Home Based Business
1. A business plan is a marketing action.
A well-thought-out and presented business plan demonstrates to yourself and others that you are serious about your business idea, you have the passion and persistence to develop the strategies and tactics so your business idea will be successful, and you have converted a general idea into a realistic and believable business.
2. Know your audience, and write the plan in a style and with information they need for the action(s) you want them to take.
To achieve the decisions and actions you wish taken, you must provide your readers with the information in a style they are familiar with and can understand. Maybe this is your banker, angel investor, biggest client, prospective employee or board member, or just yourself. Make it easy for readers to take positive actions—make your case in their language.
3. Business planning should focus on the customer, not on the entrepreneur.
For- profit businesses and nonprofits alike are established to fulfill a customer/client/society need. The better the need is served or problem solved, the more successful the entity can be. Therefore, focus on satisfying the customer/client need and demonstrating how you are doing it uniquely from the competition.
4. A small business is usually a bet on the entrepreneur, so provide a biography that demonstrates you have the technical and leadership experience to drive your idea to success.
Either demonstrate you have the experience or you have surrounded yourself with others who have it. Financiers, a personal friend, a stern banker, or a demanding angel know they are investing in you as the owner. You are contributing most of the “assets”—your time, talents, and passion for birthing this business idea into the marketplace. Your biography, therefore, should not be just a LinkedIn-type listing of your education and previous positions. Instead, make the case for why you are the right person at the right time to own and operate this business.
5. The executive summary is the most important plan section. It delivers the message and sets the tone. It should be enthusiastic, concise, professional, and no more than two pages long.
Just as in the first few paragraphs of any book, many people will not read past the opening section if they lose interest. In these first two pages, you need to convince the reader that this business idea will be successful by describing what customer needs are being fulfilled, how this business idea sets itself apart from all the other competing investment alternatives in the marketplace, and the financial and other rewards to be obtained. Focus on writing this compelling short story in two pages or less. As a summary, it should be written last; this ensures it represents the full plan.
6. Have sales goals that are supported by research and an actionable marketing plan. This is your first and most important sales job.
Where and how are you going to capture revenue? Describe your sales goals, make a convincing argument, and provide tangible support—names of first prospects, sales pitch, competitive analysis, market awareness, and so on. If the argument and support is not convincing, then the banker, angel investor, vendor, or customer will arbitrarily give the sales goals a “haircut,” which will result in a decrease in cash flow (and maybe doom their investment participation)—and you will not be in the room to defend your analysis.
7. Request funding in the amount you truly need, and support your request with financial statements.
A funding request supported by financial statements (cash generation and expenditures) demonstrates you have thoroughly thought out the business and you consider the financial aspects important. This provides some assurance that you will look out for the best interests of those providing funding.
8. Use of funding proceeds should be primarily for investments, purchases, and marketing activities that will generate the products, services, and sales.
Investors assume you will contribute “sweat equity.” While some of the funding may be needed for critical staff salaries, the majority should be used for activities that will generate sales. A growing sales pattern with positive net margins means you will have the cash flow to pay back loans and eventually have a sellable business. Examples of typical funding requests are for protectable/proprietary software development, product production equipment, and marketing programs with a direct or channel partner sales focus.
9. Surround yourself with advisors and mentors, and talk through your business ideas with them.
Starting and growing a business is difficult, and more than half of all startups fail in their first five years. No one person can have all the knowledge, experience, or even perspective to handle every business situation. Gain from the skills and experiences of others. Ask for advice from similar companies in different geographic markets or noncompeting suppliers in your same market segment. Talk with experts in areas such as marketing, sales, finance, and operations. Join industry groups or entrepreneur mastermind teams. Express your questions and roadblocks, and then listen openly. You will feel less isolated and confused, and investors will feel confident they have a complete team of resources to grow the business. Often, family and friends are not able to provide the kind of feedback and advice you need. Some people find it difficult or do not know how to ask for help; just try it, and you will be pleasantly surprised how willing others are to assist.
10. A business plan is never perfect and never finished, so do not procrastinate writing it or obsess about creating the ideal plan.
At some point, you need to stop writing and start satisfying a customer need and making money. Set a personal deadline, stop planning, and get to work.
'11. It is all about the money.
Every decision and action you take will have a financial impact—be it cash flow or profit.
While many entrepreneurs have multiple bottom lines (lifestyle, mission, causes they believe in, and so on), if you do not have sufficient financial resources, you will not be able to accomplish your mission and goals, or even stay in business. Sometimes this singular fact helps cut through the fog of what to focus on next.
12. Focus, Focus, Focus.
You will triple the value of your plan and dramatically improve your credibility with a potential funder if you can answer these three questions clearly and thoroughly both in your text and financials.
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