3 Things Your Henna Business Plan is Missing
Once you’ve decided that you’re ready to take your henna skills from hobby to a legitimate business, writing a business plan becomes strongly recommended. Business plans are extensive living documents that accompany a business from its inception through its lifetime, providing guidance and clarity for the business owner. Today we’ll be covering three key components of an effective business plan that are often overlooked by henna artists.
Ideal Client Identification
The first thing that every business plan must have is a clear description of who your ideal client is. It’s possible that you already have some ideas regarding the demographics of your target market (and that’s great!), but ideally you’ll also be able to dive in deep with who your ideal client is: what they look like, how they behave, what motivates them in their life choices, and of course, what motivates them to make a purchase with a business like yours.
Knowing who your ideal client is simplifies the process of making decisions in your business because you know exactly who you're trying to serve and what their value system is. This clarity enables you to make decisions and to build strategy in your business with confidence, knowing that the direction that you're headed in your business is in alignment with the people who you want to serve.
A Thorough Market Analysis
The second thing that your business plan is likely missing is a market analysis. In order to complete a market analysis, you will fine tooth your local market and make an assessment of the other people in your industry who are serving the public. One of the great things about having strong competitors in your market is that every potential client has the choice to select your business, and by sizing up your competitors you can position yourself as the obvious selection. You’ll make a note of how those businesses operate, the services that they offer, their pricing structure, and the additional relative details of how their business exists within your market - and then you’ll analyze how you can do it better.
It’s worth keeping in mind that “better” is a subjective, and should always be considered from the perspective of your ideal client. You may have competitors within your market who are doing something very, very well and that you want to improve upon - only to find that the resulting service or process no longer serves your ideal client in a convenient or desirable way. An effective market analysis will expose gaps in the marketplace, making it possible for you to swoop in and fill those holes by providing the services and experiences that your ideal client simply can’t find anywhere else.
The third thing that you must include in your business plan is a complete outline of your revenue projections. Revenue projections are created by outlining how much your business can expect to bring in over a particular period of time - and how you’ll achieve this. By creating your annual projections, you can reverse-engineer how you're going to meet the anticipated milestones. Let's say you have an annual revenue goal of $30,000 with your with your henna side hustle. You would then have to break that down to reverse-engineer a marketing plan. In this example, you’d break this down to a six month goal of $15,000, a $7,500 quarterly goal, a $2,500 monthly goal which finally equates to a $575 weekly goal, approximately. With this outlined, you can then make a plan regarding which services you can offer to reach your goal. Similarly, this allows you to track your progress and determine how you might make up for any deficits in the year.
Revenue projections also keep you realistic. In our example, we are working with a $30,000 annual projection at part time status. Let’s say that your primary service offering were 15 minute sessions, and you price them at $30 per session. If you were operating within a limited five hours per week, then you could potentially serve around 20 people each week with this service. Assuming you were to book 20 sessions each week, you’d bring in $600 per week of net revenue (which would place you at $31,200 of net annual income). But let’s say that your 15 minute sessions were priced at $15 each - then you’d be faced with a dilemma. At this rate, you’d have the earning capacity of $300 per week ($15,600 annually) working five hours per week or you’d have to double your work time to 10 hours per week in order to accommodate at least 40 sessions.
Well prepared income projections will include both the confirmation of earning capacity as outlined above as well as a marketing plan for how you intend to reach your target market to secure these sales.
If you're not already working with a business plan, I've got you covered.
You can download a ready-to-use business plan template in the Hennapreneur Shop! This plug-and-play template allows you to easily build the business plan that your business needs to keep itself healthy, viable, sustainable, and otherwise on track.