I started my new five-year-plan this week. I feel like I am at a transitional point in my life. I have a new baby due in October, in a couple of years I am going to have a 15 year old store and a 40 year old self, my first born is approaching five and very much not a baby any more, we closed a store for the first time this year, we’re shopping for our first investment property and a million other little things. While it’s not exactly lining up with my last five-year-plan I started to feel so overwhelmed by getting the stores ready for holiday, on top of Niki and I taking a step back for a spell once the new kid arrives, that I felt like I needed some structure to cling to.
If you aren’t accustomed to doing a five-year-plan, I’d strongly suggest you start one right now. The benefits are pretty monumental. You know that feeling you get when you buy a lottery ticket (come on, we all do it sometimes) where you kinda sorta already feel like you won. If done correctly that is the same feeling you get out of making your five-year-plan only you have a one in one chance of accomplishing everything you put on there if you apply yourself as opposed to the one in a billion chance of the lottery. While I don’t believe in the mystical aspects of manifesting success, visualizations and affirmations are critical to building the confidence one needs to believe they can achieve great things.
A good plan (replete with details) can easily light your path. It dissects “I want to own a seven figure business” to the individual steps needed to own a seven figure business and makes those steps feel less difficult to take through the realization that you don’t need to take them all at once. Visualizing yourself owning a company much larger than the one you currently own can be, at first, exhilarating and is, more often than not, immediately followed by all of the reasons you can’t do it. “I could never manage an office of that many people, I couldn’t possibly find enough clients, we’ll just crash back down and lose it all.” But if you currently have a $100,000 business then owning a $200,000 business isn’t that hard to imagine. Each year of your plan, as you write out the marginal increases, your self doubt begins to melt away.
One of my goals over the next five years is to diversify our income streams. We faced a really difficult couple of years in one of our neighborhoods that could have easily cost us everything. It woke me up to just how volatile our primary industry (retail) is. We need to make sure that for both our sakes as well as both companies, that we have other means on which to rely so we can more easily ride out the other storms that will surely arise. My other planned income streams are writing (getting a book deal, learning to monetize my personal blog and freelancing for other business publications), speaking, consulting and real estate, okay and one secret project I don’t really want to divulge just yet. As this is a blog about balance in business it’s important to note that I have my personal income from both stores declining as the other sources increase. This means we’ll free up capital to train and empower people within those organizations to grow and develop the new skills necessary to take care of functions I used to carry out.
As an entrepreneur (or anyone aiming for financial freedom) the trick is to, in effect, make a Voltron of five year plans. I am thinking about the progression of each element of my plan and seeing where they compliment or conflict with each other. Making this the foundation of my plan was the landmark difference between this and plans past. Prior to this iteration I have generally written out a narrative for personal and professional goals with some hazy numbers and few details, siloing the professional and personal did little to expose potential conflicts between the two. Could I make a decent amount of money on keynotes or consulting off the bat? Possibly but that would require a lot of additional training, networking, conferences and travel. With another kid on the way and some sweeping changes we’re making at one of our existing stores I don’t have the time to commit in the next one to two years to contribute enough to see significant gains there. I am planning on seeking out additional speaking opportunities during this period for more stage experience but I don’t anticipate anything other than local conferences or those I am already attending.
Much of the stress of entrepreneurship arises from the unknown. By incrementally building several diverse income streams at the same time, you’ll never be dependent on just one again but more importantly you’ll never need to seek immediate refuge in another if your only business goes south. How many sleepless nights or inability to go out with friends and break focus from your work problems have you experienced when your only numbers are going in the wrong direction? If you’re like me the answer is “so so many.”
Proper incremental diversification is like having five spigots only turned on a quarter of the way to fill up one bucket. If one water line gets clogged you just need to turn the handle on one of the other four to make up for it. The trick is to make sure your water needs are not rising faster than your spigots can produce. Needing to support five buckets with five spigots is just an amplified version of your current problems. Or without the clumsy metaphor, this method is all but guaranteed to produce more revenue, save it and invest it in your businesses and people or you’ll be in even worse shape. This is about buying peace of mind and security, not a better car or nicer vacation.
This is my new method for writing plans and discovering the hidden truths therein.
You should devote an entire day to this and find an inspirational location to work that you are free from distractions. Take your laptop of journal to the woods, beach, your favorite co-working spot… whatever space you know you can get into a state of flow and not get called on for other tasks. One of the hardest things to get busy entrepreneurs to accept is that taking a step back to work on yourself and for proper planning can save you all of those frantic feelings in the future.
Make a list of every income stream you realistically expect to pursue in the next five years. This will be the foundation of your template. Also add in any other chronologically progressive items like degrees or certifications you’ll be gaining during this time period. Additionally you’ll want to track other personal information like your children’s ages or any landmark birthdays that might cause reflection for yourself, like how I’ll be turning 40 in the middle of this plan. Right now I am primarily working on ways to keep my businesses moving forward while not missing my kids growing up and making sure my wife and I maintain a personal partnership that is at least as good as the one we have in business. If my family is my main focus then I can’t very well write a good plan without them to reflect on at each stage.
Begin to fill out each section with the BIG details. Are you going to step up to or down from the CEO position at your company? Are you going to buy or sell your building? Are you going to exit your company at some point in this plan? The what you are going to do but not necessarily the how.
Go back through and start adding in details. At your first pass try to not edit yourself. In fact don’t even go back and fix grammar or spelling initially. Just write. To really dig into what your subconscious is telling you, just try and get as much out as possible as quickly as possible without you getting in the way.
This is the fun one. Reflect on which income streams or other elements of your plan brought you the most joy. Where did you have to really struggle to figure out the details for how you’d move one section of your plan to the next stage? Which elements flowed effortlessly? There are some spigots you can turn on if you need to and some you just can’t wait to crank open and require some discipline to turn on slowly.
The areas that flowed most easily are where you should be applying more of your focus. As you enter the next step you will start editing and seeing how these individual plans might be competing for too much of your attention. Make sure you’re hyper aware of the areas most likely to bring you joy and given them precedence.
By now you should have your best case scenario listed out. If you’re like most entrepreneurs your revenue targets are a little on the optimistic side from your first run. Start considering how each element impacts the others and as you start needing to adjust, make sure your cuts are primarily coming from the areas that you were less enthusiastic about.
For me real estate just isn’t that inspiring. I understand what I want to do with it well enough but I don’t see myself having a real estate career. It will never be my main thing. On the other hand the changes I want to make to one of my core businesses are really exciting to me and I’ve always dreamt of having more time to devote to business philosophy and writing. My two main objectives leapt off the screen at me. The others are still there and I value their importance but it was easy to remove real estate conferences and networking for what I plan on doing with it in the near term. I can purchase some small revenue generating properties with the knowledge I already have. This in turn reduced my revenue targets for that stream but allowed me to refocus that energy into retail and writing.
It’s time to test it out. Pull up your favorite calendar app and start making a schedule for a couple of weeks with all of these elements in play. This is kind of similar to the Perfect Calendar exercise I first heard about on the Community Made podcast which is one of my favorite development tools and I’ll make sure to do a full post about it soon. However where the perfect calendar is like making the perfect cake with a pastry chef, this is more like “does this bucket of stuff turn into a cake at all?”
The most important thing is to be realistic. Don’t make a calendar where everything goes right. Pad the timing to make sure you can actually make incremental progress without killing yourself. If you think you’ll need to be at your business for 20 hours per week to oversee the team then you have whatever is left over that you are comfortable working while having a life outside of that left. You may very well find out you cannot tackle everything at once and cut something altogether. You may discover things about your management style that, if addressed, could improve efficiency and open up the time you need to pursue the other projects. While those findings seem frustrating (MORE EDITING?!) they are crucial and beyond highlighting your passions the second most enlightening discoveries of this process.
You might also find it fun to make the calendar on this week over the next five years in a Google Calendar and then reflect on how your real schedule aligns with your plan once you catch up. You will likely see some obvious connections between areas you are ahead of or behind your goals based on how your real schedule at various times lines up with the one you’ll be making now.
If you want to go for extra credit, create a companion spreadsheet and test the numbers for each income stream. No need for full scale projections with every line item estimated but at least get your big buckets of revenue, expense and net.
Whether you use this method or not, I hope this inspired you to pull out your old plan and reflect, start a new one or create one for the first time. If you are feeling overwhelmed and unsure of your next steps it’s an invaluable tool to get you oriented in the right direction and help you chart a clear course towards a more balanced entrepreneurial journey.