Starting a Law Firm – Creating a Business Plan
The practice of law is a profession. But for many solo practitioners or small firm owners, it is also a business. As such, when starting a law firm, a business plan is absolutely necessary. Just like in any other small business, the business plan will require a marketing plan, budget, and financial projections. But, in my experience, the similarities between starting a law firm and starting another type of business end there. This is especially true in the modern economic climate.
You need to know what type of capital you are working with. It does not take a lot of money to start a law firm. But it does require some careful budgeting, especially if you are trying to start on a shoe string. Many businesses fail because of inadequate capital. One mistake here and your business is going belly up.
2) Financial Projections.
By definition, a projection is not reality. But you still need to analyze your estimated revenue, break-even point, monthly expenses, etc. I would only do it for the first twelve months, because anything beyond that is too unpredictable. Even the first twelve months is unpredictable. It is important to be conservative on your estimates, and define your assumptions.
3) Marketing Plan.
The marketing plan is the most important piece of your business plan. You need to have a solid plan of how you are going to get clients. Without clients, you don’t eat. An essential element of your marketing plan is your website, and figuring out how to get people to your website. Learn about search engine optimization, and not the kind you pay for, but the organic kind. Make a list of everyone in your network and let them know what you are doing. Attend events and make more connections. Get your name out there. But create a plan of how you are going to do this. Otherwise it won’t get done.
Look, I understand that if you are making a presentation to a bank for a loan, you are going to need a detailed business plan, complete with executive summary, competitive analysis, appendices, and the like. I am not saying these things are not important. But in this economy, most people are like me and are not going to obtain a business loan for our law firm startup. The profession of law is a people business. We need a plan to get out there and let people know about our services. We need a budget. Then we need to put in the effort to turn our network into referrals, and our referrals into client.