Drafting A Business Plan for Home Based Business
If you intend making an application for finance to start your home business, you may be required to draft a suitable business plan. It is a good idea to draft a business plan even if you do not require a formal one, and use it for internal purposes and to remind you of your plan in future.
Why Do You Need A Business Plan?
• If it is your intention to seek external funding, you will need to provide the investor or financial institution with a business plan.
• Having a business plan allows you to remain on track and stay focused. You will have a tangible plan that you can refer back to on a regular basis.
• It will give you the final analysis of your potential home business which will allow you to see if it is feasible or not.
• It can help you recruit individuals or corporations to help you get your business off the ground.
This plan is similar to a ‘how to’ instruction book. It is a guide to successfully creating a business that will make a profit and provide you with sustainable income. From a more formal perspective, it is an analysis of your operational, marketing and financial plan.
Drafting a Business Plan
An informal plan which is for your personal use should include the usual business plan sections, such as:
• An overview of the industry you wish to enter
• A profile of your target market
• An analysis of your competitors in the industry
• A full description of your company, including its goals and main product
• A SWOT (strengths, weaknesses, opportunities and threats) analysis
• A marketing plan
• An organization plan
• Financial statements
If you need to draft a formal business plan, you should include all the above, along with a summary which will include a summation of all the points already covered. Make adequate use of this summary to promote your business and make it impossible for an investor or financial institution to reject your application for finance. Make sure that you bring out the passion that you feel for your home business. You must add a company description introducing your specific business and explaining its main product and its goals.
You may also be required to enhance the financial statements section as this is what funders will be most interested in. They will not provide you with funding if they cannot see an adequate return on their investment.
Add a market analysis section to your formal plan. This should indicate the industry you are entering, the target market and details about your competitors in the market.
You can choose to outsource the drafting of a business plan, or you can write it yourself if you feel confident enough. Doing it yourself will give you the insight into the document that is required when you approach an institution for funding. Once you have done a first draft, you should opt for a professional final copy, particularly if you are seeking funding. This may be to your benefit and it will ensure that there are sufficient details in the document which will increase the chances of you obtaining suitable funding.