One of the very early steps for a person who is intending running a home based business is to write a business plan. To those who have not been in business before this may seem to be a task that is beyond their imagination but even the most simple business plan is better than none at all.
If you have no business plan it is like trying to find your way around a room with a blindfold on.
You won’t know which way you are going, what obstacles may cause problems for you and eventually you will lose your way and come to a slow grinding halt, scared to move in any direction because of the risk of failure.
The Benefits Of Having A Business Plan
Having a written business plan will help you keep focused on the aim of your business. It will also help organize your thoughts and bring them together in some sort of order which you can use to help you go forward with your business operation.
If you are going into a partnership you will definitely benefit because you will have down on paper all the thoughts of the partnership and it will help both owners stay focused on the same goal.
Dealing With Finance In Your Plan
When you have all your assets and costs written down you to have a clear picture of what cash you have, how much you own in business assets, what finance you need to arrange and how you are going to pay back any finance that you borrow.
If you are in a partnership you will be able to have in your business plan any differences in funds being added in to the business by each partner and how the partnership plans on handling the repayment to each partner.
Once you know your financial situation you will be able to go ahead with your set up cost analysis and the financing if you are borrowing monies.
Another extremely important piece of analysis to look at is a plan for marketing. No marketing or marketing incorrectly can make or break a small business.
By having this set out in your business plan you will have a much better idea of what you need to do, when you need to do it and how you are going to fund it. Then when you know these details you can go ahead and write a more detailed marketing plan which you should include with the business plan if you are going to be presenting it to any lenders.
Know Your Competition
Another point of your business plan is to assess the competition.
When you go into business you need to know:
- who your competitors are
- where they are
- what they sell
- the price of their products
- how active they are with their marketing
- how active they are in changing products
- what threat they will be to you
You can see the important role that a business plan plays in setting up your business. Most new business owners are so keen to get their business up and running that they do not complete this step, but believe me, you will be sorry if you do not. Your small business has a much greater chance of success if you look at all the criteria before spending any money and getting so involved that you feel you do not have time to put a business plan together.
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