Tuesday, May 12, 2015


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.