Your business plan is a hypothesis — test it

Plenty of online financial advice (including mine) says you need a business plan before you start your business.

And yes, you should absolutely write one. A business plan helps you think through who your customers are, who you’re competing with, what you want to sell and how much you need to charge for it.

In fact, if you’ve never written one before, set some time aside this week to do so. Here’s NerdWallet’s guide to business plans.

But the business you start probably isn’t the business you’ll be running in one, three or five years. So think of the plan you’ll write this week as a first draft. You’ll need to rewrite it again and again as you figure out what works. 

This month, I spoke with two business owners about how their companies evolved in the first few years:

Here’s how they tested, learned and revised their approaches.

Williams started The TW Collective after a layoff in spring 2025. Since she’s working on her doctoral degree in business, she’d already been thinking about consulting. The layoff pushed her into action.

Because she took on clients fast, Williams had to figure out her services and price points on the fly. She started by charging an hourly rate close to what she had earned as a W-2 employee. (After clients insisted she was undercharging, she’s upped that.) She said yes to almost every client ask.

“My car payment’s due, so I’ll take it,” she says she thought at the time.

A turning point came about two months in, when an early client asked her to go beyond her usual human resources work. Instead, Williams found herself contacting vendors.

It felt clear that she needed to define her services. So she started reviewing her peer businesses’ websites. She created a focused list of services with price points, kind of like a menu. 

“It helped me have more firm boundaries around what I do and what I don't do," Williams says. Previously, she felt bad telling clients no, even for things outside her scope. But now, “there's no gray area."

Williams revisits her menu regularly and adds new items when she starts to see client demand shift. For instance, she started charging for speaking engagements as clients kept asking her to share her expertise on panels. 

Her advice: "Especially in your first year, it's OK to go back and revamp all aspects of where the business is going, because you might start out with one set of services and realize you don't want to do that anymore. And it's OK to pivot."

Crystal Frehner launched Hottie Hair after working in other salons for a decade. She started with the business model she knew well: Every stylist rents a chair, finds their own clients and keeps their own books. 

But once she was in charge, problems became clear. Stylists could come and go, sometimes several at once. She also had little control over her customers’ experience. When someone had a bad experience with their stylist, Hottie Hair got the bad review. 

"I learned a lot about brand management from the very beginning," Frehner says. "If I'm going to be taking the brunt of things when people have a bad experience, then I want to be the one responsible for it."

Frehner felt this deeply early on. But over time, she says she learned to “look at it like a math problem.”

The challenge: a consistent client experience. The solution: a different business model where stylists were employees, not their own independent business owners.

Over time, she and her husband, Mike, began to evolve away from the chair rental model. As stylists left, she hired new ones as employees. She now requires them to train internally. They earn an hourly wage at first, then qualify to earn commissions. 

Beyond that, as Hottie Hair’s extensions business started to take off, they began sourcing and selling their own hair extensions to have more control over quality.  

Frehner’s advice: "If something's working, pour gas on it. Sometimes as business owners, we want to pick out what's not working and hyper-focus on that. But mold your business into what's working."

Again, a business plan is a critical early step for every business owner. It forces you to think through what you offer, how it’s unique, who it’s for and how much you need to sell. Here’s how to write your first one.

But what Williams and Frehner reminded me is that your early draft is a hypothesis. You can research the market and study your competitors, but it’ll take lived experience to find out what works and what doesn’t. Every customer gives you data. 

So take the time to write your first draft. Make it as detailed as you can. Then, get started.

Pay attention to what clients keep asking for and what you start to dread. When you experience strong demand, consider raising your prices. If you find yourself avoiding a particular service, see if you can take it off your menu. 

And if something works better than you expected, do more and more of it. 

"It's OK to not know what you're doing," Williams says. "Once you get your first client, you can always go back and move and wiggle and fix things as you can."

NerdWallet’s Karrin Sehmbi finds and shares these grant opportunities.

Jobber is currently offering a total of nine grants for home services businesses, ranging from $10,000 to $100,000.

The total of $1 million in grant money breaks down this way:

And if the money alone is not enough to entice you, perhaps you’ll be swayed by the all-expenses-paid retreat to learn from Shark Tank’s Daymond John.

Jobber is a full-service software product designed to help small home service and trade businesses run their day-to-day operations. As part of its mission to help these businesses succeed, Jobber has been running its grant program since 2021.

The application form asks for basic business info like your name, email address and industry — all questions that take only a few minutes to answer. 

But there is one question requiring a free-form response that asks how your business demonstrates excellence in one or more of four listed areas. You’ll probably want to spend a bit of time drafting and proofreading this response before pasting it into the online form.

Get your application in by June 11!

Click here to see the application.

Grant applicants must be current or aspiring home service business owners who live in the U.S. or Canada and are over 18 years old. You must also be an active member of Jobber’s Home Service Community Forum. 

If you’re just getting started on your business journey, take a look at our list of 16 business grants for startups. The page also includes information on government grants and resources for startups.

This month, NerdWallet launched a new Consumer Financial Resilience Index. This monthly figure measures Americans’ feelings of financial security and strength, plus how optimistic they feel about the near-term future.

All these feelings influence how consumers spend their money — including how they spend their money at your business.

Findings from the May survey (methodology here) include:

I see two takeaways for current and future business owners here.

First, know your customers. You don’t have to ask everyone how much money they made last year. But in general, what age groups do they fall into? How freely do you think they spend money? Are they shopping around for the best price? Put yourself in their shoes to think about how well your marketing and pricing speaks to them. 

And second, adjust your expectations given the broader economy. Uncertainty is high right now due to rising prices on gas and food, political uncertainty and more. That doesn’t mean you can’t establish your business or see some early success. It just might be slower or less profitable than you hoped.