Part 1:

Make a
Plan
W
hether you are starting out or lost in the
weeds of an existing business, the most
important thing that you can do is to
understand what is working, what isn’t
working, why things are or are not working, establish some
goals, and then actualize that plan. Let’s break this down
into manageable pieces.

29
30
HOW DO I KNOW IF
MY BUSINESS WILL
WORK?

T
he “correct” way of proving that
your business will work is called a
“business plan.” A business plan is a
series of biased, made-up numbers
that tell the story that you want to communicate. A
business plan evaluates the size of your total market,
diagnoses and explains away your competitors,
and then manufactures some optimistic numbers
to convince your bank or the Small Business
Administration (SBA) that you are worthy of a loan,
despite your lack of history or proof. A business plan
typically includes projections of cash 昀氀ow over the
next 昀椀ve years—things that you couldn’t possibly
know at this stage and certainly do not line up to
reality in 99% of cases. That said, if you are a relatively
new business and you need to borrow money from
a bank, you will likely have to go through the slog of
making a business plan. But for most people that’s
just busywork and you’d be better o昀昀 researching
any other aspect of your business.

31
 Of course, before you start running things you
need to establish a baseline that you are ful昀椀lling
people’s needs and that your means of reaching
them is working. I wrote out a 21-point program
for establishing a basic viability threshold that we
used for years, but that sounds really boring, it’s a
lot to read, and during the course of writing this, I
simpli昀椀ed it to a single mathematical formula. To
test if what you are doing would work, consider this
equation:
(Supply) / (Demand) x (Credibility) x (Access) =
How Successful You Will Be
If you are less trained in experimental
mathematics, you may be looking for simple
numbers to plug in there and know the answer. But
success is variable, right? Like, your idea of what’s
necessary for success is much less than what the
shareholders of Coca Cola demand for success,
right? And while you could plug in concrete integers
here, this formula is much more useful for getting
a general idea. You don’t have data to plug in yet if
something isn’t tested, and you really only need a
broad idea that something is viable.

32
 Supply is how many other organizations are
already o昀昀ering your service or a similar one. If
you are a hairdresser, you don’t need to compete
with salons thousands of miles away but you might
have to compete with other local fashion and
makeover services. If you are making artisanal dog
treats, you could conceivably ship them all over the
world, so you compete against every other dog treat
manufacturer—corporate and artisanal—to varying
degrees. You probably already know the intimacies
of your exact market because you picked a business
category that you are so passionate about. You picked
a pursuit that you’d rather do than work a day job for
someone else, right? Your passion is useful in your
market analysis. Who are the notable players?
Demand is how popular what you are doing is.
While there are upwards of one million self-help
books in print, there are also many people who
devour one after another endlessly. If they don’t 昀椀nd
the answers they want or language that makes sense
to them in the 昀椀rst one, many people read another
and another, slowly making sense of the world.
Crystals went from something that a very niche set
of people focused on to invading the mainstream
through Instagram in昀氀uencers. Every resident of the

33