Ok... so you've finally reached that stage in the development
of your home business to get started. You've done the research,
you have a game plan and you're ready to go except for one
small detail... you need money. Whether it comes from a loan
or from investors it doesn't matter but you need a good dose
of seed money to put all your hard work and planning into
action. However, regardless of who hears your money pitch
before they give you a dime they will want see your business
plan.
Business Plan - What Is It?
A good way to think of a business plan is that's it's a document
that provide answers to the type of questions anyone who may
provide financing would like to know about your home business.
You will not get outside funding without one, because the
people giving you the funding will insist on one because it
helps them to know that you’ve thought through what you’re
proposing to do. A business plan says to them... "I’ve
considered this from every angle, and here’s what I’ve
come up with".
Business Plan - What Does It Include?
What is your product or service? This is the first question
every business plan should answer. You must explain in the
clear, concise language what in the world you plan to produce
or what service you plan to provide. You will also want to include why you've chosen this particular product or service.
Who are Your Customers?
After you've explained your product or service, the next step
is to identify who you plan to sell your product or service
too and why. The demographics (age, sex,language, country, state or city, income, etc.) You need to
clearly identify your customers in order to properly target
your advertising, packaging, pricing, et.
What Makes You Different?
You need to identify the "primary factors" that
will make your business different than other businesses you'll
be competing with. What niche are you filling that they are
not or what do you plan to do to fill a particular void in
the market that you've identified?
What are Your Expenses?
Your start-up expenses include any equipment that you need
before you can get up-and-running, while your day-to-day expenses
are staff costs and supplies.
Following is a Simplified Example of Business Plan
This a a simplified and shortened version of a business plan.
In the real world... each one of the following sections would
be 1 - 2 pages in length. That being said... in most instances
it's better to be as brief as possible. Only add information
if your potential backers request it. It's a bad idea to go
into too much detail in your plan. You’re not trying
to explain everything down to the nth detail, just the basics
of the business and why they should give you the money you
need to launch it. And always focus on profit.
Catering Plus
Nature of Business: The business will be a home-based
catering company, producing luxury food for special occasions
such as birthdays and weddings. We will provide a comprehensive
catering service, while specializing in high end customized
cakes, which have a higher profit margin than other foods.
Target Market: Our catering business will be aimed
at middle-class customers who desire a top-of-the-line catering
but must operate on a budget. Our initial market area will
consist of Mytown and the affluent area of Theretown.
Key Factors: We will only use commerical grade ingredients
purchased from wholesalers and provide top quality design
and service. This will allow us to provide food that looks
tastes great, while keeping costs as low as possible.
Expenses: Beause I will be using my kitchen and making
the food myself, there are only two real expenses: The purchase
of an industrial grade mixer and then the day-to-day cost
of supplies. I've attached a suppliers’ letter listing
prices. Our research has shown that this supplier offers the best value
for start-ups.
To wrap it up, you should include a breakdown of both projected
profit and loss per month (in graph form)for the first year
in business. Show one-time and day-to-day expenses versus
projected profit to indicate how you will pay-off your loan. Your business plan should show you making enough of a profit
each month to live on – if it doesn’t, then it may
be considered unfeasible.
Study a Few Real-World Business Plans
The best way to get a real a feel for the dos and do nots
of a business plans is to find real-world plans that have
already been approved and study them. A good place to start
is the internet. Once you’ve studied a few, you will
get a better feel for how much work will be involved in putting your business
plan together. Remember, until your business exists for real,
the business plan is the only tool you have to sell prospective
backers on how great your business is going to be.
