Starting a Home Business - How to Write a Business Plan That Guides Your Success!

Writing a business plan isn't optional just because you consider this simply a home business. You are a small business owner. A written business plan is required to secure finances or investors in your new home business. Starting a home business with your own funds and ideas doesn't mean you don't need a business plan.

A written business plan is critical to every home business. The thought process and research involved in writing your business plan will reveal the blue print for your home business.

There are numerous paid and free business plan products that you can use to develop your own home business plan. Unless you are seeking investors in your small business, you can learn how to write a business plan that keeps your business working toward your goals. To have a well written small business plan, you will find your goals easier to reach and keep track of your progress both with building your customer base and sales.

Starting a home business without a writing a well thought out business plan is like building a house without a blue print to guide you every step of the way.

Your home business foundation built on these eight areas will give your business a strong identity and focused sense of direction to help you plan and manage your business effectively.

#1) Business Summary.

Write out a description of your business. What kind of company do you want to build? A well written description or summary of your business often propels you through each step of how to write a business plan. Writing the summary first means you will always have the basic premise of your home business idea at the top of everything you put in your business plan.

#2) Name Your Business.

You may think that your direct sales business already has a company name but that is not the name of YOUR business. Creating a distinct name for your business will help make your plan. Does your business name reflect what you offer? Is it easy to remember? Does it have strong branding potential? Should you reconsider your current business name if it not working with your product? Make sure the name of your business fits not only your product or services but your mission statement.

#3) Itemize Your Products or Services.

Write out descriptions of your products; how do they look, smell, taste, feel or how your services will help others reach their own goals in life. How will your offerings improve the lives of others? Sort through why others aren't already doing it and if they are offering exactly what you are going to offer then what prevents the competition from doing it better or more cheaply than you are.

#4) Mission Statement.

Your mission statement is a concise clear summary of the goals of your business. In your mission statement, you will define exactly what your business does, the products or services offered and what makes your business unique above the competition. Writing the bottom line of your business goals into your mission statement will guide the rest of your business plan.

#5) Business Assessment.

A major portion of your home business plan is a detailed assessment of four areas: your strengths, your weaknesses or limitations, business and marketing opportunities and threats or barriers to your potential success. At this stage of your business plan, you will be looking at your industry. Your work experience and talents that will add to your business would fall under your list of strengths. Your lack of knowledge or funds could be listed as your weaknesses. Take into account how broad your industry is when you are looking at your strengths and weaknesses. If you have little money for start up then you will need to be creative in your marketing and running your business. Will your weaknesses mean your opportunities for success are limited? Will your talent surpass your lack of funds?

Opportunities for business growth may be dependent on your networking contacts or website design. Every business owner should remain wary of all threats to business success. Planning for problems before they arise will make running a business easier and more successful in the long run. As you can see this aspect of business planning is critical to all of your vision, your mission statement, your goal setting and running your home business.

#6) Goal Setting.

Write your vision for your business. Be specific. You can revise this as your goals and mission changes. How do you envision your business a year from now then five years from now? Write out your goals and objectives. Break down each product or service into their own set of goals. Plan for expansion as your business evolves.

Goals are useless unless you can measure your progress towards them and plan to regularly assess which goals have been met or still need to be fulfilled. Make your goals specific and time sensitive. With each business goal, itemize what needs to be in place to reach each of your goals. Outline what steps you will take to reach the goals for your home business. Mark your calendar when its time to re-evaluate your goals and re-align your vision for your business to match the direction your business is going.

Celebrate when you reach your goals and regroup when you realize you missed the mark. It's important to decide what you consider to be a major loss and what you will accept as unsuccessful. Knowing what you will accept and absorb as a business loss before it happens will help prepare you for when it actually happens.

#7) Target Market.

Research your desired target market. Identify who you expect to buy your products or services. Write a profile of your average customer. You need to know your target before you are able to aim. Study your potential customer's behavior. Where do they shop? What do they read? Do they move in specific social circles? Who wants or needs your business? Who will benefit from your product? What type of people will find your business a necessity?

You cannot expect to fill a need or desire of a customer if you do not know what makes your offer unique and necessary. Look at those that offer similar products with success. Write out how you can rise above and differentiate yourself from the competition. At this stage of your business plan, describe how you can stand out from the crowd. Write down how and why your company is better than the competition. Study the competitions latest marketing strategies then outline here how you plan to counteract their business moves to give you the edge you need to stay unique and effective.

While studying your customers and competition, take the extra time to identify complementary products or services that may fit your current business plan that may give the edge you need to compete in the future.

#8) Sales and Marketing Strategies.

How will anyone know your business exists? What steps will you take to make your business known? How will your customers find you? What can you do to ensure that you attract the customers you seek? How will you track your efforts? How much money do you have to put these strategies in place?

List your strategies - press release, printed catalogs, business cards, open house, craft fairs, business, conventions, virtual expos, sales letters, etc.

Determine whether you will market exclusively online, locally to your warm market or a combination of both. If online marketing is part of your business plan then include an internet marketing plan to include your domain name and host, whether you will hire a professional website designer or do it yourself, your business logo and e-commerce set up.

#9) Business Start Up.

Determine what equipment and services you will need to run your business to include setting up your home office, equipment, supplies, product inventory, customer record keeping, and book keeping. Create a checklist of professionals you need to secure for legal and financial advice, advertising expertise, office assistance or tax expertise.

Starting a home business can be exciting and scary because it is Your dream that you are working towards with each work day. To write a business plan, means a great deal of commitment to the process. The process of writing a business plan will bring you closer to understanding yourself, your business goals, your company identity and reaching your potential customers.

Although these areas are critical to writing a business plan, there is much more that will be added to your plan over time. Each time you reach a goal or discover a barrier to making the sale ~ you will return to your business plan and revise your goals, strategies and techniques.

Business success is in the plan and implementation but also in the ability to adjust and redefine your business goals to meet your customers need or desire while letting you design your home business your way!

Tam Carson is owner of Article Marketing Profits blog helping other online marketers and home business owners that want to learn how to promote your business on the internet. Stop by and sign up for feed updates at Article Marketing Profits today to learn how to boost your income with article marketing!

Should You Write Your Own Business Plan?

If you are just starting a company and looking for funding, or looking for additional funding for growth, you will need to develop a traditional business plan. Creating a business plan is a business hurdle that entrepreneurs seem to dread. Do you do it yourself? Do you hire someone to do it? How do you get it done quickly, but without spending too much money on it? Will what you do yourself be adequate to get funding?

In this article I will discuss the pros and cons of do-it-yourself business planning versus having a business planning consultant do it for you or with you.

The Do It Yourself Business Plan

Particularly if you are seeking capital of less than $200,000, consider creating the plan yourself after taking a class or reading some books or getting some coaching for someone who has written successful business plans.

Consider taking a three-hour business planning class through SCORE or the local Small Business Development Center. Even if you decide afterwards not to write your own plan, you will have a much better idea of what you want out of the process and what to expect.

There are some good reasons for an entrepreneur to do the business plan:

First of all, because you can. If you've read sample business plans and find their accounting jargon intimidating, you are not alone. But as long as you can clearly get your message across and have other people such as you accountant look at the plan before it goes to lenders or others, you can do this work yourself.




It is in learning the business planning process that you develop analytical thinking skills necessary to run your business with an intimate understanding of your own business model. Going through the planning process is an invaluable business experience.




You need to know the plan inside and out and really understand the variables involved. You are the one who will be asked the tough questions by potential investors or lenders, such as "What will you do if only half your expected revenue comes in?" or "What will you do if you find out that direct mail is not working for you as your primary marketing tool?"

Outsourcing the Business Plan Process

Entrepreneurs are fire fighters. One of the most important jobs of an entrepreneur is to manage time, and do those things that you are best skilled to do. Many entrepreneurs decide to hire someone else to do their business plans, often because they have an urgent need for the funding and can't afford the learning curve to be able to develop a high-quality plan that will meet the needs of lenders or investors.

In addition, if your funding requirements are more than $500,000 my recommendation is to get some professional help with this project, even if you do some of it yourself.

Some reasons to consider hiring a consultant:

It will get done! Business planning is done much faster with someone who knows the process. Every entrepreneur has good intentions about getting plans completed, but months later they still haven't done all the work. Planning should be high priority work, but it is hard to get to when customer calls and employee problems require immediate attention. The sooner the plan is completed, the sooner funding can be attained. And the price of hiring the consultant will be small in comparison with the increases in growth and profitability of the business.




It will get done in a way financial professionals will respect. Business planning is done better by someone who knows how finance people look at plans and what they will and won't question. Once you've been through the business plan process many times, you know what it takes to get funding - what to emphasize and what to play down.




The consultant's objectivity will allow for non-emotionally-based projections and expectations for the business. A consultant will be much more objective in the process and question your assumptions, making it less likely that the business will have problems after the funding comes in.

No matter what, don't let a business planning consultant talk you into putting any information into your plan that you aren't comfortable with. If it doesn't look right to you, it probably isn't. It is your business, and you will be stuck with the plan long after you've paid the consultant's bill. Make sure it is the plan that you want, one that matches your goals and objectives, and captures the way you look at business and the spirit of your company.

If you do decide to hire a business planning consultant, here are some of the important questions to ask to make sure you get the greatest value from your investment:

How many business plans have you written for my type of business? How many of them were funded?




How much time will you need of mine during the planning process?




When will the plan be completed, and how many drafts should I expect to see and have the opportunity to comment on?




Will you be writing the plan yourself or do you have associates who do the work with you?




Will there be an opportunity for you to present the plan or for me to present the plan to my other advisors before the final draft is done?




How do you work in collaboration with my partners and advisors so their input is taken into consideration during the writing of the plan?




Do you do the market research and the financial spreadsheets, or are those things done separately (and charged for separately)?




Does your price include revisions or customization for certain types of funding (to include different information needed by investors versus lenders)?




Does your price include coaching to prepare me to talk with lenders or make financing presentations?




Will I have an electronic version as well as a hard copy version of the final plan (so I can make changes later if I need to)?

The Optimum Solution: A Blended Approach

At best, the planning process should not be at either end of the spectrum, but squarely in the middle. In my experience, plans that win funding come from a true collaboration between a skilled consultant/facilitator and the entrepreneur's team of employees and advisors.

A business planning consultant can act as a coach, first assessing the job to be done, and then recommending who is best to do it. The business plan should be a compilation of work between the vision and goals of the entrepreneur, the technical understanding and expertise of his or her accountant and other professionals, a consensus of employees or others, and the research and writing abilities of the business planning consultant. The consultant should meet with all parties involved, talk about what is needed for the plan, and use all the resources available to get the work done as quickly and cost effectively as possible. It is the consultant's responsibility in the process to take all the pieces and make the final plan into a readable, accessible document that will stand up to investor/lender scrutiny.

My final caveats:

Don't pay more than a few thousand dollars for a plan unless you are looking for capital of well over $1 million. I have heard more than a few horror stories by people who have hired university professors assuming they are the experts (they aren't) and paying tens of thousand of dollars for a poorly written or incomplete plan. Ask your banker for business planning consultant recommendations, or better yet, talk with someone who had a good experience having a business plan written for them. It is reasonable for a consultant to expect you to pay half of the fee up front and the other half at the completion of the plan. And you can't hold the consultant responsible if you don't get funding based on the plan - too much is based on your own credit and management skills.




Don't expect to get a finished plan that is a roadmap of everything you need to do to have a successful business. That isn't the purpose of the business planning process. A traditional business plan is intended only to document your strategies for the business very briefly - but well enough to get funding. If you are hoping for something that will tell you how to market or how many people you need to hire, you will have to start with a deep strategic planning process, and probably buy lots of consulting time to get you going.




Don't expect a great a business plan from a poor business model. If your costs are too high to make your business profitable, the business planning process will help you discover that. Then it will be up to you to make the hard decisions about changing your costs structure to make the business work. The business planning consultant is a skilled professional, not a miracle worker. A good business plan can help you highlight your strengths and minimize your weaknesses, but it cannot make an unworkable business model into a thriving business.

And one final thought: Don't go on to start a business or make changes in your current business if everything in the business planning process tells you it won't work. Things don't get better out in the real world if they don't work on paper. Deal with the weaknesses - get more training, consider product redevelopment, or have a home-based business to reduce costs until you can sustain the rent for an office. Businesses fail finally because they've run out of money. If your plan tells you that you can't make enough money to make the business work for the long run, pay attention to that reality.

About The Author

Jan B. King is the former President & CEO of Merritt Publishing, a top 50 woman-owned and run business in Los Angeles and the author of Business Plans to Game Plans: A Practical System for Turning Strategies into Action (John Wiley & Sons, 2004). She has helped hundreds of businesses with her book and her ebooks, The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself Game Plan Workbook. See www.janbking.com for more information.

jan@janbking.com