Business plan
From Principles of Applied Arts
Back to Business Articles
This page is an example business a strategy. From this strategy you would then compile a plan on how to accomplish these objectives by mapping out the tasks needed to act out the tactics and meet your objectives.
Contents |
Mission
A mission statement should be a concise answer to the question "What you are and what you do"
- Example: Become the owner of the most simple, efficient, and specialized decorative painting business in the world and make a profit.
Vision
A vision statement should be a concise answer to the question "What you wish to gain and what you will do with it" Make profits and spend them on my hobby, which is learning all there is to know about decorative painting.
Objectives
The same as goals your objectives are what you have your sights set on and what you want to accomplish. The idea of mapping them all out is to give yourself a clear and consice road map to your goals and to avoid the 6 P's (Piss poor planning leads to piss poor performance) </p>
- Example:
- Objective 1 Offer the most comprehensive and efficient business system to my customers
- Tactic 1 Make rules of engagement i.e. 3 day-3week-3months
- Task 1 Rewrite the Telephone Protocol for FDC Client†document to fit my own business (Use all paperwork Andre provided (modify to fit my business)
- Tactic 2 Make portfolio to illustrate process with case studies
- Task 1 Finish three rooms and take before and after pictures and making sure I have samples of fabrics, tile, etc.
- Task 2 Decide on a portfolio type and acquire it
- Task 3 Spend time on making the coolest portfolio illustrating my business process
- Tactic 3 Make a document that tells your clients how you do business (Example)
- Tactic 1 Make rules of engagement i.e. 3 day-3week-3months
- Objective 2 Make a comfortable living at decorative painting
- Task 1 Define start up costs and create a budget for marketing materials, painting tools, painting mediums…)
- Task 2 Define what we offer to the public that makes sense for our profit margin
- Task 3 Define the amount of work we need to stay afloat
- Task 4 Define personal income/daily wage, Annual Personal expenses / working days and additional entertainment expenses
- Objective 3 To know the working numbers of a successful business
- Tactic 1 Calculate business overhead/ daily for bidding (consult and accountant!!!)
- Task 1 Calculate out insurance
- Task 2 Calculate home to business usage
- Task 3 Calculate auto expenses
- Task 4 Calculate misc. office expanses
- Task 5 Calculate marketing expenses
- Task 6 Calculate annual disposable products
- Tactic 1 Calculate business overhead/ daily for bidding (consult and accountant!!!)
- Objective 4 Create a system for tools and materials
- Tactic 1Analyze all used materials and tools, refine them or acquire them and organize
- Task 1 Build daily tool/inventory check list
- Task 2 Create system for transporting tools daily
- Task 3 Create an ordering system for mediums and supplies
- Task 4 Assess materials and tools available locally
- Task 5 Create relationships and set up accounts with paint stores
- Task 6 Review online resources
- Tactic 1Analyze all used materials and tools, refine them or acquire them and organize
- Objective 5 Map out profit strategy and growth budgets
- Tactic 1 Set product and services markup and set aside profits for each job to build budgets.
- 'Task 1 Set profit range for business
- Task 2 set up company savings account
- Task 3 Place profit in savings account each job
- Task 4 Make a list of growth compartments (tools, education etc...)
- Task 5 Perform year end assessment
- Task 6 build budgets and allocat profits to growth strategies
- Tactic 1 Set product and services markup and set aside profits for each job to build budgets.
- Objective 7 Make the best portfolio ever known to man
- Tactic 1 Follow the sugestions made in the first interview section of the Principles curriculum
- Task 1 Define 3-5 rooms to do before and after pictures (in house or jobs) (cases studies)
- Task 2 Gather inspiration photos and arrange them in binder?
- Task 3 Gather previous conceptual boards from classes or jobs
- Tactic 1 Follow the sugestions made in the first interview section of the Principles curriculum
- Objective 8 Market effectively to get customers with continuity
- Tactic 1Make a strong brand
- Task 1 Study personal or company branding
- Tactic 2 Make printed materials
- Task 1 Identify markets and demographics
- Task 1 Design business cards, letterhead, brochures etc... that appeal to those demographics
- Tactic 2 Build a website that reflects your brand and marketing strategies and market that website
- Tactic 1Make a strong brand
Crunching the numbers
In order to assess the viability of your business it is a great idea to get into the habit of crunching the numbers for your business. You should not only do it at the start up but then also find an accountant that will meet with you every quarter to look at how things are going. There are five components to monitor in your business and they also are reflected in your bidding process as well.
- Materials
- Labor
- Overhead
- Commissions (To designers or other sales people)
- Profits
Example number crunching You may already have in mind a target number for what you need to make for your personal expenses this will translate into your labor costs. You may not want to take a large salery so you can avoid paying too much income tax. Make sure you are not thinking of profits as your wage they are completly seperate and may people make the mistake of not seperating them out and consiquently your busioness will not grow and you will be using your personal wage to correct mistakes in your business and this can grow tiresome and quite costly. Lets crunch some numbers together. As an example you would need at least 6 jobs per month at a $1,000.00 each to equal a gross income of $72,000.00 a year. Your can figure your average materials cost can be about 15% putting your materials costs at $10,800.00. Lets say you need to make at least $30,000.00 to cover your personal expenses so you allocate that for your wage. If you are running a full time studio out of your house and figure out what percentage of the bills are for your business you may find a great number for your overhead. Don't forget things like the phones, gas, electricity etc. After you figure it all out your overhead may come to about $100 per day, so if you figure out that you are going to work about 220 days per year that equals $22,000.00.
Add up all of your expenses and then subtract this from your estimated gross to see if it looks like you will be making profits.
- Expences
- $10,800.00 Materials
- + $30,000.00 Labor
- + $22,000.00 Overhead
- + $0 Commissions
=$62,800.00
- $72,000.00 Estimated gross
- -$62,800.00 Estimated expenses
=$9,200.00 Estimated Profit
These particular numbers sound quite good because your salary, materials, and overhead is paid and you still have $9,200.00 left over in profit. The profit is what you will spend if you make a mistake and have to fix it. Or profits can be budgeted at the end of the year for growth strategies like buying new tools or taking more classes.
When you are bidding for jobs or when writing the proposal remember to factor in the five components and every job when you get paid put your profits into a separate savings account so you are not tempted to pay yourself a bit extra that week.
Defining your clients:
You should be asking yourself these questions all of the time
- Who are my clients?
- What are they buying?
- Where are they shopping ?
- Where are they hanging out?
- How to I get in contact with them?
To read further on this subject read the PAA chapter 1.0 textbook
