Colin Sprake argues business plans are full of lies, but a 12-month cash flow plan shows you when you'll actually need money. If your client acquisition cost exceeds what you charge, you'll never be profitable no matter what the revenue looks like.
Forget about building a business plan. Do this instead. I get to meet many coaches, mentors, what have you, and so many of them tell me how they teach their clients to build a business plan. Here's the challenge. Most business plans are flawed. They have numbers in them that don't make any sense. They don't understand client acquisition costs. They don't know pricing strategies, what have you. The thing you should do instead is build a 12-month cash flow plan. Not 18, not 24 months, a 12-month cash flow plan. Make sure that your pricing is correct. Make sure that you know what your client acquisition acquisition cost is, that'll come over time as well. Because if your client acquisition cost is higher than your pricing, guess what? You'll never make money. You might have money coming in, but guess what? There's no money left in your bank account at the end of the day. The most important thing, once you've built that 12-month cash flow plan, that becomes the heart of a plan for your business. Not a business plan, but a plan for your business. Because you can see what you need to do month by month for the next 12 months to get the results that you're looking for. If you don't have a cash flow plan, I don't care what level are you at within your company, go build a 12-month cash flow plan Now it will give you when you need money, when you don't need money, and how to get your business to the next level so that you build with confidence, you build with clarity, but it also gives you peace of mind.
