Creating a Business Plan in 6 Steps
The best way to realize your home based business dreams is by creating a business plan. Should the very idea of writing organizing your hopes and dreams confound you, simply re-frame the way you think of it; a business plan employs the same skills as preparing a shopping list on a tight budget or writing your company's resume. An effective business plan is simply a comprehensive written statement that outlines your business and expresses a well thought out plan of action. It can be short or long; it just needs to be realistic.
Getting Started
Now is time to gather your careful research, infinite assumptions and disjointed thoughts on paper for critical review. Trust yourself, pay attention to detail and focus your energy into writing.
The type of business plan you write will be dependent upon the purpose you have for it. Will it help your business get a loan or grant (if so greater details and projected profits will be required)? Is it for guidance as you develop your business (if so, you can write a less formal plan that can be adjusted as you learn and grow)? Your business plan may be for both of these reasons. Another consideration is the type of business and market it will serve (e.g. intangible services or products requiring inventory will require attention to different details).
Whatever your business model is, the business plan is a necessity. The aspiring entrepreneur who cannot or will not write a business plan will eventually run into trouble. Remember there are no concrete rules, standard formats, wordings of headings, or even finished product looks. Keep in mind that banks you will not be as concerned by your format as by the realistic goals that are set (of course the quality and appearance of your business plan will also present your level of professionalism).
Below are 6 steps that will ensure a successful business plan:
1. Describe Your Company
Create a business mission statement and company overview. Consider the core values that your company has and how these values are to be woven into the products and services offered.
2. Products and Services
State the exact nature of products or services to be sold; identify ways your business is different from competitors, and define the benefits of using your business. Consider who your target markets are and why they should buy from you; consider where to find more clients.
3. Marketing and Sales: Define Your Market
Price your product or service. Know your customer profile. Consider what you can afford and what you must do to promote your business; consider how you will attract, keep and expand your market share.
4. Forecasts
SWOT is the strengths, weaknesses, opportunities, and threats you perceive integral to your chosen market. This is your "best guess" and "worst case" scenarios.
5. Management Team
Introduce your team, job descriptions and responsibilities. Include plans for hiring and training personnel (if any). Decide who will report to whom and who makes the final decisions. Recognize your strengths and weaknesses (and those of your team if you have one) so that you can identify the type and number of personnel that must be hired or the work that must be outsourced.
6. Financials
It may include a personal financial statement, a break-even analysis and a 12-month profit and loss projection. This is important when applying a loan, but it is also important for developing a strategy for the best use of the funds you already have. When this is done, you are ready to send proposals to lenders and/or investors.
Remember: a well thought out business plan will assist you in moving your business forward, help you access and utilize resources, target concepts that work, and prepares you for problems and opportunities. It is true that people who fail to plan have really not given themselves an opportunity to succeed.
The experts agree that if you take the time to do your business plan properly, you will have created the solid foundation and cornerstone for your new venture and will not regret your efforts.
