The importance of a business plan: getting your ambitions in focus
Freshly graduated, full of big plans, but lacking a clear direction? Making a (business) plan could be a solution. It's a way of taking a serious and critical look at your own ambitions and aspirations. How do you go about making a plan? What are the conventions and the pitfalls when writing one? In the coming weeks, Tim Bongaerts and Lars Meijer will be publishing a series of articles with only one goal: moving your entrepreneurship forward with practical tips.
Our first association with the words "business plan" was money. It wasn't immediately obvious to us what the added value would be for an artist. What does art have to do with plan-writing? A lot more than you'd expect, we found out during our research. A business plan is more than a list of your ambitions: it primarily challenges you to think about how you will realize your plans. Making a plan will help you develop your ideas about your art. How does your work get to customers, visitors, the public? In addition, clarifying your goals is very useful when writing to potential funding bodies or subsidy providers. A well-developed plan reassures them that their money will be well-spent.
Still, we have some nagging doubts. Seeing art as a business doesn't come naturally to most of us. Thinking in terms of profits, target audiences and market analyses feels a little peculiar. Nevertheless, if you're trying to work as an independent artist, a business plan is indispensible. We spoke to Jessica de Jaeger, entrepreneurship teacher at the Dance in Education program at ArtEZ Arnhem and self-employed worker in the arts. She said she encounters the same ideas or misconceptions in every class she teaches about writing a business plan:
"You primarily write a plan for yourself. I often see people prioritizing money as a motivation, writing a business plan for a fund or subsidy. What should I write to get the money? It doesn't work that way. It's important to think about why you want to start this business or project. You can use a few simple questions, like: "Why do you get up in the morning?" or "What keeps you up at night?" or "What's important to you?" Although you'll have to dig deeper than "I want to do this because it's fun", pretending to be all corporate won't get you very far, either. Start with own motivations, that's what works best."
We asked Jessica for some more tips and tricks, so you can start working on your business plan with confidence. We collected and sorted them all here for you:
Primarily for yourself... Many people think that business plans are written only for investors, but that's not true: they can be useful for the writer as well, to clarify your own mission and vision. What do you want to achieve? What are your ambitions in the long term? What do you need to realize them? Finding the answers to such questions will help your plans take shape. Remember that while you're making a business plan – it will make it easier.
... But also for investors. You also write a business plan to convince others to support you financially. You can do this using the method explained by Simon Sinek in the Golden Circle. He explains the success of Apple's corporate philosophy. Why are we more likely to buy an idea than a product?
Why you? Make sure you set yourself apart from others in your plan. Why are you the best candidate for this commission or subsidy? Why is your idea better, why will it draw more attention, why is the money in better hands with you?
For whom? Funders and investors also want to know who your audience is. For whom are you making your art? (And no: "myself" or "everyone" are not valid answers here). And how are you going to reach these people?
Business Model Canvas. If you're not sure how to start making a business plan, start with the BMC. This step-by-step system makes writing a plan a lot easier down the road. While the BMC is not a business plan by itself, it does contain all the elements that you should include in your plan!
Market research. A common pitfall when making a business plan is presenting an old idea as an innovative one. You should be informed about what's happening in your industry/discipline, so you don't sell old wine in new bottles. Also be aware who your competitors/colleagues are; you can learn something from them as well.
A business plan is not a concession. We've noticed that some people are convinced that writing down an idea reduces its value. But that's the opposite of the truth. The plan will give your idea a place in the world.
Writing a business plan can feel like a tall order. Maybe you don't want to do it because it seems so elaborate, or because you don't feel your idea is ready for a place in the real world. But at the end of the day, we think it's very valuable to have a background to your plans and an awareness of who's doing what in your field. A plan doesn't just help you convince funding bodies of your skills, but it also ensures you'll always know the next step in your process. Good luck!
More practical articles by Tim and Lars:
Who, what, where: finding your way around local initiatives
Guarding your time: when is enough really enough?
Standing strong: how to deal with (unreasonable) clients
Tips for effective networking: ‘let the words come by themselves'