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What Do You Need to Launch a Home Based Business?

With a wide variety of home business opportunities available – both to those who are looking into taking on a second job in order to bring in a little bit of an extra income and to those who are ready to branch off on their own and to go into business for themselves – it is extremely important for those who are planning to launch a home based business to know that they are getting into.

Now that’s not to say that launching a home based business is a bad idea; in fact, when done correctly, launching a home based business leads to tremendous success. However, when you are getting ready to take advantage of the home business ideas and opportunities that you have been exploring, you are going to want to be sure that you’re going about it the right way.

The first thing that you need, therefore, when you are going to be launching a home based business is an idea. Whether your plan is to launch a home based business that involved distributing items that you have purchased at a wholesale price or you are thinking about launching a business as a virtual assistant and intend to offer services as the foundation of your business, without an idea it is going to be difficult to get up and running.

The most difficult part, for many, who are planning to launch a home based business is taking the idea that they have and moving forward with it. On one hand, the challenge is fear: there are a number of people who want to launch a home based business but find that they are nervous about getting started and that they have concerns about a lot of the “what ifs” of moving forward and allow those concerns to stop them in their tracks. On the other, the challenge comes from a lack of planning.

Therefore, one of the most essential things to do for anyone who is planning to launch a home base business is to create a business plan. If you have the funding that you need to launch your home based business, you will find that it’s possible to create a more informal business plan that identifies your goals and your strategy for reaching them. You are going to want to be sure that you’re looking at the money you invest and how you will earn it back. You’re going to want to consider the amount of time that you have to commit to your home based business and to identify how you will use that time well – which hours you will work, what you will be doing each day and how you will market your business.

On the other hand, if you are launching a home based business that will require funding, you are going to find that it’s important to develop a more thorough business plan. You will find the resources that you need to develop a solid business plan – a plan that creates a clear statement of what you will be doing, the experience that you have that will enable you to be successful and your projections for the future – available at your local small business association.

Your local small business association will be able to assist you in launching a home based business in a number of other ways as well. First, when you consult with your local small business association you will find that it’s possible to find a mentor, someone who can help you to streamline the process of launching your business and who can help you to avoid making mistakes that many people make when they are acting on home business opportunities.

Similarly, when you are working with a mentor from your local small business association while launching your home based business you will be able to learn more about permits that may be required in your area – both zoning permits for your home that will enable you to operate a business as well as sellers’ permits that allow you to sell physical goods and to pay the state sales taxes on those items – and about whether or not you will need a business license, a tax identification number and about filing a DBA if you will be doing business under a name aside from your own.

In other words, when you are launching a home based business, you will find that it is essential to know which home business opportunities to act on and to develop an understanding of what it takes to get into business. Having a mentor will enable you to learn more about the process of launching – and growing – a home based business and, as a result, can help to ensure the success of your new business. When you start with a great home business idea and then get the guidance that you need to develop your business, you will find that you are well on your way to reaching your goals.

Make a Plan to Succeed in Business

The most important reason to write a business plan is probably to save your house, or grandma’s nest egg, or whatever investment you are putting at risk. A business plan will help you learn more about your business and serve as a tool for communicating with others, such as bankers or investors.

Here are seven things to know about business plans:

  1. Most businesses are started without written plans. For the most part, plans only exist on a napkin or in the owner’s mind. Business planning is an unfamiliar trek for most people, and too often the task is avoided until they are urgently needed to get a loan.
  2. By the time a business plan is printed, it is probably already out of date. Enterprises continually adapt to their surroundings and the plan is a living document that gets updated at strategic times.
  3. Business planning is an organic, non-linear process. At any given time, you will be more knowledgeable in some areas than others. Effective business plans arise from building on strengths, developing strategies to mitigate weaknesses, and innovating as you learn more about your business.
  4. The further a business plan projects into the future, the less reliable those projections will be. It’s entirely likely that year five predictions will be less accurate than year one.
  5. A professionally prepared plan does not guarantee a business will succeed. A picture-perfect business plan is not worth the paper it’s written on unless the owner understands it thoroughly. The real value of a business plan is the knowledge you gain by doing it.
  6. Plans that call for aggressive early stage spending will meet with resistance, especially where the shopping spree is predicated on using borrowed money. It’s usually healthier for a new business owner to solve problems through innovation, ingenuity and frugal investment of available resources.
  7. While a business plan will help to increase your knowledge about your business, it will not do much toward helping you develop business trade skills, such as how to handle money, how to buy, sell and pay. Business trade skills are more likely to be learned from managing a paper route or operating a lemonade stand. Owning a business is the best way to learn the basic survival skills like knowing how to read the market, how to learn from it and how to change your mind.

Your business plan is more for you than it is for your banker. It will enable you to prove your business case, and to be reasonably sure that your venture can survive.

Once you’ve debunked your own assumptions and gathered enough evidence to demonstrate viability, you’ll have more confidence in your business idea. Armed with a better understanding of your business and realistic financial projections, you will be much better positioned to discuss your business with those who might help you.

Business Planning – Fail to Plan – Plan to Fail

All businesses start with brilliant ideas. Most of these brilliant ideas sound great, too, and you may be excited to take the plunge into entrepreneurship.

Hold on- you need a business plan.

“Another report? More paperwork?” Yes, indeed, and the need for a business plan is well worth the time and effort it takes to write up.

But a business plan isn’t just another report. A business plan is your ideas, vision and goals on paper. It’s where you want to be and how you are going to get there. A business plan shows who your competition is, what obstacles you might face, and how you plan to overcome them.

A business plan shows that you’re serious about your ideas and have a clear path from A to Z. It shows that your ideas are viable ones for a business that earns money. It also helps you determine whether it’s worth putting energy into your ideas or making investments in your visions.

Sometimes, people have great ideas but when they start to write them down, they see that the long-term predictions aren’t that attractive. They may uncover points they never considered or reveal a major stumbling block that will take thought and careful planning to overcome. They may discover new opportunities or a simpler way of earning money.

There are other reasons for writing a business plan, too. Banks and investors want to know what your business is all about before they will offer loans, grants or funding. You may need to take a loan to buy equipment for your business startup, but if a bank can’t see that you have the potential to pay back the money, chances are they won’t lend it to you in the first place. A good business plan shows a bank that their risk involved in lending you money is very low.

You can use your business plan to, as a way to concentrate on what you need to do to reach your goals. It’s very easy to forget important steps when you’re new in business or stray from the path of your main objectives. Another good idea is to remove the financial information from a business plan to leave a guide for employees that helps them to know what your business is all about and to maintain focus as they work.

A business plan is generally about ten pages long. These ten pages cover topics such as:

Your business description

The operations of your business

The marketplace and competition

Sales, marketing and promotion

Financial information

The first half of your business plan is all about your business in the physical aspect. What does your business do? What is its past, its present and its future? Who are the major competitors? Where do you predict your business to be in five years? How will you get there?

Sales and marketing is an important part of your business plan. What is the price of your product or service? What is the cost of goods sold? How will you promote your business and increase your client base? How will you make sure that customers buy from you and don’t go shopping from the competition?

This is important. It isn’t good enough in business to know where you are now and how you’ll make money now. You have to be a little bit of a visionary and try to see down the road. With a clear plan of where you’d like your business to be and what you need to do to reach that point, you have a better chance of success – and attracting investors!

The second half of your business plan is all about the number crunching. This is where you’ll need to put in facts and figures, where you’ll need to lay out your financial information, your current situation and the health of your business, as well as your predictions for its future health.

It’s very important that your numbers show solid backup to all the information you’ve provided in the first half of your business plan. Do the numbers reflect the business you’ve described?

There are plenty of free online tools to help you build a solid, well-constructed business plan. It’s vital that you take the time to write up your business plan, too- don’t wait. You never know when you may need to produce this written document, and if you don’t have it handy, you may end up missing out on opportunities.