Planning Your Home-Based Business
by Phil Hanson
Every business needs an intelligent, workable plan. From conception to inception to execution, successful businesses rely on planning to keep them on track for reaching their goals. Intelligent plans are the glue that holds successful businesses together.
If you need to borrow startup capital, potential lenders demand that you have a fully developed business plan, in writing, before they’ll even consider loaning money to you. Your thoughtful answers to the following – and other – questions will help lenders determine your ability to repay the loan.
What kind of business are you going to run? Will it be based on wholesale or retail sales? Or will you provide professional or craftsmanship services of some kind? Does import/export figure into your business? Where do your targeted customers reside? Serving a local clientele is usually less complicated than serving a national or international one. How will you reach your customers and, more important, how will they reach you?
When you create your business, what will you name it? What kind of legal structure will it have? Options are sole proprietorship, partnership, joint venture, corporation, sub-chapter S corporation or limited liability corporation. You need to decide which one is right for you and incorporate it into your business plan.
How will you finance your business? Does a ready market for your product or service already exist? Should you create product demand, or cater to an existing demand? How will you deal with growth? How will you pay business debts? Will you need to hire workers now, or in the future? What are the long-term prospects for your business? Could economic changes or unanticipated government regulations compromise your business?
A comprehensive plan will help you deal with contingencies if and when they happen. Strong planning helps businesses anticipate problems before they arise. Your business must be flexible enough to accommodate changes brought about by external factors that can affect it, and a solid plan allows for that kind of flexibility.
Failing to plan is tantamount to planning to fail. Make a good plan, and review it often. Revise your plan whenever external conditions indicate that changes are warranted.