Often when I recommend to one of my clients that they create a business plan for their home business they ask, “Why?”
I understand the inquiry. I mean, why spend time putting together a document about my business? Why not just do what you need to do to build it? Right?
Now, typically I try not to answer a question with a question - that can be annoying for the person who asked me a question! However, sometimes I do, which is the case here.
I ask my clients, “Well, when you go on a road trip you bring a map with you, correct?”
The point being that a business plan is to a business what a map is to a road trip. When you travel you buy a map someone else created, but you get to create your own business plan.
Having a business plan for your business is important. Don’t just take my word for it though. Instead, ask yourself the following 7 questions. Your answers may uncover the benefits you will enjoy by having a business plan for your home business:
1. Are you confident that the home business you have chosen will work?
Understand that there are risks associated with starting any type of business. However, with some research and planning you can reduce and prepare for any possibly risks. So, if you outline each aspect of your business, you can determine if your idea is actually viable.
2. Do you know the who, what, where, when, and why of your day-to-day business operations, including the costs, and projected profitability? A business plan will help you answer all of these questions, enabling you to get your head around what you need to do.
3. Do you have realistic milestones for yourself? A business plan will help you realistically forecast where your business will be in six months, one year, and five years. Keep in mind that goals should be specific, measurable and realistic.
4. Do you know your market? In creating a solid business plan you will research, analyze, and write about your market. This will provide you with an overview for your business and also give you greater insight into your overall market.
5. What is your financial picture? The process of writing your business plan will force you to analyze your financial situation. You will determine how much money you need to start your business, build it, and run it. Again, preparation can often be a key ingredient to success.
6. How are you going to monitor your home business? A business plan serves as an ongoing business tool that you can use to monitor your progress. A good business plan is a working document - one that is accessible to you. A business plan that is tucked away in a filing cabinet serves no one.
7. Do you have contingency plans? A solid business plan includes some contingency plans. Your business plan can help you see how and where you can make changes relatively quickly if, and when, necessary.
Take the time to put a business plan in place. It’s your road map to success and your business and your pocket book will reap the benefits.
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