| The road is littered with people who got very excited about creating a home business but never developed a plan to carry it out. More than a few thought, "I just want to open a little business from my house." The success of any business idea, no matter how grand or how small, depends on planning. Most small home businesses don't call for elaborate business plans. A lengthy and detailed plan is needed if you decide to seek financing from third-party lenders such as banks, investors, or venture capitalists. Realistically, they want to know how viable the company is before they lend you money or invest in it. Think of a business plan as your map for the journey you are about to go on. This map will direct you through places you have never traveled before, such as marketing, financing, and managing a new business. Don't assume that you know the way on a road you have never traveled. Write this down For free step-by-step instructions on writing a business plan, visit the SBA website at www.sbaonline.sba.gov/starting/indexsteps | Basically, a business plan is composed of four parts : The components are: (a) description of your business, (b) marketing plan, (c) financial plan, and (d) management plan. Why you should write one: -
Helps to clarify what it is you want to do and exactly how you plan to do it. -
Creates a map for you to follow and refer to as you go along. -
Provides the necessary information should you seek third-party financing from a bank or investors. -
Helps you to project your business into the future. -
Makes clear how you will market, finance, and manage your new business. -
Highlights who your customers are and where they can be found. -
Description of Your Business: Keep these questions in mind when writing a description of your business: -
What is it you plan to do? -
What is your product? -
What is your intended legal structure? -
How will this product benefit your customer? -
Where will you run this business, and how much space will you need? -
Will you need storage; if so, how much and where? -
Marketing Plan: When putting together a marketing plan for your company, consider some of the following questions: -
How do you plan to market this new business? -
Who are your customers? How old are they? Where are they? What sex? Income level? Education level? -
Do you know what your customers like and dislike? Do you know what they expect? -
How will you attract and hold this market? -
Who is your competition? Where are they? -
How is your competitor's business going? What are they doing right? Wrong? -
How is your competitor's product or service different from yours? -
How will you price your product or fees for services? -
How do you plan to advertise your product or services? -
What portion of your budget will be designated for advertising and promotions? -
Financial Plan: This is a major component to any business plan because it takes money to make money. You should be able to answer the following questions: -
How much money do you have? -
Who will maintain your financial records and how will they be kept? -
How much money do you need to open your business? (Start-up Costs) -
How much money do you need to keep your business open? (Operating Budget) -
What is your monthly operating budget for the first year? -
What is your break-even point? -
How long will it take for your business to be profitable? -
Management Plan: Let these questions help you as you write a management plan: -
How are you going to run this business from day to day? -
Will you run this business alone or will you have partners , employees , or both? -
How does your background, education, and experience prepare you for this new venture? -
What are your strengths and weaknesses? -
What are the qualifications of the people who will be working around you? -
What is your job description and responsibilities? -
What are the job descriptions and responsibilities of the people who will be working with you and for you? -
What are the hours of this business? Salaries? Vacation schedule? Benefits, if any?  |
