Why Having a Business Plan is So
Important for a Home Business Owner
A business plan is an important piece in your strategy to run your home based business. It is the road map of your goals for the next 3 to 5 years.
It tells you the steps you need to take to achieve each goal. By having a plan, you essentially provide you with step by step strategy to build your home business.
As you go through each step, a regular review of your business plan gives you more goals to add along with the strategy to get you there.
A good business plan will make your business credible and understand by someone else. Your business will become an asset and you can sell it in the future if you want to.
Having a business plan will allow you to have a set of plans so someone else can take it over and understand how to continue to run it.
One of the primary reason to have a business plan it to have a tool to present to the IRS if you are ask to have an audit. The IRS considers a business plan to a key piece in determining that you are a Home Based Business.
Here is the format for a good business plan:
Mission Statement
You start out by defining Who your customer is, what product or service will you provide to your customer and what your business that sets you apart from similar business?
A mission statement sets apart what is important and what is not and can bring your business back on track if you have veered off course.
Business Description
Describes what your business is about, different from a mission statement, this just tells what your company does.
Competitor Analysis
With whom are you competing?
What hole in the market will your company fill? How business is conducted.
Marketing Analysis
Who is your target audience?
List your prospects characteristics, location, age, etc.
Marketing Plan
How will you sell your product?
What promotions and ads will you run?
What would they cost?
How often will you run them?
Operations Plan Outline
How will you do business and carry out your steps to achieve your goals?
This is important to keep a record of in case you plan to sell your business in the future or pass it down to a family member to run.
Financial Plan
How will you make money?
What will spend it on?
How much will you profit?
If you seeking venture capital for the business, a more formal plan is required to promote to investors and banks.
If you are just writing a business plan for yourself, you can find many templates online to help you understanding of what will be involved for you to succeed.