Basics of a Business Plan - Continued

Last night we introduced some of the basic components of a general business plan. To recap, in order for you to be able to grow and develop your business, it is best to develop a basic business plan. This business plan will become your road map towards your success. The key components we have covered so far are your goals and objectives for the new business, market opportunity, and products. Your business plan will ultimately outline your goals and expectations for your home based business. Tonight, as promised we are going to briefly cover the remaining aspects of a business plan.

Marketing your new home based business is critical. You may decide to go into a business venture, but if you don't tell anybody about it, who would know to come to you to purchase your product or service? In several prior blogs, we covered different types of marketing of your business. What you want to do in your business plan is to note which ones you believe will work best for the business opportunity you have chosen to get involved with. You cannot make money if you do not have some form of a marketing plan sketched out. Our initial marketing plan was to go to as many motorcycle rallies as possible (preferably one every weekend), set up a booth and let people see that we were in business and demonstrate our Waterless Technology products for them. If they showed an interest in the business opportunity, we would exchange contact information and follow up after the show. If they were just interested in the product, we made sure to have enough product on hand at each event to sell to people. We also made sure that every piece of literature and bottle of product that went out had our contact information on it. This way, when the customers wanted to purchase more product, all they had to do was to look at the bottle, find our contact information and call us to reorder.

This is a simple and relatively low-cost marketing plan, but has been very effective. We have since expanded our marketing plan, but our initial plan was just to go out and do as many shows as possible, with as much face time with the customer as possible.

Another item you need to include in your business plan is where are you going to conduct your business? We are assume a home based business is out of the home, OK, where in your home are you going to create that home office? This is a legitimate question, especially if your home does not have a lot of extra space. You need to dedicate a specific area for your business. You may ultimately want to start in a room out of your home, but want to grow into an office outside of the home. If that is a goal, be sure to include it in your plan. This provides you something to work for and measure your success against. Like the other items you record in your business plan, be specific. What equipment are you going to need to conduct your business? Do you need a computer? Is the computer you may have going to work for you? What types of office supplies are you going to need? Are you going to need an area to store product? If so, how large an area are you able to dedicate to product?

Then, as you are working on those questions, the finance question comes up. How much product do you plan on keeping physically in your home office? How much product do you need to get your business started? You need to identify the initial financial start up costs for your business. You may be surprised how much it costs even to get a basic office set up in your home. Write down in your business plan how much you expect to spend to get started in your business. Be sure to include any start-up fees for the business opportunity, any initial inventory costs, any additional office equipment you may need (new computer, desk, etc.), are there any additional Internet costs that will be incurred, do you need a dedicated phone line? Several of these questions may not be necessary, but it pays to look at all aspects, so when you do start moving forward on your business opportunity, you are aware of the expected cash outlay. It is always best to anticipate the first expenditures in the business.

Then the logical transition from how much it will cost to start your business is, "when will I start making money to recover these costs?" This is the beginning of your budget. You have estimated your cash outlay, now you need to realistically estimate when you expect to see cash coming back in from your sales. If you are starting up in a new business opportunity, do not believe someone who tells you that you will make several thousand dollars the first month you are in business. It may happen, but it does not necessarily happen that often. Again, do your research. You already found out who is in the market, find out how long it took them to earn a significant income. Also find out how much time they dedicated to this business opportunity in order to make that significant income. That question can be your make-or -break decision. Realistically, when you start up a new home based business, it will consume a fairly large portion of your time. It is better to assume the worse, than to assume that you can put in an hour a day and make thousands in the month. That may occur down the road, but is highly unlikely in the first few months you are in business.

Build your income budget over a 12 month period so you have a virtual measuring stick. Be realistic in your income budget, but still, build it the way you would like to see your income grow. Then, once you have your income down, be sure to also track how many hours of work will be initially required to get to that income level. Some of those hours may not be realistic for your personal lifestyle. See if you can adjust to suit your needs. If you cannot get the income and the hours to work well for you, then perhaps this may not be the right opportunity for you. It is good to discover that now, instead of paying out all that money to get started and then discover that you do not have the time to dedicate to the business opportunity to earn the income you want.

After you have finished your budgeting process for a 12 month period, you have finished the basic business plan. Put it down for a day or so, and then re-read it. You may find that there are things that you wish to change or modify. Once you get the basic plan in a form and content that you are pleased with, have a friend or two review it for reasonableness. Keep an open mind when they provide input, you may not like their answers, but remember, you asked for their opinion. You may not choose to take their opinion, but, at least you now have been introduced to another point of view.

Lastly, once you are satisfied with your business plan, keep it out in a conspicuous place so you can reference it daily. Keep the budget posted on a wall so you can keep track of your success against your budgeted projections. Then, as days, weeks and months go by, you are measuring and reviewing your business and hopefully adjusting as you go. By the end of a 12 month period, you should have a very successful business on your hands.

If you are interested in starting a home based business, we may have some business opportunities that will meet your needs. Go to http://www.hawgwash.net/ to see what business opportunities we currently offer. If you have questions, please feel free to contact us at hawgwash1@yahoo.com. What we have on our website, may trigger some other ideas or desires for you, even if you don't see the specific opportunity on our site, we may be able to point you in the direction you wish to go. Please do not hesitate to contact us with your questions.

Until tomorrow...