ideal client would actually respond to in a positive way. And this is where it comes back to, and I'd just like to say before I do that, is sometimes the most ridiculous brainstorming ideas actually work their way out to be something that is totally awesome, perhaps not scantily clad women for high-end moms but, you know what I mean, like that, if you're talking about it with somebody else, that then progresses to, "Okay, we take the scantily clad out and we turn it into this and instead of handing out flyers, we were handing out samples of this then that's what we're looking for." So you can't always diss the really, really radical things, you just need someone to bounce them off before you put them into practice. Yes, sometimes all it takes is just vocalizing something to realize that it's a good idea or a bad one, you know, you just need to talk it out. And so we've got our market and industry research and we've taken that back to the client who's gone over it. Do you find that that becomes a bit of an aha moment for them, they just go, "I didn't realize either. I didn't realize the market was that big or I didn't realize the market was that small or, you know, it's got to cost way more than I thought because you've now told me I'm marketing to these number of people because once you have that ideal customer in your head, you know who you're marketing to, you know you don't want the scantily clad woman for the mum. You know that actually there are this many and you can get those facts, can't you? You can get that the geographical and demographical data that says there are this many women in this age group who earn this much money. So you know all of a sudden that potentially if you've got every one of those people as a customer that you've got this pool of people to deal with. So do you find that they get excited or they get upset when you come back with this research? Like what's the general feeling once you come back with the market and industry research? Yeah, I've experienced both elation and disgust as a result. It's true. I mean sometimes we do the market research and it comes back and says actually this customer segment in which your ideal customer fits is too small and we don't think that your business can be profitable in the long term if you're only focused on that. So how do we expand it out whether the types of customers could we try and reach? More often than not though, the research comes back and the market segments are still too large and then we have to niche it down within that because it just would become too prohibitively expensive to try and market to such a large group. The other thing though that is difficult and this is especially a problem in Canada and probably in a few other countries is that we can't always rely on the accuracy of the research that we're finding because a lot of it is out of date. The data is not always current enough to accurately reflect the market that we're looking at or it's too pieced out for us to be able to analyze and assess it with a lot of confidence so that can be a problem as well. We're always doing this based on assumptions because you can't predict the future but that is something that entrepreneurs need to be comfortable with anyways because you really never know what's going to happen on your journey. And so we've done all of that, we've got our customer, we know where we want our business to go and the legacy we're going to leave, we've done our market and industry research. Now are we nearly done? Oh no, we haven't touched the money yet. So what's next? Well I mean simultaneously I'm working on developing a financial model. Normally the financial forecasting is where the entrepreneurs have the most trouble because they're not used to creating those templates and using those spreadsheets and they can be quite restrictive. I always tell people templates don't work and it's because I have to modify my templates for every single entrepreneur that I work with and every single type of business. That's why most people get stuck doing their own projections because the templates just aren't that flexible. But you know in the meantime I'm taking some industry benchmarking data and I'm looking at what the typical costs for a company in that industry are to start giving us a sense of what we expect it to cost to operate that business and we try to figure out what all of the fixed costs might be and what the categories are and then try to estimate some amounts for that as well as understanding manufacturing costs or direct costs related to selling the product. So if you have a retail store your direct cost is the pricing that you're getting from your wholesale or to actually acquire the product to put in your store so we have to figure out what that's going to be and sometimes they start negotiating with suppliers at that point in time to try and get their costs to a manageable level because quite often I find that entrepreneurs think that they can profit with a certain markup on the wholesale cost but often they can't and so they have to put a little downward pressure on their suppliers to get a better price. So I'm doing all of that kind of at the same time as all of this market and industry stuff and just kind of starting to bring it all together so they can start to see the big picture. And do you have a template that in your big big template do you have like a worksheet that you develop with the entrepreneur or the new business owner on how much these costs are going to be or is it a fluid thing where you just kind of brainstorm and go okay well manufacturing costs are going to be like you said we at the beginning I find people desperately underestimate the cost and one of the things that I talk about is I remember when we opened our second store and I had to go on by stationery and I spent $200 on stationery and it would never have occurred to me and it sounds like a pitiful amount of money in the grand scheme of things but it's everything costs $200 all of a sudden you're up to thousands of dollars and all this is pens and paper and glue and sticky tape and staplers and all these basic mundane things that we just kind of take the granted that we probably pilfers from somewhere over the years but when you have to go out and buy them those costs that up so how do you work with your client to actually develop what those costs are going to be and do it accurately because we talked about before it's so easy to overestimate your revenue and to have these fantastic predictions if everything went fantastically how do you rein them back in and make sure that those costs are actually realistic well I start with general categories related to the industry that they're working in so the bulk of my experience with this stuff is in retail and in restaurants so that these are the areas I know really well but I've done a few other industries as well so I look for a benchmarking data for their specific industry to start figuring out what the general categories of expenses are going to be and then it's a fluid process from there so yeah we'll just consult on it we'll talk about different things and I'll ask them questions about you know when they might need to acquire new inventory and how quickly they want it to turn over things like that so that we can start to get a picture of how this specific business is going to operate so that's basically what I do and then to rein in the sometimes over-enthusiastic revenue projections I say well what is your system for creating that kind of revenue if you want your company to bring in a half a million dollars let's look at what that is it's hundred and twenty five thousand dollars per quarter that means every three months or every month you've got to be bringing in over forty thousand dollars in revenue and then it's like oh wow okay that's a lot of money I need a system in place to have forty thousand dollars a month in revenue that's actually quite significant amount and that's usually when I hear it say okay well I'm going to need help to do this or I'm going to need some tools or resources to help me with it yeah and that's in the course that I do that is a whole module on working out how much it's going to cost because I remember thinking in in my first you know when I opened my first shop I came from a government background I was a tree surgeon I had a degree in business which didn't help me a bit but I didn't know anything about turnover and three day accounts and all that kind of thing and I literally remember one of those aha moments when I was sitting in the shop and the shop was empty and I remember thinking I should do a stock take and I did my stock take and I think I had ten or fifteen thousand dollars worth of stock and I got to thinking and I'm not a numbers person oh my gosh if I sold everything in this shop in the next week the most amount of money I could earn before any overheads and any anything else would be five thousand dollars and at that point that was my turning point by going I never actually worked this out like and it seems so silly but when you're an entrepreneur and let's be honest if you're opening a retail store nine and a half times out of ten you're opening it because you're passionate about what you sell and you want to help people and you love this product or you love you know the niche that you're in whether it's by crying or fashion or baby industry you do it because you love the product and you want to help people and you know surely most people unless you come from that sort of background never actually sit down and think oh my gosh I'm going to need this much inventory and this much turnover at this much margin and this many people through the doors to actually get those costs and I think it's fabulous that you've just mentioned something there that I didn't even think about until last year four years in into the first retail store which was my tech turnover my husband who in the tech industry came in he said you need your laptop what if this laptop dies your whole business we run our point of sale system on a cloud based system if this laptop dies what are you going to do and I was like oh I don't know and then he goes well you're not here all the time so if it dies what did the girls in the shop do you like watch your process you need to be replacing your laptops every three years and so I was like there you go so now I have a system in place with our tech that goes through and says we've just had to replace our full server which was a three and a half thousand dollar investment but we know that every two years that has to at least be upgraded and we know that new laptops in the stores every two to three years and your new warehousing system needs to be updated so these things again I was still learning at four years in that I needed to replace my tech so money that was the hard part and this is the I guess this is the part where people go I'm going to need some money from somewhere else yeah and I think especially with seasonal businesses and and businesses that have to order their inventory well ahead of time I think fashion is a perfect example of this you've got to be ordering like at least two seasons ahead mostly you know you're expending a ton of money you know several months before you're ever going to start earning any of that revenue back on that in inventory and so the planning becomes especially important for your cash flow because if you put all that money out and you put yourself fifteen thousand dollars into debt to get the inventory that you can't sell for another six months you're paying interest on that debt you're paying holding costs on that inventory to store it somewhere and all of a sudden it starts costing you a lot more to have it so yeah that's when a lot of people realize okay you know what a line of credit or a loan is something that I really need so that I actually have some capital to acquire this inventory and I'm not stretching myself to my absolute limits that's come to you with the idea of putting a business plan together and now they've worked out they actually need the money to do this so what's next once we worked out how much it's all going to cost where do we go from here well there's a member of other pieces to a business planet you want to fill in you've got it you want to do a marketing strategy overview so once you have your profile of your market and how big it might be then how are you going to reach it and marketing plan is not we're going to get social media accounts and tweet daily that is not adequate you need something more than that so something a little bit more strategic and a budget a marketing budget for how much you actually want to spend on each of your marketing activities so I will spend a little time with the client discussing that how much they actually want to spend and I find this is one of the cost areas where that is really underestimated and like worse than most categories is a lot of people think that they can get away with two or three hundred dollars a month in marketing spending because all of their advertising is going to be quote unquote free using social media and word of mouth and you've always always ends up costing significantly more than that once you start getting into Facebook ads and Google ads and if you're going to go with newspaper advertising or you're going to give away product samples I mean all of that cost money right well even printing out flyers to give away here to give people not all of your suppliers will give you flyers or maybe you want to promote a sale that you've got coming up or a workshop that you've got coming up someone has to pay for that it doesn't just pull out of the sky yeah or you need to go to a trade show and that so you have travel costs and conference fees and all of that kind of stuff so so through that we're working on you know developing a marketing strategy within a budget that they're comfortable with and kind of figuring out how much revenue we think that that can drive I'm filling out information on regulations which I can usually find you know on the internet I'll just look at what kind of permits and legislation might be in place in their particular area for how they want to operate all of that kind of stuff to just to kind of fill in the rest of the business plan template and you know I also want to make sure that I have a really strong sense of of what the what the real value proposition is for the business the thing that sets it apart from everyone else in the industry so that I can write a really compelling business overview and executive summary for them so I'm kind of doing all of that stuff at once because you know it each every time you work on a piece of the business plan it kind of gives you an idea for how you might fill in another part of the business plan and I'm really good at that and that's where a lot of entrepreneurs get overwhelmed so that's possibly where some of the sort value of the service that I provide lies is that I can handle all of those aspects of the business all at the same time and then I'll be able to put together a draft for them to review so they can see everything all in one place and then we iterate and work with that draft until they're happy with it they understand it they can explain it and they just like it to the bank and this is the thing that makes having the investment in someone who knows what they're doing so worthwhile if you feel like one of those templates it's just going to say how much do you tend to spend on marketing and you go like you said $300 a month because because you think that that's what it's going to cost but if you don't have somebody there telling you that in actual fact okay so how much do you think you're going to spend on printing how much you're going to spend on Google AdWords how much you're going to spend on all those things that you just mentioned they all add up and when people say that that's two three hundred dollars or a thousand dollars a month whatever the figure may be if you haven't had experience in that sector then you're randomly parking it out because you think that sounds like a good amount so you just don't get that with the template so if you get the template and take it to the bank what happens when you've severely underestimated if you underestimate every single one of those things by 10 percent all of a sudden you haven't borrowed enough money well yeah and especially in retail where net profit margins tend to be quite low yeah it just and if you haven't taken into account the in-dead ordering and the money that's just sitting there waiting for stuff to come next season like you said the cash flow so the service that you're providing whilst it is helping people to write the business plan for the bank it's some really fantastic strategic management in how you actually need to not run your business but put your business proposition together and a lot of the stuff that you've said it's just overlooked by people who are new to not just a retail store but any business you if you start up your own online business and you're selling say you've written a book you think well I don't need any money I'm just gonna you know whack up a WordPress website and put my book on there but in actual fact as we all know the costs all mount up you still need to advertise your book you still need to put time in you still need to answer all those emails and those are the things that if you don't have somebody who is outside to talk to you about and to bounce off with you just don't get that level of understanding about where your business is or where it's going oh yeah and I mean I don't want to freak anybody out either right because the process can be really daunting and sometimes I've had clients kind of sit back and go oh my gosh I don't know if I can handle all of this it's I never thought about these things you know so my job is also to kind of boost their confidence disabled but because we're doing going through this now and because you're aware of it now you have a strategy to mitigate the risks that are coming up you have ways of dealing with potential issues because you can't know what the future is gonna hold but at least you know you can say yeah I thought about this I've got some ideas on how to handle it so you know I want to give people a dose of realism sometimes it's a smack of realism but but also you know also just and some education around it just so that they are prepared because I obviously want to see them succeed I want to be able to proudly show off my clients on my website and see them be in business for many many years because that makes me look great too so I'm kind of bringing people back to the ground level but pumping them up at the same time great and I guess and it is like a how long is a piece of string question but what's your general contingency how much do you think that the average business owner should have percentage wise squirrel to weigh in the bank or wherever wherever it's easily accessible for those unprepared expenses or opportunities three to say have you done operating capital three to six months of operating capital interesting because I just found that with my business I got to the point where I realized that the only way that you can grow is to have money and this wasn't just buying more stock it was growing my business knowledge and putting a new fit out in the store all those things that if I had someone like you I probably would have planned for but you can't do that on turnover alone and I guess this is one of the things that I try and say to people is your business can grow on turnover but you can't have massive growth on turnover alone unless you end up with some fantastic products that you can produce for nothing and sell for a fortune generally speaking at some point in time you're going to have to borrow to expand and that's what people forget about they forget that this far in I'm going to need to hire some people and I'm going to I might need a warehouse and I my overheads will increase because if I've got more stuff I have to pay more workers compensation and more separation and all those sorts of things and you know that your business is growing but you can't actually afford to make it grow so one of the that's one of the things that I found so I had to go and sell off an investment in order to grow my business which was my choice but if I'd known at the beginning when I still had a really nice well-earning job I would have taken a hundred thousand dollar loan answer so I didn't have to do that yeah it's a it is it's really important to have some of that capital set aside and if you can if you can build up your the retained earnings in your business over time that's great because that money can be reinvested for when you do hope to expand but a lot of times in industries where the net profit margins are quite low it's not as easy to keep that much retained earnings in the business so I say to people three to six months of operating capital six is better because if you if you can do a quarterly review and after three months look back and realize that you're screwing up or something is super wrong but you still have three months to fix it before your cash is gone so I tell people six months is ideal great well that's that's one of my key things to keep in mind so now that we've got the business plan do you have any tips and tricks of taking it to the bank or to your partner or venture capitalist or if we're taking this proposal to yeah pump yourself up as a business owner I think a lot of people downplay their own experience and their ability to run your bit their own businesses they they go in and they say well you know I've got my plan and this is kind of what I'm gonna do and this is how the rest of the industry does it that doesn't really set you apart as a as an entrepreneur investors especially they do invest a lot in the person behind the business so they want to be really confident that you're going to work as hard as you say you will to actually grow this thing so I think pump up your your own management skills and your strengths as well as acknowledge your weaknesses and this is something a lot of people don't do because they're afraid to say that they have weaknesses but if there's something about your company or your industry that you don't quite understand or you're not that good at acknowledge that and then tell them how you're going to deal with it and that that is the big thing is knowing that that is something that you need outside help on and once as an investor if I can see somebody says I'm not very good at this but my plan is within X amount of month to take someone on board who is at least you know that that person has got their crap together they know they know what's going on in their business they know what they are greater what they're not greater and what they're going to spend their time on yeah I think that that's really key especially when you're looking for an equity partner okay we're getting close to time so just quickly I'd love to know how you how do you set about what you want to achieve in the coming months or quarters or years what's your planning process of how you're going to get stuff done in the new future well I have kind of an eight step process and it was something that I've been doing for a while without really realizing that I was doing it and I finally taken the time to formalize it and actually I just launched a business planning challenge program where I've been started to introduce this process to people but I start with like I said at the very beginning the mindset make sure I'm in the mindset to to really think strategically about what I want to do for the coming year I try to choose one big problem that I want to work on solving for my customers then I review my ideal customer make sure that's still the person that I want to work with then I start setting some goals so that's set for big goals and then smaller objectives within those goals that help me get to the bigger goals then I look at a budget for that so I go back to my six expenses for the last year what did it cost me to run my business is there anything that I need to change and based on the goals that I have for this year do I need to incorporate more money in any of my budget categories in order to be able to reach my goals so that's step five. Step six is metrics I pick four things each year that I think are the most important things I need to measure in my business so this year one example of that is I'm trying to grow my list with Facebook ads that's really important to me so my metric is my cost per conversion that's the most important thing I need to be able to get that cost per opt-in down as low as I can so that's what I'm doing so four metrics don't do too many because then you get stuck measuring all kinds of stuff you don't need to measure so four is good then I sit back and say are there any resources that I need to help me achieve these goals so I'm trying to another goal I have is to build up my affiliate revenue but in order to do that I need the resource of a virtual assistant to do the social media scheduling for me so I'm saying okay so I've got my big goals what resources what people what tools do I need to help me get there and then I start setting deadlines the worst thing you can do is on January 1st set yourself a deadline to reach all your goals by December 31st because you know when you're going to realize you didn't reach them that'll be right around December 23rd when you're drinking a cup of eggnog and all of a sudden you have to ditch your family and go to the computer and go holy crap I got so much to do in the next eight days you don't want that to happen because you have to feel that you would change something exactly so I said timelines throughout the year for each one of my goals so I might have like a quarterly one and something to check in at the half year point and and on and on so that I have sort of a milestone that I'm expecting myself to reach at different parts the year so it doesn't get overwhelming and then once I've done all that I just bring it all together I write it all down and I just read it from start to finish and ask myself does it make sense and if I'm working with a mentor at that time I'll give it to them too and say does this make sense to you because it makes sense to me and then if it does then I just implement it and then I just keep I keep looking back at that little planning process that I did at least once a quarter but I think even once a month is good if you can't to just make sure you're on track with everything you want to do so it's kind of an eight step process I can I can send for your readers or if you have show notes I can send you a list of those steps that would have a be great we'll pop those in the show notes and I know you just ran the business planning challenge and it's obviously finished for now but is that something that you're going to run on a continual basis like on a quarterly basis so if the people who are just hearing about this now can come in on the next quarter and do their planning or is that a sort of a fine a calendar year I will definitely run this specific challenge next year but I am going to roll a lot of the concepts into a business start-up program that I'm hoping to launch in March so if people jump on my list at renegadeplanner.com/free they will be the first to know about it when it's ready and we'll put that link up in the show notes as well now I'd like to finish on my my generic question well it's not generic but it's the question that I love to hear the answer to which is when you walk into a store what makes you go wow organized chaos I like treasures I like I like digging through stuff so I'm one of those shoppers who I want to find like that special deal that's hidden under all the other stuff that everyone else was looking at so I like to be able to dig out treasures so I don't like my store did look too refined but I want lots and lots of stuff in there that I can dig through so if I walk into a place and I see some unique items right off the bat that I wouldn't see at a regular you know big box store and if that store kind of welcomes me in and it's very inviting and wants me to come dig around then I'm like yeah I'm right in there but I think it's huge for me but I think I mean more generally for any any store that I go in is the lighting the lighting is so important to me before so that's interesting what is it about the lighting well you know some stores are they use that fluorescent light you walking you feel tired within like 30 seconds and you look terrible in the change room and so bright and you yeah you see yourself in a mirror and you're like I get the hell out of here and go to the gym this is bad um I don't like that but and then other stores are so dark and they try to make it like you look into a nightclub it's like but I can't see your merchandise so I look for warm inviting light that that kind of says yeah come in and check out our stuff fantastic well if you need some help creating a business plan or if you want to grab access to some of the free stuff that Jessica has head on over to the renegade planner.com and we'll pop that up in the show notes but thank you so much for spending your time with us today Jessica it was great to have you on board and I I've actually made three pages of notes while I was chatting to you so I've got a whole bunch of stuff swimming around in my head and I'm sure everybody else does too cool thanks so much that was really fun thanks a lot see you later thanks again for joining me on today's episode with Jessica Omen from the renegade planner. There was a ton of really useful stuff in there and if you missed it that's okay you can go back and play the podcast again or you can head over to selenenife.com/podcast/three where you can find all of the information some links the resource that Jessica was talking about and you can head over to her website and see all the things that she has to offer now of course if you've loved this episode or if you know somebody that needs some help with their business planning or even just needs a refreshing look at where they're out in their business send them across to the podcast you can also head on over to Stitcher and iTunes and leave a review and if you'd like to know how to do that you can see that on the website selenenife.com/review or I'll show you a step by step guide on how to leave a review and I'd love it if you do so until next time don't forget next next episode will be the start of the four part series on outsourcing so I will see you then thanks a lot have a great day. [Music]