Making a Business Plan
Posted on March 28th, 2008
So how do you prepare a business plan. A business plan is simply a road map. It sets out your goals. It outlines where you’re going with your business and how you plan to get there. As a home-based business you will probably not be seeking investors or getting a loan to start your business, so preparing a business plan is not for someone else’s benefit. It’s for you, so you’ll know what you’re doing and how you’re doing at each step along the way. Having such an operating plan to guide your daily activities can prevent you from making costly mistakes.
1. Three descriptions of your business. Three brief statements, one of 25 words, one of 65 words, and one of 125 words, that describe what your business is, whom you serve, and what benefits you provide will help you know precisely what you intend to do and will enable you to talk successfully about it with business contacts, potential customers, and clients.
You can use the 25-word description as part of your standard introduction of yourself and who you are. The 65-word description is the answer you can give to the question, “What do you do?” or your reply to the statement “Tell me more about your business.” The 125-word description can be used as the basis for writing proposals and advertising and brochure copy describing your business.
2. A plan for how you intend to market your business. Identifying as thoroughly as possible the people who need what your business has to offer and how you will let them know about your business can help you select the best marketing methods to make sure you have enough business. In this portion of your plan you should:
• define exactly who your customers or clients are
• identify who your competition is
• clarify what advantages you have over your competition in terms of price, service, quality, variety, ease of use, and so forth
• determine how big your market is and if there are enough buyers for you to reach the level of income you desire or need
• identify how you will let the people who need your product or service know about what you have to offer
3. Financial projections. Identifying how much you need to earn in order to survive and thrive, and then checking out the going prices in your community, can help you know what you will need to charge and how many clients or customers you will need to have each month to reach your income goals. You should also identify which start-up expenses you will have and identify how long you will need to supplement your income before your business can support you. Keep in mind that a business can take anywhere from three months to over a year to turn a profit. So you should have a plan for how you will cover your living and operating expenses during that period. Some people advise that to be on the safe side you should double the time you think it will take you to break even. With careful planning, however, most home businesses are basically able to finance their start-ups themselves.
