This guest post is by Adarsh Thampy of ConversionChamp.com.
Do you know what the biggest mistake is when starting your own blog?
I’d argue that it’s probably lack of proper planning. At the starting point, you should consider writing a business plan for your blog.
“A business plan?” you might ask. “A blog is not necessarily a business!” I have guest posted over at branding personality about this topic. Blogging is a tool to promote your business or brand. So it’s essential that bloggers too have a business plan.
One of the successful entrepreneurs I respect the most, Neil Patel, is not a big fan of business plans, and he’s written about why you shouldn’t write a business plan in the first place. However, the plan I am talking about in this article is not based on any traditional models. Most people search the Internet to create a business plan and finally give up. It’s probably because they find it too difficult. I have to agree with this feeling: writing a business plan is no walk in the park.
But there is good news for people looking to start a blog, who want a plan that’ll help.
Unlike traditional business plans, the one you need to create for your blog is fairly simple. You don’t have to worry about structure, wording, or content. Your business plan will be short and easy to prepare.
Why do I even need a business plan?
All entrepreneurs know they need a business plan. But not many know why they actually need one. If I am talking on a high level, I can say that it is needed to acquire venture capital, optimize business operations, and so on, though I bet most bloggers never even remotely think of such things before they start a blog.
In layman’s terms, here’s why you need business plan:
- It can give you an overall idea about your business (even before you start one). This makes sure that you approach blogging from a business perspective, and not just the mindset of content creation alone.
- You will have a better understanding of the requirements of your business. (Can you provide consulting through your blog? Or how is it that you are going to make money from it?)
- You’ll have a better overview about cash flow in your business. (Cashflow is nothing but how and when money comes in and goes out). How much are you going to invest in your blog, and how much do you expect it to make over a given period of time?
- It encourages you to take a more realistic approach towards your business.
- It helps you discover the challenges that lie ahead for your blog and the business associated with it.
How to prepare a business plan for your blog
Here comes the good part, and I must say that it’s actually fun too.
To create a blog, you’ll have to do research on your target market, figure out the operational and start-up costs, and so on. So why not document those things along the way, in a business plan that guides you, and provides a reference for the future?
Step 1: Business idea
In this section, you will have to note down what your business idea is. To make it more fun, write down how you actually zeroed down on your business idea. Make it short: don’t go over one page. In fact, try not to go over half a page.
Example: “My business idea is to start an online store which will sell superman merchandise to kids. I wanted to do this since my children love Superman toys and there isn’t any store that exclusively sells them online. I can entertain my kids as well as make some profit. I’ll use my blog to engage my customers and build a loyal following.”
Step 2: Business requirements
What does your business or blog require to get started? What is the timeframe in which you expect each task to be completed? It’s good to make an Excel spreadsheet and paste it into your business plan so you have all the information in the same document.
Don’t include costs here. When it comes to the timeframes you’ll need to factor in, be realistic. Optimism is good, but your business decisions needs to be based on facts.
Example for small blog business: “My online store will be ready in approximately three months’ time. I’ll also need the help of some web designers and developers to build my online store. Then I need to get a decent hosting for my business website.
“I will spend three hours a day on this project, as I have a full-time job as well. For my blog, I’ll write the contents. I’ll also hire an editor to manage the content of this site (and occasionally contribute to it while I am busy with my main business).”
- “Designing the site: 15 days (I am smart so I’ll use the StudioPress theme for my blog—the one that powers problogger.net)
- Coding for the site: 45 days
- Tweaks: 5 days
- Setting up merchant account with : 5 days
- Getting necessary stock: 10 days
- Planning for the launch: 1 day
- Hiring people to maintain my business: 10 days”
“So that makes it a total of around three months for the site to go live. I’ll also need to put some money aside for this. I think I have it in my savings account. If not, maybe I’ll ask my wife really nicely.”
See how I broke down the requirements into smaller requirements? This makes it easier to adjust your plan if something goes off track. Also, don’t try to be formal in the way you phrase things. Your business plan is for your reference, not for someone else.
Step 3: Business model
There are many business models you can choose from. Normally for ecommerce stores, the business model is kind of traditional: you make a product, then customers pay for items they want. But in certain businesses, the model may be different. For your blog, your business model might be selling services, selling other peoples products for commission (affiliate marketing), or something else.
Whatever it is, make sure you have a very clear idea about how you are going to make money from your business. This is very important.
Example 1: “I’m going to use my online store to sell products. I will get product from <insert your vendor here> for a nice discount if I buy in bulk. Then I will sell it for a slightly higher price.
“My payment processor will be Google checkout. I have set to receive weekly payments and they will pay straight to my bank account. I will also sell customized services through my blog.”
Example 2: “I have a blog on health and wellness where I post articles on health-related issues. So, my main income source would be Google AdSense. Whenever user clicks on an advertisement on my site, I will get paid. The payment threshold is $100 and I will receive checks via mail when I reach that threshold.”
You need to document this business model very clearly. This will ensure that you do not lose focus on your end goal.
Step 4: Finance
In this section, you need to focus on the start-up costs as well as the running costs of your blog, and your business. Do some research and find out how much it will cost you to keep your online business going.
Again, this is very important as it will help you get an overview about business cash flow and profitability.
Example: “My online store will require the following to get started.
- Domain: $30 (Registered for three years with Namecheap. Billing is every three years.)
- Hosting: $85 (Registered with Hostgator for a year. They will bill me yearly.)
- Design: $250 (Paid a freelancer for the excellent design. Was delivered in PSD format as well as JPEG.)
- Coding: $3000 (Will pay another freelancer with good reputation on Odesk. Work will be completed in 45 days from start of payment.)
- Miscellaneous costs: $250 (Includes a launch party for my friends.)
- Domain: $40 (Every three years)
- Hosting: $85 (Every year) [Note: I may need to upgrade to a more expensive plan as my site grows]
- Shipping costs: $5 (per shipment)
- Promotions and discounts: Vary from 2% to 10% discount depending on the market conditions”
This is just a small example. In some cases the finance required might be very small; in some cases it’ll be huge. If you want to factor in your time as well, then you can come up with an hourly rate that reflects your work, and put it in the operational cost section.
Also note that the running costs will vary over time. When your blog starts getting popular, you might need to move to better hosting, or you might need to develop more features, which will require a larger investment of money.
Step 5: Business goals
In this section, you need to set business goals. Make sure they are achievable. Relax your goals a bit. It’s better to achieve a small goal rather than fail to achieve a big goal.
Example 1: “I need to break even in one years’ time. In another year, I will expand my collection to include more toys. After three years, I will launch my own brand of toys. My goal for profits is 0% the first year (that is, I’ll break even), another 5% the second year, and increase by 2% in the coming years.”
Example 2: “Right now I am going to start with just my blog and offer consultation services. Later on I will be adding informational products. So I expect to break even in one year, get a minimum of 1000 subscribers and land two or three consulting gigs. I also want to set a monthly traffic goal of 25,000 site visitors by the end of year one.”
You need to constantly refer to your business goals so that you do not lose focus.
Step 6: Operational model
You need to figure out how you’re going to run your business. Is it a one-man show? Are you going to hire employees to manage certain tasks?
Example: “Here is how I plan to operate my blog and the business associated with it:
- Work part-time for three hours a day during the first six months.
- Write content myself. My blogging schedule will be to post three articles each week.
- Quit my full-time job and work 12 hours a day for my site for the next six months.
- Allow guest posts from the sixth month onwards. Hire an editor to take care of managing the guest posts.
- Hire an accountant to maintain records so that I can easily file my tax returns.
- Hire marketing people to take care of site promotion, or do site promotion myself.
- Teach my wife how I run this business and ask her to take on some of the roles.”
Step 7: Marketing strategy
Here you will define how you’ll market your business. Don’t go into depth while laying out your marketing strategy. Marketing strategies vary greatly over time. In the early 1900’s no one would have thought about marketing online. Yet, now online marketing is one of the best ways to get customers for your business.
Put in the main points and leave it at that—you can always revise the plans in more detail as you come to put them into practice. This will also help you evaluate how your previous marketing strategy helped you, and how the new one is doing.
Example: “I am going to promote my online store in the following ways:
- Use blogging as a powerful content marketing tool. Create awesome content and post it on my blog. This will attract a loyal audience.
- Hire a good SEO consultant/learn SEO myself.
- Ask friends to recommend my site to others.
- Buy a small ad in my local newspaper about my online store.
- Write articles on related sites for free, in exchange for a link to my site (guest posts).”
Step 8: Exit strategy
This is something not many entrepreneurs want to think about. An exit strategy is something you use when you want to close your business.
People don’t want to think about it because it spreads a negative vibe, and you don’t want anything negative in your business. However, you certainly need an exit plan.
Most entrepreneurs never make an exit strategy the first time, so if their business or blog isn’t as successfully as they’d hoped, they get disheartened and quit. If you have an exit strategy, you can save all the stress and exit gracefully. I have personally started around ten blogs and only few of them were successful. I lost several thousand dollars initially because I did not plan on a proper exit strategy.
Example: “In the rare case that my business fails or I decide to quit my business, here is my plan:
- I will try to sell my business online for what it is worth at the time.
- I will cancel all services associated with my business.
- Customers will be informed of the business’s sale well in advance.
- I have kept a reserve amount in my bank account should anything bad happen.
- I will take a break for one month before I venture into another business again.”
A blog business plan in 8 steps
So there you have it: eight steps and you’re done. Now you have a well thought out, personal business plans for your internet business.
I highly recommend that each year you review your business plan and create a new, more specific one for the coming 12 months. The old one should be kept to provide a yardstick against which you can manage your business growth, chart the change in strategies, and so on over time.
Have you created a business plan for your blog? Let us know how it’s helped you in the comments.
Adarsh Thampy is a blogger, inbound marketing consultant for small business and a SEO guy. He writes about getting more customers for your business over at ConversionChamp.com. You can add conversionchamp to the Google plus circle.