08 Apr How to Create a Business Plan
I hope that y’all are ready to get the rundown on how to really become an entrepreneur because, if you’re listening, and something is holding you back, we’re going to change that today. Our guest is Sean Castrina, a serial entrepreneur. I know you hear of serial entrepreneurs a lot, but Sean is different. He has started more than 20 different companies in the last two decades, and he still looks to launch a new venture annually. Because of all this experience, Sean really understands where and how good businesses start, so that’s what we are talking about today.
You all know that the small business world is risky and that so many small businesses fail. Why is this? To Sean, it probably starts with the initial idea. Some of us get so excited about our ideas that we don’t stop to think if they’re even good ideas. Bad ideas don’t work. It is hard to tell which ideas are bad or good when we’re just so eager. Because of this, we need outside input. Start asking people if your ideas sound good. There is nothing wrong with testing the market with your ideas before they become a reality. In fact, this will save you time and money because you’ll know if there is any demand for your idea.
As you make your good ideas a reality, you should really follow some kind of business plan. If you can’t build a home without a blueprint, then how do you expect to build a business without a plan? Every plan has critical components, and there are questions you must ask yourself to get started. Sean has his own list of good questions, but the more questions you ask, the more you will know.
Even though you’re beginning as a humble small business, you can still think like a Fortune 500 company. Think big, dream big. You got this. Once things get rolling, don’t allow your business to stop growing. You’ve got to keep feeding it. Eventually, things will grow, so don’t be afraid to have confidence in your vision from the start. There is so much more to learn from Sean, so if you entrepreneurs are looking for even more amazing beginner’s advice, start here with our podcast!
Why so many small businesses fail
The necessity of a business plan
How to think like a Fortune 500 Company
An idea that is untexted has no value because you don’t know how well it’s going to be received.
It’s never going to be perfect. You’re never going to have everything perfect, but a business plan has some very critical components that you need.
Get the survival mode out of your mind and start thinking about how you are going to grow.
Sean Castrina is a serial entrepreneur with decades of experience in starting new companies. Before he began his career in entrepreneurship, he was a high school athlete determined to go to college. He made it to college, graduated, and got a good job. One day, everything changed when he lost his job because of a leadership change. He decided that he never wanted anyone to be in control of his livelihood again. This eventually led him to consider starting his own businesses, and since then, he has started over 20 different companies. Today, he is an author and popular speaker.
- Check out The World's Greatest Business Plan HERE
I'm so excited for our guest today because he is a serial entrepreneur. And I know we hear that word a lot. But Sean's different. He started more than 20 companies in the past two decades. And he still looks to launch new venture annually. And so he's an investor, a teacher, a high sought after speaker who communicates with really funny humor and bluntness, which I love because we all know that I'm pretty blunt, too. And he really knows how to capture you guys. So I'm hope that you're ready to get like the rundown of how to really become an entrepreneur.Continue Reading
Passive Income my first year in all I did was set this business up, have somebody answering the phone, and we we had only two prices over that, you know, it was either a car SUV or, you know, it's pretty, pretty straightforward. And and when you make 35,000 it, you know, 24 years old passively, yeah, you kind of know that you're onto something, you kind of go like, oh, okay, I don't have to clean cars. Okay, if I can, if I can create, if I can create, if I can, you know, attract the customer, I control the most important thing in this process. And then I just got to get somebody to do it. And the margin between A and B just needs to be appealing. So I did a 5050 split. And I pretty much use that formula for last 25 years and made, you know, a small fortune, it would be an understatement, through partnerships like that. So that kind of just got the ball rolling. And and I think what it does is it it shares a lot of myths. I think that it crushes a lot of myths that keep people from starting a business, like you got to understand the industry, I didn't know anything about auto detailing in my life, right? Number two is that you have to work in your business and build, you know, to save money, I didn't work in my business, I actually think it's the complete opposite.
Number three is you gotta have a lot of startup money, I started that business went under $2,000, in a van payment on a used van. So it was pretty minimal. You know, number four is that you had to quit your day job to start this business. I didn't quit any job to start your business, there's 168 hours in a week, and we just make it happen. Because you don't know if it's going to succeed. So why would you quit your job? To me, that really doesn't make any sense. So you can, then you need a business education, my college degree had nothing to do with business, there's five of the myths right out there. And number six is the myth of that. If you have a job, you have security, so you don't want to, you know, you don't want to leave a job to go into entrepreneurship, because it's, you know, it's not secure. And I think just the opposite. So that experience there in the business that I started just real quickly knocks down the six myths that I think keep people from, you know, going into entrepreneurship, and how it all happened for me, I gave you a nice, consolidated version of that. Yeah, well, it's just, it's about the mindset. And I mean, I grew up with two parents that my mom stayed at home is very traditional, my dad worked for the same company for 30 years. And I didn't grow up around entrepreneurs. So I didn't really know what that was. And so I started off on the path of the college route and working in healthcare, and my parents were like, yo, you got a great job, and you can work your way up the ladder. And then I crushed that letter and their dreams. When I said, I'm gonna try this entrepreneur thing. Like, I think I'm pretty good at like, planning events and traveling the world and getting to do all this different stuff. They thought I was on drugs, they thought I was crazy. But it's all about who you surround yourself with, and the mindset and it sounds like you were saying in the beginning that you had some really great partnerships where they that you had formed along the way. And so if you're listening to this, and you're thinking you want to start a business, everything that he just said, like those are lies, like, and not necessarily that like your parents would lie to you or your friends would lie to you. But don't listen to people who haven't done it. And if you want to do it, there is a way that you can get there, you just have to have that mindset. And there's so much free information out there. Now, like when I started my first company, I was at the library, we didn't even have internet, and consultants and coaches and YouTube like none of that existed. And so there's so many resources out there to help you get to where you want to go. But a lot of it does come down to relationship and being driven. And so Shawn, why do you think a lot of small businesses actually end up failing?
I said there's typically there's the entrepreneurs Bermuda Triangle in the first two years or from startup from idea inception to two years. The first Surefire thing is is that the the business owner fall so in love with the idea that he takes a bad idea to the marketplace and I always say Listen, I'm a mindset person. But my mindset on a bad idea is still a bad idea.
In other words, effort Utley endless energy on a bad idea, you're still forgetting it was a bad idea. So bad ideas is like the multiplication where if you have zero in any multiplication problem, it always ends up 00 is the bad idea. And it will ruin everything good you bring to the equation that zero will always override anything you thought was good. So what ends up happening is is the entrepreneur has this idea in their head and they they don't vet it. They don't open it up to criticism. They don't run it through a business plan. They don't they don't do that.
normal things that you would want to do, to confirm that this idea is going to have a look, you know, might resonate with, with the marketplace. And so that's, you know, an idea in your head an idea that's untested, it has no value, because you don't know how well it's gonna, you know, be received. And I just so that's number one big thing. They just don't test it. They don't open it to criticize and criticism, they don't run through a business plan. Second thing is, is that they have, the most important thing is how are you going to attract and sell your product? And I would just say from the beginning, how are you going to attract them? You have no plan? No, you know, you think you're going to do it on social media, you're going to do this, you've got to test again, to see how you're going to attract customers. If you can't attract customers, you're out of business. Look at every business that goes out of business, they drop off in customer volume, and then they're out of business, Blockbuster Video, JC Penney, Sears, I can go on and on, every single one of them lost the volume. And when you lose the volume, you lose the sales. And so you go into a business and you have no marketing strategy. You think you might be a word of mouth business, or you're going to survive on social media and things of that, I mean, I want to have five different things bring me leads, I don't want it to be on one. So you got to kind of test those before your launch to know that you're fairly confident you're going to attract customers, you notice I'm saying, there's a lot of things that you should do before you launch a business. The problem, the reason it's going to go back to why they fail is that people launch businesses that are not ready yet. Number one, the idea hasn't been vetted. Number two is they don't have a true marketing plan on how they're going to attract the customers, they can't sell to them. And number three, the big thing, again, is they staff with friends and family, they just don't have enough talent around them to either make sales they hire uncle Billy to handle sales, because he's good at building a rapport. But he's not a salesperson, you know, are you have you know, and bitsey answering the phone and all these man, no, you have to staff, your initial hires have got to be MVPs most valuable players, they got to be people that move the needle that without them, you could maybe never succeed with this business. Now I use partnerships as my way to compensate them. But I knew in every business that one plus one equals done me plus one critical partner, end or hire, however you get them. I knew I needed that one person, I always knew that. And I and and that is probably why I've started so many successful companies, because I've always brought in the missing link, the person who had the time that I didn't have because I had a job or I had another business. Number two is add expertise within an industry that I didn't have that allowed me to expand, I could go into any business because I'm going to partner with somebody who has expertise. Somebody you know, in the beginning, I partner with people because I didn't have the capital I needed. You know, number four is maybe they fulfill a critical role they handle, they're your lead programmer. So you have something that goes out the middle of the night, you don't have to be chasing somebody down in another country, you have that person in your umbrella on your team, some kind of going through these fast, but you kind of get the idea there the three biggest reasons that I find that businesses fail,
why that first business does not go well, because you don't get your idea.
You just let it rattle around in your head, and then you bring it out to the marketplace and hasn't been tested. Number two is you don't have a plan to attract customers. You haven't tested anything, you really are just going on pure optimism. I everybody's gonna like it. And then it's crickets. And number three is you don't staff with any anybody who moves the needle. Hmm. It's so important. I'm sitting over here like laughing at myself, because I went to, oh, this this big, big meeting. years ago All About My friend was like, there's this thing called sales funnels. And like, you work too hard. And like you need to understand this life of online selling and I knew nothing about it. And I just I was like, what do they mean? Put an idea out there and ask your audience before you ever even start building it. And to pre sell it Like what? And I thought they were crazy. And then I started to actually build a funnel or build a few funnels, which I should have never done should have focused. And then I understood like, Oh, I see just because this idea is an idea of what I want to cheat teach people it doesn't necessarily mean that's what they're going to click on and that's what they're going to buy and that's what's going to convert. And so I learned the hard way where we did a lot of testing did a lot of beta took every single criticism and we changed the program and we made the funnel better
Better. And guess what, after a year's time, now it actually sells. So you had the same exact thing happened?
Yeah, exact same thing. Yeah. It's like what I think. And what actually converts is two different worlds. And so you have to step back and put your product side. And it's like, well, I know what I'm talking about. They don't know what they're talking about. Well, yeah, that's why you are the expert. But you have to sell it in a way that's going to be able to resonate with people. And what I was doing is I was just talking way over their heads because I have to meet people where they are right. And then I love the one on one has done. I love that little. No, that's my, that's my, that's my go to one plus one equals done. I love it. I love it. So, you know, I get I get conflicting thoughts on this question that I want to ask you. And so when I first wanted to own my company, which kind of was like a hobby company that was like fun, and it was extra money, it was a side hustle. I really didn't see the business until I walked away corporate America. And then I was like, Oh, shit, I got to pay all the bills, like, there used to be money in the bank, and now actually need to like understand how to budget it. And so somebody said, you know, what's your business plan? What's your five year plan? And I'm like, haha, I don't even have a plan for next month. What do you mean? Like, I just take whatever comes my way, because I really didn't need the money, which was kind of the stupidest thing I ever did, but actually did go to the library and write a business plan. But why do you think people actually need a business plan? You know, I give this to illustrations, and that they don't get it that I can help them. But number one, if I gave you $300,000, you won. You won, you know, a sweepstakes, and you went $300,000, some type of drawing, let's say you want to draw you in $3,000 to have your dream house. And but you had to build it? Would you go that day, that week, or even that month to like Home Depot and start buying lumber? Now, you will get a blueprint, the first thing you would if I gave you $300,000 and I told you, we would build you, you got it to build a house? You would never just go do it. You would go how many bedrooms do we need? How many bathrooms? Do we need? Do we need a master on the first floor? Do we need something for an in laws? You know, do we like a big kitchen, open kitchen, you start assessing your needs? Why would you take the same amount of time in a business you're going to start? And it makes no sense that you're just going to go run straight into it, man, I'm not mean you're never, it's never going to be perfect. You're never gonna have everything perfect. But a business plan, you know, has some very critical components that you need. And I do some other illustrations, if I gave you $5,000 that, hey, you just want a free vacation. Again, you would not get in your car and just start heading to it. You'd say well, do I want a summer vacation or winter vacation? You know, what do we like to do? You know, how long can we go for? What's the budget? What type of place? Can we stay in? Do we want to stay in a resort and want to stay in this? Do I go to Disney World? Do we want amusement park? You won't even spend that amount of time on a business plan. To me that just makes no sense.
I don't want it's no one has ever put it to me that way. And what I will say is, while it was it's like just painful, excruciating for putting it together because I didn't know anything when I was doing my first business. And I can tell you like after the first year, and it's actually fun, like looking back at it. And I'm glad that somebody taught me to put all my shit in Google Docs. Yeah, always go back and search for it. It's like business plan. One business plan deep is when three. So on the first one, you know, my second year and what I had put down we exceeded in the first year and it's fun to go back and look and it's also fun to go back and look and say wow, look at the the phone calls and the opportunities and the events that we got to do and the people that we met, they completely changed our life and it completely changed changes the trajectory of where you think your business is gonna go. So it's not like you have to stick to that plan. But you know, I always tell people, it's a your your plan is an active business plan. It's, it's you, you're going to change, it's going to make iterations there's no doubt, but there's certain things within a business plan. I mean, I wrote the book called The world's greatest business plan. And if I just like let me just, I'll go through like, I'm just gonna pick random questions. Why would you not start a business if you didn't notice? Number one, what are you selling? And why are you selling that? Simple question. Number two, why do you believe this business idea will succeed? I mean, why this business? What resources do you lack to start this business? Who is your competition?
Why will the why will your customers buy from you
You over your competition? What's going to be your cost to produce what it is you're offering? What is your profit margins? Nine keep going. But you kind of get Who's your target customer?
No, there's these are questions you've got to know the answer to what is your company name?
Can you get the domain for it?
You know, mean, I can go on and on and on flipping through, like, no, there's, it's a massive to do list. But me and everyone, you know, 90% of these are fundamentally concrete at that time that your competition may change a year from now, you may have to add, add someone new to the list. And that's why it's active. Your target, customer may, you know, change a little bit. As you as you learn more about your customers, it might become a little bit more narrower. But these are just norms. These are good questions that you have to ask. And I, I bought all the business plan books on Amazon, the first page actually right behind me, I have them all there, because I was helping my son start a business and I wanted him to go through a business plan. And I thought those business plan books were so complicated. They were like dissertations, and they were fantasies, because, you know, as soon as he started one of the start ABC tool in chapter one. Never in any of these business plan books, does the business, not make it in chapter 10 Susie's doing great, she's doing philanthropic work, they've got cash and reserves and they're expanding. Man, I just have really had that happen quite that way. So I want to do a business plan book that if if some of these questions made you uncomfortable, and whatever, I accomplished it, because maybe you need to pause. If you don't have the right answers to these and you don't get the information you want. Maybe it's not the right business to start.
Right. And another thing that I find in just mentoring mentees through the entrepreneur center is that like you said, they're in love with their idea. But they're so excited, like they can't sleep at night and they're there. Just go go, go go hustle has also opened up an oven. But like you said, slow down, stop, pause, think it all the way through, do that do the research. So you know that saying build it and they will come bullshit. No, they won't. Like it's not that easy anymore. Like you, you kind of do need to have a plan. And I liked your analogy of building the house. Because even when you built a home, which we've built a couple homes, we're about to build another winner will be a business, it'll be the GSD house where people can come and get shit done. And like do their content and stuff. But it's like, even trying to find the right plan that's gonna fit with the right land. And then I'm like, Well, what if we end up staying there? And what what are the opportunities to build out so we can start with this in your one. And then if we need to build out more sound rooms, or production rooms, or whatever with all the lighting and the set the soundproofing, you can always build on to the house, and pivot and do different things. So I love that analogy, because no one has broken it down like that. And it's quite simple. It's really simple. So as far as I know that for small business owners that could be listening. I'm sure you've all heard of Fortune 500 companies. And so why do small business owners need to think like a fortune 500 company like what sets those companies apart from a vision for something big, they need to think beyond survival? I just think, you know, in other words, they need to know, every fortune 500 company started as a small business 499 employees or less. So, you know, they all start small, but they they're looking for new profit margin. They're looking for new profit streams. They're always trying to hire the best talent. They're, you know, they buy out competitors. I've bought out competitors before you just you know, there it's just get the survival mode out of your mind and start thinking how are you going to grow this thing? That's what you that's the number one thing you got to get out of your head, you got to think how you're going to grow?
Do you have growth steps or do any of your books? I think you just that. I think you just have to be Oh, no, only nobody knows the growth opportunities other than you but you need to look at what are your customers asking for?
Okay, what? How can you generate more revenue with what you offer? Can you put it in another location?
Can you do a secondary product or secondary service that fits what you want? I mean, every business just keeps, you know, you just got to keep feeding it. You got to keep feeding it.
And you make it sound so easy. Yeah, well, you know what I say? You there's a reason why some people make a little bit of money and some people make a lot of money. That's right. I get DMS every day. Can you help me do this? And I answer him politely. No.
Okay, now I'm doing it with my own businesses. But that's why I give away free books. If you go to my website, Sean castrated.com, this eight unbreakable rules for Business Startup success is at no charge to you. So you can go download it, and it'll help you. And that business plan book that I talked about, I'll actually give you the way you can get that for free to I don't only give that away, but if you go to world's greatest business plan.com forward slash free book, you can get that for free, you can actually has a template in there, you can type out your business plan. So I've only written three books, I just gave you two for free. So amazing. So there you go. And then I host the 10 minute entrepreneur podcast. So every day, like I'm teaching you, I do that I do it every single day, just in short intervals, because I have the attention span of a fleet,
as most entrepreneurs do. Exactly.
That's awesome. So I have a question. How did you so you are on Yahoo's top 20, business leaders of 2020? How, how did you do that? You know, I don't know, you know, all that stuff has to do with your marketing team and getting you out there noticed and all that, and the podcast does real well. And so I wrote a book at the same time. So just a lot of good things collided at the right time.
So it sounds like if someone is is new, trying to get into this, that they can, that they can start their own their own business. You have a ton of free information out there. Right? It sounds like you've got your podcast, two of the books are free. So likely, we will put all of the links in the show notes. And you guys go out there and use the resources. And then do you have people that go through your book and then submit business plans back to you and say, Hey, what do you think? Yeah, you know what they would get? They get crickets. Right. My thing is that yeah, I mean, I'm, I'm one of those type of people where I give you most everything for free. Yeah, you're you're going to know whether your business plan is good, because you're going to answer the questions. And if you can answer the questions, and your business plan is good, it's going to be self evident. I think that's my point. In other words, you're going to look at, if you look at the questions, and you answer them all, if it's not self evident, you probably shouldn't go forward. Because a business plan, the one thing that a business plan should do for you is give you confidence in your idea. So if you finished the business plan, and you're not confident in your idea, then it it there's something missing there. There's a problem. There's Yeah, I do a business plan to get excited about the business because I start seeing while it's not as much competition as I thought my costs are, as much as I thought, the margins are better than I thought, wow, this test marketing thing did better than I thought, you know, and the other side, I all these things go negative. And then I realized I don't have a business that I want to run with.
Yeah, and sometimes the business that I started my first business for passion, it didn't it didn't turn out fun anymore.
Passion is passion is an entrepreneurs mistress, you start, you start a business because you have a profitable idea. If you do that. it'll pay for all your passions. It'll help you feed people, clothe people, educate people and give away as much money as you want. But you have a business that should have never been started because it wasn't a profitable idea. I don't care how passionate about it, it It won't succeed and your passion that you had will be, it'll be squashed. And I agree. 100%. So, profit over passion, your profit will be your passion. I love that. Well, that is a great, great high note to end on. Sean, thank you so much for your time today and everybody that's listening. Make sure you go to all the show notes. Get all of Sean's free info. Thank you so much for your time today. And be sure to tune in next week to another episode of business unveiled. Have a great day. Bye. That's it for this week's episode of business unveiled. Now that you have all the tools that you need to conquer the world and GSD get shit done. Would you share this with your friends and fellow business leaders? One thing that would really really help us and help new listeners is for you to rate the show. And leave a comment and Apple podcast, Spotify, Stitcher, or wherever you tune in and listen to business unveiled. You can check out the show notes at Angela proffitt.com slash podcast and link up with us on social media so you can share your biggest insights. And I want to know your aha moments. Until next week, remember the profitable shifts and structures you're creating in your business, help you be more present in your life.