Jul 30, 2012
Practical Business Planning For The Solo Practitioner
Lately I have been doing as much business consulting as actual law practice. I find that this is due, in large part, to the type of clients that hire me. While I work with a number of traditional Mom & Pop business owners, I also work with a LOT of technologically savvy young entrepreneurs. They come to me because, as a former systems engineer, I speak Geek. However, they stay with me because, like most solos, I speak English more fluently than I speak either Legalese or Businessian.
But there is a lot more than that that we solo and small firm lawyers have in common with my clients than just that. We tend to be more tech-savvy than our Big Law counterparts. We also tend to think outside the box more often. Any small business person has to be the technical master of our product: in our case, the law; in my clients’ case, everything from making good food in their restaurants to designing the perfect iPad case. And when we aren’t becoming proficient at our craft, we have to become proficient at running a business and marketing our goods and/or services.
In short, you as a solo or small firm lawyer have a LOT in common with my small business owner clients. Therefore, I will give you some of the same advice I give my clients: You need a business plan.
Just like you wouldn’t start driving your car across country without a map telling you how to get where you are going, you shouldn’t run your business by the seat of your pants just hoping you will arrive at your intended destination. Most advice books tell you how to write a business plan that will appeal to investors. Here is how you write a business plan for you.
Start by writing a Vision Statement. This is NOT a mission statement. It is NOT an executive summary. It is a few paragraphs, tops, on what you think your ideal practice looks like. How big do you want it to be? Do you have employees? Partners? Associates? What kind of work are you doing, ideally? What does an ideal day look like? Who are your ideal clients? Write it all out. Make it as pie-in-the-sky as you want it to be, but make sure it is really YOUR ideal vision of your law firm.
Next, do your SWOT Analysis. Since we have already discussed doing one of those, I won’t belabor the point. Once you have written down your Strengths, Weaknesses, Opportunities and Threats, write out a couple of paragraphs saying what you will do to leverage your strengths and opportunities and what you will do to address your weaknesses and threats. Note that some of your strengths will address some of those weaknesses, and some of your opportunities will balance out the threats. Don’t be surprised if you are writing sentences like, “I will leverage my ability to write about the law to build content into my website and improve my search engine optimization, which will offset my inability to pay service providers for SEO optimization services.” That’s because out of your SWOT Analysis will come your marketing plan. That’s right – your marketing plan. How you take advantage of strengths and opportunities and how you address threats and weaknesses is through MARKETING.
Also notice that you have a pretty neat little summary of what the market for your services looks like: who your clients are, what kind of business they bring to you. Add in a little research about the market for legal services in your geographic area. Ask yourself what you are going to do to tap into that market, write down the answer, and voila! Your Market Summary is written. (Hint: A call to your local library or Chamber of Commerce can help you find out the number of prospective clients for your services in your area.)
Next, we will work on setting monetary goals for your business:
- First, look at your current costs of doing business. Come up with a monthly total, a budget, that it costs to keep your business alive. That budget is your “Survive” number. At that level your firm will survive.
- Now, think about how much more than that budget you need to make in order to regularly take home a small salary. Enough of a salary that you are paying your bills at home, too. That number, realistically, is your “Provide” number. At this level, your firm will survive and so will you.
- Now I want you to imagine what it would look like to “Thrive:” How many people would need to work for you? How much would your costs increase? How much more would you be taking home? This should be a number where you are comfortably providing for you and your staff every month, paying all the bills and socking away a little into a rainy day fund both at work and at home.
- Finally, ask yourself what it would take to really “Prosper.” How many days a week are you working? Who is working for you? How much does that increase your costs? This is pie-in-the-sky time – what would it take, financially, for you to have that ideal law firm you envisioned in your Vision Statement?
Now that you have your Survive, Provide, Thrive, and Prosper numbers worked out, put them into a spreadsheet showing monthly cost and monthly income for one year each. Year 1 is Survive. Year 2 is Provide. Year 3 is Thrive. And year 5 is Prosper.
What you now have is a business plan of sorts. No, not the kind you can take to the bank or get venture capital. (Although with a little tweaking, some of my clients have turned this into a more formal business plan that can get an SBA loan.) But you have a big picture overview of your business: what you want it to be, how you plan to grow your business, how you plan to market your business, and financial projections for years 1-5.
I highly recommend revisiting your business plan on a regular basis. Remember: the map is not the territory! As market conditions or costs change, so should your business plan. As your goals change, so should your plan. Just remember – it’s YOUR plan! What looked like prosperity today may look like mere survival tomorrow, so never be afraid to update your business plan.
Have you created a business plan? What have you done the same? What have you done differently?
All opinions, advice, and experiences of guest bloggers/columnists are those of the author and do not necessarily reflect the opinions, practices or experiences of Solo Practice University®.