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planIn part 1 I discussed how to identify your future business. In this second post, I’ll teach you how to set up a business plan.

Here’s a secret: you don’t write business plans for the bank. Nor for Venture Capitalists. You write a business plan for you. At this point, I can hear you say ‘but I got everything in my head, what do I need a business plan for, then?’ You’re partly right. The stuff is in your head, but it needs to come out. When you have all your ideas and plans layed out in front of you, things will become clear. You’ll get aware of problems and their solutions, and of new ideas.

So how do you write a business plan?
There is a ton of business plans and business planning software online. You’d do wise NOT spending any money on them. Since you are making the plan for yourself, there’s no right or wrong. As a guide, here’s what business plans usually consist of:

  1. A description of your business
  2. Marketing
  3. Finance
  4. Management

1: A description of your business
State here what your business is all about. What are you going to sell/offer? What need does your business fill?

2: Marketing
To me, this is the most fun part. How are you going to get people to sell your product/service? I highly recommend Perry Belcher‘s blog and Seth Godin‘s blog for inspiration No wait, make that mandatory reading!

3: Finance
The financial stuff. What do you need to buy, and how much you have to sell to get profitable. If you’re writing for a VC, this part is super important. If you’re a roach, don’t spend too much time on this. How the heck can anyone predict how much you’re going to sell in three years?

4: Management
In regular business plans, this is where you put bio’s, backgrounds and data of your management team. In your case… that’s right.

If you need an outline of a ‘real’ business plan, check out this link.

One last tip
As you write your business plan, it’s inevitable that you come up with new great ideas. The key is to stay focused on your original idea. If you don’t, you’ll end up chasing one dream after another, not finishing even one of them. Write down the new ideas, but stay focused.

hurryWhile procastinating a dull task, you might as well check out these blog posts:

Business ideas
Seth Godin: which comes first, the product or the marketing?
Small Business Blog: startup ideas: holiday decorating
Microsoft Small Business blog: from hobby to home business
Noobpreneur: why you have to do business online (part 1)
Noobpreneur: why you have to do business online (part 2)

Resources
Seth Godin: How to make money with SEO (or: how to be no. 1 on Google)
TechTreak.com: 25 best Photoshop logo design tutorials

Marketing
Perry Belcher: why customers won’t sleep with you on the first date
Perry Belcher: get a 33% opt-in rate for your newsletter

Do you know of another useful blog post, or do you want me to cover a specific subject? Please share!

boredThere are numerous things that you can do at your paid dayjob that will help you startup your own company. You can use your company-issue desktop computer for all of them. To help you get started, I’ll name you 5:

  1. Learn HTML. There are so many online courses on the internet and several good free HTML editing software programs. Take advantage of these, and save money on website design!
  2. Build a network using Ning or Linkedin.
  3. Keep up with the latest news. Outlook has an exellent RSS reader built into it. Subscribe to your favorite blogs and receive all that useful information in your mailbox. It’ll look like you’re actually working!
  4. Conduct market research, scavenging the internet for useful information
  5. Write your business plan

So… the next time you’re procastinating (that’s putting off) one of your boring tasks, take advantage of that time. Plus: to your boss, it’ll seem like you’re actually being productive. It sure beats patience!

So you’ve decided to roach your startup: doing everything during your day job. Congratulations! There are a couple of steps you have to take:

1. Identify the business you want to start up
2. Write a business plan (during work hours of course!)
3. Making your first sales
4. Growing your roach

This time, we’ll discuss the first step: identifying the business you want to start.

learnWhat business is suitable for roaching?
Any business that is not overly costly to start (i.e. no large initial investments) and does not require you to be physically around a lot (at first) is suitable. Anything that has to do with internet is a good choice.

So where do I start?
Here’s the thing: get proficient. In social media. In internet. In design. In programming languages (HTML, PHP, Ruby, ASP. The technology doesn’t really matter, it’s just a means to an end).  These are things that take time to learn, but are doable. And, of course, you can learn them during your day job! Maybe you can even get your boss to pay for a course, but there’s a load of good tutorials out there, too.  I’ve included a bunch of links on the bottom of this article for you to start with.

You’ll see that when you get into these things something will emerge from your brain. Maybe you’re good at designing, or maybe you got this crazy idea of a social media networking website that nobody thought about yet. Also, you’ll be able to build your own website and design your own stationairy.

So far, you haven’t spent a dime yet, which is good! Next time, we’ll discuss making a business plan. Should you? If yes, how?

Some links to help you get started
Photoshop tutorials: 1, 2 and 3
Illustrator tutorials: 1 and 2
Adobe software on education license
Learn HTML, PHP, Ruby on Rails
Get a free HTML-editor (also for other programming languages)

Ethics of roaching
signpostStarting up a business while at your job doesn’t sound really ethical, right? You’re getting paid to do your job, sbut you’re NOT actually doing your job. That’s like, slacking, right? Even worse than slacking!

Well, no. First of all, slacking isn’t that bad. This article from CNN Money points out that slacking is a way to recharge your batteries, come up with new business ideas, and to strengthen bonds between co-workers.

The fact that you’re reading this blog tells me you’re not satisfied with your job. So, in terms of motivation, you’re at the bottom end of the spectrum. You procrastinate every menial, pointless task your boss hands you, and you count down the hours until the day is done. I know, I feel exactly the same. So here’s the deal: when you know you can do so much fun and important stuff for your own startup, you don’t delay your day job tasks. You do them first. Or, even better: when the boss is watching. Look at it this way: are you getting paid to work for a certain amount of hours, or are you getting paid to do a certain amount of work?

Calculating risk

Roaching or starting up your company the old way: pros and cons
  Quitting your day job now Roaching your startup
 
Time You have more time on your hands. However, you’ll probably work day and night to grow your business as soon as possible, creating a big dent in your personal life. You can’t do it all during work hours, but you can do most of it. Sure, you’ll work some evenings, but you can distribute the available free time evenly between your startup and your personal life.
 
Freedom Ah, the freedom of not having a boss anymore… Yeah, it sucks having to work your day job longer. But trust me, you can face the criticism of your boss a whole lot better knowing you’re working on your dream in his time…
 
Money Money is tight. Maybe you got the loan from the bank, but these times banks aren’t too happy lending out cash without any form of security. And without the steady flow of income, getting groceries or paying the vet gets kinda, well, anxious. On the plus side, the best money in the world is the money you’ve earned with your own business. Steady flow of income, securing your lifestyle until the point your startup can take over. Downside: it’ll take longer. Plus side: you won’t have a (big) debt.
 
Security Virtually nonexistent. No security of income and, unless you’re willing to pay big bucks for it, no insurance whatsoever. Security of income and insurance

Which one would you choose?

Roaching it

roachWhat exactly is ‘roaching your startup’?

You’ll find a ton of websites out there that teach you how to start up a business. Usually, they follow the same steps:

  1. Think about the type of business you want to start
  2. Write a business plan
  3. Raise enough money to start
  4. Execute the business plan
  5. Make money

That’s just grand, if you’re a genius grad student who still lives with his parents. Real people have jobs first, and decide somewhere along the way to start up a business of their own. At that time, you probably have a real life: a job, a mortgage to pay, maybe a family to provide for. Starting up a business isn’t exactly easy.

Calculated risks
Any arrived entrepeneur will tell you that taking risks is part of the business. I totally agree: taking risks and being fully responsible is one of the things that attracts me so much. But, it’s all about taking calculated risks. Now let’s suppose you follow the 5 steps above, and let’s just suppose the bank says ‘yes sir, here’s $ 200,000 for your plan’. You’d have to quit your job, losing not only your monthly source of income, but also your 401(k), medical insurance, dental plan, etcetera. All this without knowing if your plan is going to work out. If it does, good for you. If it doesn’t, you’re in trouble. Not only will you have a giant debt, you don’t have a job to pay back the debt, and chances are your wife has filed for a divorce and a restraining order as well.

Roaching it
My idea is to start up a business during my day job. Now my day job isn’t particulary demanding, so if I work a little harder, I have enough time on my hands to accomplish this. I’ve somewhat amended the 5 steps I mentioned earlier:

  1. Think about the type of business you want to start
  2. Write a business plan during work hours
  3. Save my earnings to pay for expenses
  4. Execute the business plan during work hours
  5. Make enough money to quit day job

I’m using my own money to pay for expenses. This is called bootstrapping, something I’ll write about later on. The process of creating a business during your day job I call ‘roaching’.