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CEI 069: A New Approach to the Business Plan with Jessica Oman

Opening

(0:10)

Hey begins. On today’s episode of Connect, Engage, Inspire, Danny sits

down with Jessica Oman, the founder of Renegade Planner who is the

expert of experts on helping emerging entrepreneurs like you with their

business.

Now most of us shy away from words like business plan or market

research because they seem outdated and kind of boring, right? Well

Jessica takes a different approach starting with your ideal customer and

has found a way to make understanding your numbers and creating a

business plan interesting and engaging.

She’s also giving you her ideal customer worksheet that’s been the first

step in helping many of her clients for free. And so you can get the most

out of your customer profile, we’re going to give you our Getting Into

their Heads Worksheet from audience business master class for free, too.

To get it, go to www.ceipodcast.com/profile.

I’m Steph, Firepole Marketing’s podcast coordinator and here’s Danny

Iny and Jessica Oman with episode 69 of Connect, Engage, Inspire. You’re

about to learn how to create a business plan to jet start your success and

growth.

Danny Iny

(1:16)

Hi there! I’m Danny Iny and I’m here today with Jessica Oman from

Renegade Planning. Jessica, introduce yourself to our audience. Who are

you and what do you do?

Jessica Oman

(1:25)

Well, my name is Jessica. You said that already. My company’s name is

Renegade Planner and what I do is I create business plans for non-

conformists and train new business owners to plan and launch their

rebellious new companies.

I love working with people who see entrepreneurship as the only perfect

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path for them because it just don’t feel like they fit in everywhere else.

And I love working with people who are determined to make

entrepreneurship work for them and ready to work hard to do it. So I’m

all about planning.

Danny Iny

(1:55)

So let’s talk about that. There’s the whole kind of business planning

debate. There’s people who want a super long detailed plan and there’s

the people who are like, “You can’t plan business. It’s all seat-of-your

pants.” Where do you fall on that debate?

Jessica Oman

(2:09)

Well, it’s totally both. I mean, a lot of people do say that the business plan

is dead. And I think that that’s true for the conventional, 80-page tome

with huge pages and pages of market research and industry trends and

that type of analysis. I think we pretty much done away with that because

our economy is shifting so much. The statistics from a few years ago just

don’t apply to the world today.

So putting a really, really long package like that together just isn’t as

effective as it once was and it’s usually not expected. People who are

going for business financing like a bank loan, they do still want to see a

pretty conventional format. But even then, it’s getting shorter and shorter

and more succinct.

Danny Iny

(2:48)

Well, banks are living in years ago, from decades ago.

Jessica Oman

(2:51)

Yeah. But that’s why when I work with my clients, I say, “Well, yeah, you

are going to be running this business by the seat of your pants. And your

plan will probably be out of date three months after you write it.” But

rather than spending a whole bunch of money and time developing this

plan just for the banks so that you can put in a desk drawer and never

look at it again, let’s create a document that is malleable, that can evolve

along with your business, as something you can actually use as a

reference guide.

So I think of business planning more from that perspective as it can serve

a number of different purposes and really provide a vessel for all of the

different plans and ideas and visions that you have for your company.

Danny Iny

(3:28)

So how does that work?

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Jessica Oman

(3:30)

Okay. So we have a kind of an interesting approach regardless of the

purpose of the business plan whether we’re going for investment or a

bank or whether we’re just working with somebody who needs the plan

to remove some fear or anxiety about what they’re trying to do when

they’re starting their business.

My approach starts with the ideal customer. And of course, we know this

is not a new concept, right? A lot of people talk about you got to create

that customer avatar; you have to know exactly who you’re speaking to.

And I approach business planning from the same perspective.

So we go through an exercise where I force my clients to really envision

that one perfect customer—if they can only have one—and just clone it

over and over again as many times as they needed to to make as much

money as they wanted to. And then we build a business plan around that.

And so, I kind of have this module approach where we begin with the

customer then we start building out a marketing plan and a strategy

around that customer. We look at who the people are in the business who

can speak to the customer the way that you need them to. We look at

aspects of money, so how do you price your products so that the

customer wants to buy it, what kind of things you have to spend money

on in your company to serve your ideal customer best.

And then finally, how do you compile all of that into a format that’s

suitable for a business loan if you need it but also for yourself so that you

can always keep that perspective on your ideal customer as you’re

building your company.

So that’s kind of the general overview of the approach that I use. And it’s

refreshing and sometimes surprising for a lot of my clients who are like

“Well, I just need a business plan.” And they don’t really understand

what that means for them. So that’s kind of what I try to teach them

through the process.

Danny Iny

(5:07)

So it’s not about creating this like big elaborate document doing all this

market research. It’s almost – you can almost call it like a business

decision document, right? You’re just making people sit down and

actually decide the things that they’re going to have to do in their

business so they know what they’re going out there to do and capturing

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that.

Jessica Oman

(5:24)

Yeah. And it’s so interesting working with my clients to help them come

to those decisions because when most people come through my business,

they have a pretty clearly defined idea what they want to do. But they just

don’t know what steps to take when, what’s the process to use, how do I

make these decisions on pricing or whether I need an office space or a

retail store.

So I kind of I ask them very pointed and very specific questions to try and

get them to come to those decisions on their own. And it’s really

interesting. It’s like asking somebody why – what color is the sky and

they say like, “Look, dolphins.” People are just all over the place because

they’re creative and they’re thinking about their product and their

business and that’s really, really cool. But it can result in them being

really, really unfocused.

So I hope by the time that they come to me that we start to bring some of

that focus in and help them make decisions that they can actually write

down on paper to get them towards launch.

Danny Iny

(6:21)

So how long of a process is this? I mean, if someone sits down and

whether it’s a client with your help or one of our listeners who’s just

thinking, “Okay, you know what, maybe I need to do this,” what is the

time commitment to put a business together? Are they looking at hours,

days, weeks, decades?

Jessica Oman

(6:38)

Yeah. I think it takes about a month regardless of whether you’re doing it

yourself or whether you’re working with a consultant like me to create

one for the bank or whatever. Usually, it takes about 30 days and it can

often take a lot longer.

What I find is that that the most successful clients that I have are the ones

who combine the DIY approach with some coaching and some one-on-

one access to me because that means they come to the decisions that they

need to make on their own. And they just have somebody to bounce their

ideas and questions off of. That usually gets some – completing their plan

a lot faster.

So the products, the information products that I sell are usually designed

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to be completed in about a month. The program I’m going to be talking

about later is longer than that or if they’re just getting me to take most of

the work off their hands, it’s usually about a month.

And I know you recently interviewed John McAdam, right? And he

talked about the one-hour business plan. And I thought that was a really

interesting perspective on it, that maybe you can actually write some sort

of reasonable guidance document in about an hour. But even he admitted

that there’s a huge – just hours and hours and hours of thinking that goes

in to all of that before you ever put anything down on paper.

So I believe my process encompasses sort of all that. And I think for most

people, it usually takes them about a month to really process everything

because they’re developing a lot of skills along the way as well, right? It

would be like taking an MBA in 30 days, like it’s hard. You have a lot to

learn.

Danny Iny

(8:02)

For sure. And so over the course of those 30 days, I mean, how many

hours – or like is that two hours every other Sunday over the course of a

month? Is that like a full time job, eight hours a day, this is what you’re

doing? And how much time actually goes into that?

Jessica Oman

(8:15)

Yeah. Well, you have a set a limit on it because honestly, people can get

involved in market research and looking at all the different tactics and

strategies that are out there forever. I mean, at some point you just have

to stop.

The modules in my do-it-yourself program that I currently sell, which is

just like a downloadable workbook. They’re meant to be completed in

five to eight hours each, and there’s five of them. So you might be looking

at –

Danny Iny

(8:42)

25 to 40 hours?

Jessica Oman

(8:43)

Yeah. Something like that to put – to really get a handle on it. But even

then you’re still tweaking and revising because your business is shifting

all the time. So you’re always going to be going back to that plan and

revising it. It’s never really done.

But yeah, I think you can have a pretty reasonably a well-composed

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document and yeah, 25 to 40 hours of work.

Danny Iny

(9:03)

Okay. I want to expand on what you just said, I mean, you just mentioned

very correctly that it is a living document. Things are going to change

within literally five minutes of hitting print if you’re going to waste the

trees to print something that’s going to be obsolete so fast.

So you’ve taken the 40 hours, you’ve taken a month, you’ve written up

your plan. It’s beautiful, it’s awesome. It’s brilliant. And then life

happens, reality happens and five minutes later, it’s obsolete. Then what?

How does that stop from being a document that is gathering either literal

or digital dust on your hard drive, how does it come an operational

document within your business?

Jessica Oman

(9:40)

Well, the thing is you can still use your plan even if it’s not quite exactly

up to date. If you have taken the time to define your ideal customer and

you’re pretty focused on that person, that’s still going to shift but

probably less so than other aspects of your business. If you’ve got that

and your vision, and those things are really, really clear in your plan, then

the plan is still going to be useful. You’re just going to be tacking and

shifting and sort of changing your approach as you go.

But every time you are trying to make decision in your business and

you’re like, “Oh man, should I just spend that 500 bucks on Facebook ads

or I just don’t – I don’t know what to do?” You go back. You look at that

plan and you say, “Okay. Is this something my ideal customer would

actually respond to? Is this aligned with the vision of my company?” So

you have that place you can go and check.

And I like to compare a business plan to having a GPS. So if you wanted

to drive from LA to New York and you didn’t have a map, you would

probably get there. I mean, yeah, you probably are going to get there but

you might make a bunch of wrong turns and it takes you a lot longer.

Things get confusing and frustrating.

But if you have a GPS, you have a lot more guidance. You have some

thing kind of telling you, “Okay, turn here. Take this exit.” And even if

your GPS hasn’t been updated for five years, you’re going to still use it,

right? It’s still close enough to where you’re trying to go and it still has

your destination set into it. So I think that’s the best analogy I can come

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up with.

Danny Iny

(11:02)

Okay. I like the analogy. I think it’s actually, it’s very accurate. It’s very

good. I do have a challenge for you on it.

Jessica Oman

(11:08)

Uh-oh.

Danny Iny

(11:09)

So I want to – let’s explore this.

Jessica Oman

(11:11)

All right.

Danny Iny

(11:11)

Going with the GPS analogy; if the GPS maps haven’t been updated in

five years, it’s still fairly accurate. And I mean, things change in the

business world faster than they do especially for a start-up, they’ll change

faster than the roads will in five years. But the analogy holds.

But for the GPS to give you good directions there’s a garbage in, garbage

out problem, right? If the software of the GPS that does the path-finding

isn’t well done then the instructions are all going to be off.

So as the new entrepreneur who’s sitting down to write their very first

business plan, how do you know that your business plan that you end up

creating is actually feasible and realistic and not something that five years

from now, you’re going to look back and not just say that “Oh, things

have changed,” but you’ll look through it and be like, “What the hell was

I thinking? This doesn’t make any sense at all.” Because I’ve had those

experiences looking at plans I put together years ago.

Jessica Oman

(12:08)

Yeah. It’s a really – it’s kind of an interesting thing and it’s one of the

reasons why people just kind of give up on their plan or they start writing

them and then they just kind of stop.

The thing is you’ll never know for sure if – the plan can’t predict the

future. But I do think that there is some value in doing a little bit of – and

I hate to use the word – data research, a little bit of market research to try

and get a sense of what’s going on and where people think your market is

going and putting that into the document so you have a little bit of

something to rely on to say, “Yeah, I think this business is feasible

because I did a little bit of research and these experts in the field say that

more and more consumers in my region are switching to sustainable

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products for their babies,” or whatever it is.

Like if you can look at some kind of trend and research to show you that

things are heading in that right direction, then you can embed your idea a

little bit more securely. And the banks like that, too. If you’re going for

financing, they want to see that you’ve gone and said, “Yeah, there’s a

reason to expect that my ideal customer base is going to grow and here

are all the reasons why.”

Now, things could change and shift really quickly and in that case, you

do need to be going back probably every three months at least for the first

year of your business. And checking that to make sure that it’s still

accurate. And if you notice, there’s a big economic shift or something has

really drastically changed in your market, then you have to change your

business plan, too.

Danny Iny

(13:41)

Okay, that makes sense. Talk a little more about – so there are a few

reasons why a business plan – looking back on it after a few years, it can

be like, “Hey, that didn’t make any sense.” And the first is, as you kind of

have been alluding to that you didn’t do a good job at all of assessing the

direction of the industry and the shift in demand in the market, all that

kind of stuff. And so, a lot of the research you’re talking about, that

would validate and kind of make sure you’re on the right track.

What I found dealing with a lot of early stage entrepreneurs is that the

actual business model, the business logic underlying how the business is

going to work doesn’t make any sense at all. How do you gut-check that?

Jessica Oman

(14:21)

Talk to me. Yeah, this is so interesting. I mean, I have a real strategic, sort

of big picture kind of brain, right? And so when someone pitches an idea

to me and says, “Yeah, this is a business I want to start.” Just base on the

experience that I’ve had revising or writing, we’re probably getting on

250 business plans by now with the last four years. I just know right away

where the red flags are because I’ve seen what similar business models

have worked and what haven’t.

So I mean, I really think that before you set out to write a plan on your

own, just don’t do it in a silo. Talk to somebody even if it’s just a family

member. Although I recommend, if you talk to a family member you

should also talk to somebody more objective. Bounce it off a few people

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and tell them to give you honest feedback on it because that’s going to

open up probably a bunch of holes and a bunch of things that you didn’t

think of in the first place. And that can help you refine that business

model so you don’t go into the plan and spend all that time on something

that doesn’t even have any potential.

Danny Iny

(15:20)

And you know what you’re right, it’s so important to get outside

feedback but it’s really important they’d be qualified feedback. Because I

mean, I look at a lot of start-ups and any given start-up, they come to you.

They present, they say “This is what I’m going to do.” You could ask 100

questions but there are only like two or three that really matter. And the

rest are all kind of red-herring type details that maybe they haven’t

figured this out but they will and it’s not pivotal.

And the big part of telling whether a business plan makes sense is being

able to look at the business model and being like what are the two or

three questions that really matter in this case. And you’re right, I mean, at

the end day, you can only – I mean, processes and systems and plans,

they help a lot but you can’t replace experience. You can’t replace real

expertise. So there is a real value to bringing someone who just knows

what they’re talking about and has experience looking at this stuff into

the process.

So what’s involved in that, I mean?

Jessica Oman

(16:24)

You want me to tell you what my three questions are?

Danny Iny

(16:26)

Yeah, yeah. What are your three questions?

Jessica Oman

(16:28)

Well, I want to know first of all, who are the customers for their product.

If they don’t have that defined, we have to do that exercise anyways, but I

want to know that they’ve narrowed it down to something more specific

than moms of teenagers over 40 years old. You know, like something

more than that that they’ve really gone into specifically figuring out who

their customers are.

So who are the customers? What is the cost to actually produce this thing?

And this is really hard especially for people who sell services because

they think that the cost is nothing and that’s just not true and can it scale?

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So is there a way to grow this business to the point where it can actually

reach these multi-million dollar profitability goals that a lot of people

have. So those are the three questions that I always ask and that I think

everyone needs to ask themselves when they’re thinking about going into

business on their own.

Danny Iny

(17:18)

Do you spend a lot of time looking at – this is just for my curiosity. Do

you spend a lot of time looking at like financial projections and stuff?

Jessica Oman

(17:25)

I do. I like to analyze them. I like to look at people’s financial projections.

But I look more at cost than I do at revenue potential. One of the biggest

mistakes that I see a lot of start-up entrepreneurs make is that they just

look at how much they think that they can sell, and that’s lovely. But if

your costs escalate faster than that then you’re going to end up not

making any money at all in a few years once the business gets too big.

So Mike Michalowicz actually, he calls it real revenue, which is essentially

the money that your business is left with after you have produced the

thing that you sell. So if you make pie, then it’s the cost of the ingredients

and the packaging for the pie. Whatever is left over after you paid for that

is what you have to run your business. And that’s a really important

mindset shift that a lot of new entrepreneurs have to make.

So that’s something that I always look at when people have tried to put

their own financial projections together. That’s the first thing that I check

is that are those cost actually are going to be covered.

Danny Iny

(18:22)

I always find looking at like business plans start-up financial projections,

I find it fascinating because it’s such an exercise in futility if you think

about it. Because there is not one number on that spreadsheet that is not a

figment of people’s imagination. But you think if you put it all on a

spreadsheet, it concretizes it. It makes it real. But really, what you’re

doing is you’re multiplying guesses by guesses by guesses.

So it just – anyway, it serves a purpose. It really it demonstrates whether

or not the business logic makes sense. But I mean, look, investors and

banks, they insist on it. They want to see it. It’s just that this open secret

that everybody knows that it’s complete fiction. So that just – I find that

weirdly fascinating.

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Jessica Oman

(19:07)

Yeah. And I have – there’s a couple of different ways that I approach that.

So if I have a client who is not looking for bank financing or investment,

we have a really different approach to doing their financial projections.

We’ll still do them but we won’t be so concerned about the minutiae of

every little operating expense in the business and getting quotes on every

tiny little piece of equipment or supplies that they might buy. Whereas

the banks, they really want to see that you have that detail in there.

Yeah, so I have a completely different approach because yeah, we don’t

know – so if you’re opening a retail shop and your retail shop might be

1,200 square feet, it might be 2,000 square feet, your lease cost is going to

be drastically different. So whatever assumption you put into that

business plan, if you suddenly find yourself in a space that’s double the

size, well, your cost projections go out the window, right? So you have to

change it right away. But yeah, that’s just what the banks want you to do.

They want you to put that budget in there.

So for people who aren’t looking for bank financing, I say, “Okay, look.

Let’s project your revenue but let’s be realistic about the number of

people that you’re going to need to get there. And let’s just create a

budget, a monthly budget that going forward you can rely on and check

to see if you’re actually covering all of your cost. So it’s a little bit more

simple but it’s still really useful for the entrepreneur.

Danny Iny

(20:25)

Cool. Jessica, we’re coming up on 20 minutes. I want to respect your time

and the time of our listeners. And I already see that we’re going to spill

over but I still have questions I want to ask. The question that I try to

wrap up a lot of these interviews with is it’s about making it practical,

making it implementable.

So I could see a lot of people who are listening to this thinking, “You

know what, I do need more of a plan. This flying by the seat of my pants,

not knowing where I’m going, it’s not working as well as a little more

direction and clarity could. I should sit down and put together a plan. I’m

taking this seriously, I’m clearing three hours this afternoon to do

something about this.”

But at the same time it’s overwhelming. There is so much to do, right?

Business plan is a massive complex document. You’ve got templates that

confuse the crap out of you without helping at all. You’ve got all these

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numbers, all these Excel spreadsheets for people who are often not very

numbers oriented.

Where do you start? What should you do with those three hours?

Jessica Oman

(21:18)

You just start by defining who your ideal customer is and narrowing it

down as much as you possibly, possibly can until there’s just one person,

like just one. And you have to force yourself to decide, would I rather

have a female customer or a male customer? Or would I rather have a 35-

year old customer or a 22-year old customer?

And it’s really, really difficult to do that but the more you hone in and

then ask yourself those questions about your preferences and who you’d

really like to work with, combined with the type of people who would

actually want to buy the thing that you’re selling, that’s a really useful

exercise. Just getting that as clear, as clear as possible because too many

emerging entrepreneurs fall into the trap of “I’m just going to market to

everybody.”

And I wrote a guest post on Firepole Marketing last year about that and I

think it’s called Shooting in the Dark is Not a Marketing Strategy or

something. That just never works. And that overwhelm that they’re

feeling at the beginning, that lack of focus is just going to stay with them

if they don’t know who they’re really trying to reach out to as specifically

as possible.

So if you’ve got three hours, I would say – you know what, Danny, I

didn’t tell you this but I will get you my ideal customer worksheet, the

one that use with my clients and you can put it in the show notes if you

want. People could download it right away and get to work.

Danny Iny

(22:26)

That would be awesome. Thank you.

Jessica Oman

(22:28)

Cool.

Danny Iny

(22:30)

So everyone who’s listening to this, you’ve got homework. You’ve got a

great resource in the show notes that you can go ahead and grab that’s an

awesome surprise. Thank you for that.

If people want to know even more about you and your work, and they

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want to maybe even get some help with their own business planning,

where do they go? Where do they find you? How did they connect?

Jessica Oman

(22:50)

Yeah. Well, I’m really easy to find at renegadeplanner.com. That’s where

you can grab a whole bunch of free resources. Opt in to my newsletter

and I have all kinds of free content to send you there that gets you started

on writing your own business plan. And I do talk about templates and

why they don’t work which is something that I wish we would have got

to because that’s fun to talk about.

Danny Iny

(23:09)

There’s the next time.

Jessica Oman

(23:11)

Yeah, right. But if people are really ready to get going and they really

think that it would fun, they can also check out rebelbusinessplan.com

and that is going to be where my brand new program is launching. And

that’s the longer program that I referenced earlier, a 10-week program for

brand-new entrepreneurs or people who are very, very new in business.

And the full name of the program is Rebellious Business Planning: A Step

by Step Program to Help You Plan, Build and Run a Profitable New

Company. And I’ll have a whole bunch of information there on what the

program entails. There’s a lot of stuff in there.

I’m doing 10 lessons, two from each of my five modules. I’ve got a

Facebook mastermind group there. I’ve got coaching, group coaching

calls with me, three of them times one hour, which is like already a $600

value right there. And so and so much more, so they can find out all

about that program at rebelbusinessplan.com.

Danny Iny

(24:05)

Fantastic and we’ll have links to everything in the show notes.

So Jessica, thank you so much for taking the time to come on the show to

share of your experience, your insights, your ideas. I know it’s been

valuable for a lot of people listening. It’s been a lot of fun for me. I

appreciate it.

Jessica Oman

(24:19)

Cool. Thanks so much for having me.

Closing

(24:20)

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