You have a fantastic idea for a new home based business. You have decided on your niche and you know who your target market will be. You have an estimate for your income potential and you are ready to start. Now, before you do anything else, you need to prepare a business plan.
Getting a business plan ready does not have to cause anxiety. It is not as difficult as some people think. There is some paperwork involved that is a necessary part of building your plan. Because of this too many new business owners skip this important step. A business plan will greatly help you and should not be avoided. It brings a reality to what you are doing and makes you think about every aspect of your business. A good business plan will help you adjust things, realize areas you need to improve and can help you avoid some costly mistakes in the future.
A business plan is also a very important tool for attracting the interest of people that may be able to assist you. People take you more seriously when you have taken the time to create your business plan. A good business plan makes you look more professional and shows that you comprehend what it takes to start and manage an online business. If you are in need of optional funding sources, then an effective business plan is an absolute must.
A good business plan does not have to be complicated. There are five areas that need to be covered when writing your plan.
1. Executive Summary – It is suggested that you actually write this last. This section will summarize your business plan and it will be easier to write this after you have composed the other sections. This is a very important section since some readers will not read anything else. It really isn’t difficult. Thoroughly read over your business plan before you start writing your executive summary. List the information that you consider to be the most important and that will grab the attention of the reader.
2. Company Overview – Here you will explain what you have in mind for your business. You will present a mission statement of the goals and objectives for your business. The mission statement will answer questions such as: What am I selling, promoting, marketing, etc? Who will I be attracting to my website? Why am I selling or promoting this product or service? Each business will have its own unique questions to answer of course. Your synopsis of these points should be brief and to the point. Be careful not to confuse goals and objectives. When you want to accomplish something then you make a goal. Objectives are the plans you make in order to accomplish your goals.
3. Business Environment – You need to gather some information relating to your industry. You should do some research into your market and competition. This will assist you to offer something that will make you stand out as different. You should also know your future customers and understand what it is that they are looking for. The more you know about them, the more likely they will turn into repeat customers. Take a candid look at the field that you are going into and pay attention to the structure, trends and possible barriers.
4. Company Description – Your company is not just the sum of what you sell or promote. It is also who you serve, what resources you use, the type of people you hire and more. In this section you should give the details of your business. You also need to explain in a one-sentence statement what sets you apart from all your other competitors. This is known as a Unique Positioning Statement (UPS).
5. Action Plan – The final part is the action plan. This outlines the steps you will be taking to make your plan work. These steps should also reflect the goals and objectives that you have outlined in your company overview section.
These are the primary parts of a business plan. You may also need to include a financial section if you are considering the help of a bank, lender or backer to help in your business. A financial section will require more market study, thought and planning than the other areas as it is based on assumptions you make about potential income. Remember the most important thing is to base any estimates that you make on realistic expectations and not overly optimistic dreams.
With this information and some helpful models, you will be well on your way to completing your effective and professional business plan.
Get more information about one of the first things a home based business needs, an employer identification number.