While starting a Home Business is the goal of thousands of people the world over, running one successfully is the achievement of just a few. There are many reasons why businesses, despite their apparent potential for success, fail. Chief among these is lack of a viable business plan.
Advantages of a Well Prepared Business Plan:
- It will help you address all the aspects of your business and ensure that you are capable of handling them
- A well drawn up business plan is the basis for requesting financing
- It will provide focus to your actions
- It will serve as the basis for future expansion
Elements of a Home Business Plan:
A home business, by its very definition, is a small-scale business that can be run from home. It does not require considerable investment in infrastructure. A home business is run primarily on the inherent skills of the business owner.
- Define the nature and scope: This should include the nature and scope of the business.
- Product/Service Definition: Details of the product to be produced or service to be provided. Your product should also have a USP (unique selling point) to help it stand out from the competition.
- Demand Assessment: The success of your business depends on the demand for your product or service.
- Licenses and Permits: List all the required licenses, permits, trademarks and patents to be registered.
- Financing: Home businesses are largely self-financed or financed by small loans. You need to estimate the financial requirements to set up the business and meet initial demand as well as meet projected demand for the short term.
- Break-Even Period: Profit is the guiding principle of every business. You need to calculate how long it will take to recover his costs and when you can start earning a profit.
- Customer Definition: You need to identify your customer. Ideally, home business should be located in the vicinity of their natural customers so that sales and distribution costs are minimal.
‘Look Before You Leap' is an adage that has stood the test of time. A well drafted business plan for a home business will help you make sure that you are able to set up and run your business effectively, protecting you against wasted time, effort and money.