I did a bit of brainstorming today on my business plan. From my previous exploits, I've found that a company without a business plan lacks direction and guidance.
I've decided that I'm going to start this exercise in small chunks at a time. Doing a little at a time will allow for the consolidation of my ideas. So I took an hour today to reflect on where I want the business to go. I began with a very simple question - what will it take to support my own, full time salary?
For a long time, I've been consulting. I enjoy helping people on custom software development and IT project management. I'm looking to transition a full time job and a part time consulting gig into a full time business. I believe that this can be achieved only through the development of assets. While consulting can make significant amounts of money, time is a limiting factor. You cannot make yourself or your employees available for a limitless number of hours. Therefore, all you can do to boost revenue is to boost rates. This is not something that is fair to my customers, and it's not a model for significant business growth. At some point, your rates are going to become impractical and your customers will seek business elsewhere.
I would like to develop a business that will result in an increase of income with a reduction in time investment. This can be achieved through the development of products. The first five years of Enlight Solutions, Inc. should be spent on transitioning from a part time consulting firm to a full time provider of online services.
In order to sustain myself at my current standard of living, I will have to gross $85K annually. This was based upon a net of $60,000 with a reserve of $15,000 in taxes (30% of gross).
How can this be accomplished? If I invest money made off of consulting revenues into the development of products over time, I can begin to transition the business into its desirable focus. I've depicted this below.
There are numerous issues with this model, however.
- How can I keep my consulting customers satisfied while making this transition?
- How do I manage this transition relative to my active contracts?
- Will the products I develop be profitable enough to subsidize the loss in consulting revenues?
- Will I miss consulting?
Future brainstorming sessions will have to address these issues.