Pathwise

Start a Small Business · Lesson 12 of 12 · 12 min

Your one-page plan

Put the whole course on one page by following Taraneh as she builds hers: the customer and the offer, the evidence, the numbers, how she'll find and keep customers, and the rule that tells her when to change course.

ONE PAGE

Seven lines and a date

A long business plan mostly impresses the person who wrote it. For a small business, one page is enough: customer and problem, offer, evidence, numbers, getting customers, keeping customers, and the books, plus the date you'll review it. Each line is a lesson you've done. If a line is empty, that's the lesson to go back to.

Taraneh bakes birthday cakes at home. Her customer comes straight from lesson 2: working parents in her district, a child's birthday with a week's notice, bored of plain supermarket cakes.

TARANEH'S PAGE, part 1

Customer   Working parents in our district, a child's
           birthday coming up, little time to organise
Problem    'Supermarket cakes are boring and I have no
           time to find something special'
Offer      Birthday cakes with the child's name and theme,
           ordered by message, delivered on the day.
           From 40, serves 10.
Evidence   Pass mark set first: 8 paid deposits from 40
           parents asked. Result: 9.

Output

Pass mark met: 9 deposits from 40 asked (22.5%, target 20%)

Notice what is not on the page: 'people loved the idea'. Compliments are the bottom rung of the evidence ladder from lesson 3. Deposits are the top.

Check yourself

Before writing her evidence line, Taraneh has four things she could put there. Which one belongs on the page as her strongest evidence?

  1. Her post about the idea got 120 likes
  2. Fifteen friends said they would definitely order
  3. Twenty parents gave their numbers for updates
  4. Nine parents paid a deposit for a real date
Show the answer

Nine parents paid a deposit for a real date

Yes. Paying is the top of the evidence ladder: it costs the customer something real. Likes, promises and phone numbers are useful signals, but they're lower rungs.

TARANEH'S PAGE, part 2: the numbers

Price per cake                        40
Variable cost: ingredients 13 + box 3 16
Profit per cake       40 - 16       = 24
Margin                24 / 40       = 60%

Fixed costs a month
  equipment instalment 200, ads 120,
  phone and internet 60, printing 100 = 480

Break-even            480 / 24      = 20 cakes a month

Cash set aside                     1,200
If she sells 10 cakes a month:
  burn = 480 - (10 x 24)            = 240
  runway = 1,200 / 240

Output

Break-even at 20 cakes a month. At 10 cakes, 5 months of runway.

These are lessons 4, 5 and 6 in eight lines. The runway is the most important number on the page: it's the time she has to get from 10 cakes to 20.

Check yourself

Taraneh's cost per cake stays at 16 and her fixed costs at 480 a month. If she raises her price from 40 to 44, how many cakes a month does she now need to break even?

  1. 18 cakes: 480 ÷ 28 ≈ 17.1
  2. 20 cakes, the same as before, since fixed costs didn't change
  3. 11 cakes, since 480 ÷ 44 is about 10.9
  4. 17 cakes, rounding 17.1 down
Show the answer

18 cakes: 480 ÷ 28 ≈ 17.1

Right. Profit per cake becomes 44 − 16 = 28. 480 ÷ 28 ≈ 17.1, and she can't sell a tenth of a cake, so she needs 18 to cover everything.

THE DECISION RULE

Decide now what would make you change course

Runway tells you how long you have. A decision rule says what you'll do with that time, written while you're calm: 'If by the end of month 4 I'm below 15 cakes a month, I change one big thing: price, a fixed cost, or where I find customers.' Without it, people tend to either quit too early after one bad week or keep spending long after the numbers said stop.

Taraneh also wrote one line she won't cross: she keeps her part-time job until the business covers its costs and pays her something for three months in a row.

Check yourself

If Taraneh sells 15 cakes a month from the start instead of 10, her 1,200 still lasts about 5 months.

Show the answer

False

False. At 15 cakes, profit from sales is 15 x 24 = 360, so the burn is 480 − 360 = 120 a month. Runway = 1,200 ÷ 120 = 10 months. Five more cakes a month doubles the time she has, which is why the runway line depends so much on the customer lines below it.

TARANEH'S PAGE, part 3: customers and the books

  1. Warm network (lesson 8)

    A list of 60 names. Ask each for introductions to parents with a birthday coming up, not for support orders.

  2. Direct outreach and online (lessons 8 and 9)

    The school parents' groups, with a short personal message. A page with real cakes, prices in every post and a delivery line. Count messages per order.

  3. Keeping customers (lesson 10)

    Note each child's birthday. Message two weeks before next year's. After every delivery, ask what she'd change and ask for two names.

  4. The books (lesson 11)

    A separate card. Every sale and cost recorded on the day. A 30-minute check on the 1st of each month, ending in one decision.

Check yourself

Which part of Taraneh's page does each line belong to?

  • 20 cakes a month to break even
  • Message parents two weeks before next year's birthday
  • A separate card used only for the business
  • Ask for two names after every delivery
  • A 30-minute check on the 1st of each month
  • 5 months of runway at 10 cakes a month
Show the answer

Numbers: 20 cakes a month to break even, 5 months of runway at 10 cakes a month

Customers: Message parents two weeks before next year's birthday, Ask for two names after every delivery

Running it: A separate card used only for the business, A 30-minute check on the 1st of each month

Your own page. Seven lines, then a date.

| Line | What goes on it |

|---|---|

| Customer, problem, offer | Who, their problem in their words, your one sentence with price and next step (lessons 1, 2, 7) |

| Evidence | Your pass mark, and what people actually paid for (lesson 3) |

| Numbers | Price, profit per unit, margin, fixed costs, break-even, cash, runway (lessons 4–6) |

| Customers and books | Where the first 10 come from, how they come back, how you record and check (lessons 8–11) |

| Rule and review date | What makes you change course, and when you'll next look (this lesson) |

Keeping the page alive

  • Put the review date in your calendar now. Once a month, update the numbers from your books, not from memory.
  • Change one thing at a time, so you can tell what worked.
  • Nothing in this course guarantees a profit. Many good small businesses take months to reach break-even, and some ideas don't work. The page makes sure you find out while you still have cash.
  • Tax, registration, food safety and other permits differ by place: check your local rules, and ask a professional when the stakes are real.

Check yourself

Month 4 review. Taraneh sold 10 cakes a month for three months, so 1,200 − 3 x 240 = 480 cash was left. In month 4 she sold 12, so the burn fell to 480 − 12 x 24 = 192 and 480 − 192 = 288 is left: 1.5 months of runway. Her rule says: below 15 cakes by month 4, change one big thing. What does her page tell her to do?

  1. Keep everything as it is, because sales are rising and it may take off
  2. Spend the remaining 288 on ads in one push to reach 20 cakes fast
  3. Follow the rule now: pick one big change and set a date to check it
  4. Close the business today, because she hasn't reached break-even
Show the answer

Follow the rule now: pick one big change and set a date to check it

Yes. That's what the rule is for. With about 1.5 months left she still has time to act: for example, try a higher price, cut a fixed cost, or put her hours into referrals and past customers. Then check the result on a set date.

Lesson recap

  • One page is enough: customer and problem, offer, evidence, numbers, getting customers, keeping them, the books, and a review date.
  • Evidence on the page is what people paid for, measured against a pass mark you set first.
  • Break-even = fixed costs ÷ profit per unit; runway = cash ÷ monthly burn. Round break-even up.
  • Write a decision rule while you're calm, and follow it at the review.
  • Review monthly from your books, change one thing at a time, and check local rules.

Keep it, don't just read it

Pathwise brings each idea back just before you'd forget it, with a quick question. Free on Android and on the web, in English and Persian.

Cafe Bazaar Myket Open the web app

All lessons in this course

  1. A problem worth solving
  2. Your customer
  3. Test it cheaply
  4. Pricing
  5. Costs and margin
  6. Cash flow
  7. Your offer in one sentence
  8. Your first ten customers
  9. Selling online
  10. Keeping customers
  11. Simple bookkeeping
  12. Your one-page plan