By Alexis Austin, CEO of Right Law Groupa Colorado Springs criminal defense firm helping people find the right path to a brighter future.
Building a successful business plan that supports your desired lifestyle requires a thoughtful and intentional approach, but it doesn’t have to be difficult or overly complicated. In less than five years, I grew a criminal defense law practice from nothing to generate over seven figures. In that time, I have learned that the key to success lies in determining where you want your personal life to be and working backward to pinpoint what needs to be done in your company in order to get there.
1. Start with your personal vision.
The first step is to create a vision for what you want your personal life to look like in the short term and long term. Write out your goals for one year, three years, five years and 10 years. This includes determining what kind of lifestyle you want to live and the financial resources required to make it a reality. Consider your personal goals and aspirations, such as owning a home, traveling or starting a family, and attach financial figures to each of these goals.
This will give you a clear idea of what you need to earn in order to achieve your desired lifestyle. Assign specific monetary amounts to each goal you have and break it down to the monthly payment amounts required. Add up those payments for the month and then you have your personal monthly income goal.
2. Work backwards to determine business goals.
Once you have a clear understanding of your personal financial goals, it’s time to work backwards to determine what your business needs to achieve in order to support those goals. Look at the percentage of gross revenue you are currently earning personally from the company. Use that number to extrapolate—using the same owner percentage—what the company revenue must be in order to achieve your desired personal income annually and monthly. From there, break down your company’s annual financial goal into monthly, weekly and even daily targets. Using tools like spreadsheets can help you track your progress and make necessary adjustments along the way.
3. Determine the value of your product or service and monthly requirements.
One critical aspect of building a successful business plan is determining the value of your product or service and then determining how much you need to sell each month to reach your goals. This can be achieved by examining the average value per product type in your company and how many of each product type you would need to sell in order to meet your monthly income requirements.
For instance, to calculate my service costs in my criminal defense practice, I determined the billable hours required for each staff member to work on a DUI case, then multiplied that by five to achieve five times the return on investment, which covered the cost to produce the service, covered overhead and marketing expenses and allowed for a healthy profit. I did this for each specific type of criminal case my firm handled. This helped me determine the price point for each case. From there I was able to calculate the number of cases needed to achieve my revenue goals monthly and set a team goal for new cases required each month.
4. Factors in marketing and staffing needs.
Marketing and staffing are two important considerations when building a successful business plan. Determine the marketing strategies that are most effective for your business and allocate a budget accordingly.
A good rule of thumb is to budget to use 5% to 10% of your gross revenue for marketing. This may include investing in digital marketing, hiring a marketing specialist or attending industry conferences. Staffing needs should also be carefully evaluated to ensure that you have the right team in place to achieve your goals. Look at the products or services you calculated above to determine your staffing and marketing needs.
Determine how many people you will need in order to produce and maintain excellent customer service. Anticipate their salary and add that number to the budget. Remember, adding these salaries may increase your costs which may lower your net profit (ie, your owner takes home). Be sure to recalculate as you go to ensure that you have the appropriate number of products/services provided as well as the staff to result in your desired company income.
5. Remain flexible and open to change.
Finally, it’s important to remain flexible and open to change as you implement your business plan. As seen above, making adjustments may affect your ultimate goal number. You can also project a gradual increase, as going from $500 a month to $50,000 a month is a substantial jump and will require appropriate systems and procedures in place to manage the workload, not to mention marketing efforts to bring in the required work.
Monitor your progress regularly and be willing to make adjustments as needed. This may include shifting your marketing strategies, adjusting pricing or hiring additional staff members as you go. A successful business plan is one that is constantly evolving to meet the changing needs of your business and your personal life.
In conclusion, building a successful business plan that supports your desired lifestyle requires a clear vision, a thorough understanding of the value of your product or service, careful consideration of marketing and staffing needs, and a willingness to remain flexible and open to change. By taking a thoughtful and intentional approach, you can achieve your personal and professional goals and build a thriving business that supports the lifestyle you desire without using any fancy tools or products. All you need is your imagination, a spreadsheet and time to map out the plan.