Business Planning is the Key to Starting Right There’s an old saying that goes, "if you want to make God laugh, make a plan." But if you're starting a home business - and you want to make God and your competitors laugh - don't make a plan. A business plan is a living document, […]
It all starts with a plan. How much time can you invest? How much money? Why are you doing this? What do you want to accomplish? What are your interests. You know the saying: Failure to Plan is Planning to Fail”. It couldn’t apply more to starting a home business. Get this right and you’re off to a great start!
Business Planning is the Key to Starting RightThere’s an old saying that goes, "if you want to make God laugh, make a plan." But if you're starting a home business - and you want to make God and your competitors laugh - don't make a plan. A business plan is a living document, one that you must keep reviewing and updating if it is to be effective. However that doesn't mean that it should be as detailed as a legal document. The most effective business plans are those that can be completed and maintained in a reasonable amount of time. It's better to have a short business plan that can be reviewed and implemented regularly rather than a long detailed business plan that is forgotten once it's written. A business plan has certain key elements that should be adhered to and are found in even the surest of business plans.
The Key Elements of Good Business planning
Your mission statement:Every business has a mission, a reason, a purpose for being. A good mission statement should accurately explain why your organization exists and what it hopes to achieve in the future. It needs to express the business's purpose in a way that inspires commitment, innovation and courage. It should be made up of three key elements: 1. What's the purpose the organization? 2. What needs does the business address? 3. What are the values of the organization? Finally, it should be short enough that anyone connected to the business can easily repeat it.
The marketing plan:Niche market: describe the focus or niche of your main market, looking at these four elements, ideal customer, products – services for your niche, the strategy to attract customers and communicate with your niche and the tools and skills that you will need to implement your marketing strategy. You will need to know how to track your success in the number of sales, client, referrals or any other indicators and your successes must be easily measurable.
Financial planning:To begin with it's important that you state clearly your main financial goals. One or two sentences should be enough to describe what you expect from your business financially. Identified the source of your basic income, your basic expenses and what your profit goals are for the business. What is your projected income – what do you expect your average monthly revenue to be and by what date. What are your projected expenses – what do you expect your average monthly expenses both ongoing and one-time setup cost. What is your projected capital – what is the amount of cash you will need to pay the bills until your income from the business is higher than the expenses. Here also you will need to track your successes; in fact with financial planning it is even more important to track your successes. You can do this by tracking certain key performance indicators such as monthly expenses or monthly sales. Financial planning is so important to your business that once you've identified your basic income, expenses, and capital you should consider seeking professional advice. This one step could save you a great deal of money and heartache going forward.
Your action plan:You need to have two types of action items, short-term and long-term. You can arrive at these action items by reviewing your marketing plan, financial plan, answering questions about your target market, studying your competitors and reviewing your resources, and then you can begin identifying your needs and objectives. After you've completed identifying your business objectives begin to itemize and prioritize them into a long and short-term list. Your action plan is a natural lead-in to our final topic:
Review - Review – Review:Establish a timetable to review your business, one that works for you and one you can stick to. Regularly evaluate the progress of your actions goals, determine a time frame for your business. Established businesses, often, use a quarterly review plan; however if you are just starting a home business, you may find it beneficial to evaluate your business plan more often, such as weekly or monthly. An annual review of the overall business plan will allow you to update refresh and modify as necessary to meet all the goals you have identified and this is a good time to set new long-term goals as well.
Business Planning is the KeyBusiness planning is how you establish a solid financial base for your business. A business plan is not only a valuable managerial tool, but it helps you focus on developing a course for your business and its future. One of the main reasons for creating a business plan is to help you avoid pitfalls that commonly lead to business failure. A business plan allows you to evaluate every segment of your business and develop a series of strategies for coping in an uncertain environment. And finally, last but not least, a business plan is a way of attracting capital to help you launch a new business or boost your existing one. To your Success! Tom Renfro P.S. If you found this article helpful check Kristie Newland's article, “When Starting a Home Business Do You Need a Business Plan?”
When Starting A Home Business Do You Need A Business Plan? Starting a home business is a big step towards freedom from your J.O.B. Congratulations! The next question is do you need a business plan for a business that is brand new and hasn’t made a dime. The answer is a resounding “YES!” One […]