Home Based Businesses: Create a Colorful Business Plan! Part I

• Home based businesses need business plans;
• A business plan does not have to be a boring, complicated document;
• You can create one to fit your business and your personality style.

Then you know everyone has a different personality or learning style. We gather and use information in different ways. Although there are several terms in circulation for the different styles, there are predominantly four, with combinations thereof, and I simply use colors to describe them because it is easy and fun. They apply to personal and business life!

For example, are you more:

• Straight-forward, wanting bottom line answers, don't bore me with details?
• Conversational, if it isn't fun, don't do it, always wanting to be around others?
• Knowledgeable, creative, thinking things through, re-doing them?
• Reserved, needing verification, details before making a decision?

A business plan will help you decide the hours, the goals, the method of operation, the results you’ve achieved so far and what you want to achieve. Your personality style will contribute to the home based business you choose, and to the manner in which you run it.

But to a Business Plan? Yes! First of all, no matter what business you are in, you need to determine a couple of things:

Answering these questions will practically write the business plan for you! Believe it or not, answering these questions can be the "hard part" of your business plan! Make it more fun: Decide (a very direct, red thing to do) to be a little creative (blue), write down your thoughts (detail oriented greens do this naturally), and even involve a friend or two for ideas (how very social, or yellow of you!) Now, this is the best use of "Takes all kinds"!

Assuming you answer "Yes" to making a profit, that immediately moves you from "hobby" to "business". Now, do you treat it like a business? Do you operate with a mental "open for business" sign... regular hours (even if they are "odd" by normal standards), a regular work place, a consistent method of operation, goals (especially in writing)? Bottom line: Consistency.

Which leads to understanding what it will take to run your business and make a profit. Consider what licenses the city requires, what it will cost to get started, keep the business running, expand, advertise, find (and keep) business, get/create the product or service, where you will be located, who will help you, and more. Who is your customer? Why should that person buy from you? What unique distinctive do you bring to the market place?

Suppose you are starting (running) a childcare service in your home. Yes, it’s a real business, but why a business plan? You have income and expenses, and you get to deduct part of your housing expenses for it! Some form of business plan will help you feel like you are in business, and create a more professional relationship with your clients (the parents). You aren’t going to show it to them, but having a business plan will help you run your business in a more professional manner, and that will show! It will allow you to know if you are making a profit, what your time is worth, whether you should invest in more equipment, raise your rates, hire a helper or just stay with status quo! If this is the type business you chose, chances are you are fond of children, creative and social. This is not always the case, of course, and I had a very direct (and not very caring) caregiver who created the final impetus I needed to launch my home based business over ten years ago!

What about the "entrepreneurial seizure" remark? Some people are excellent technically at a job/career, and everyone around them seems to be asking, "Why don’t you go into business for yourself?" Pretty soon the expert decides it’s time! Then after being in business awhile, doing what they have always done, discovers that the business is not fun- - in fact, it’s downright hard or discouraging - - and not going as well as expected. She was having an "entrepreneurial seizure" rather than really starting a business. Can it be solved? Sure! Learn what it takes to really be in business! Hire the people or out-source the work necessary to do what you can’t do, learn to do those things, or decide that this particular business may not be your best choice. Sometimes learning to do the things is the least attractive (fear of change) but the most effective way to create a profit in your business! Also, if you intend to be in business at a profit, you must be constantly learning and growing!

After you have addressed the questions above, and have written down the answers (never mind in what detail... what matters is understanding your notes later), you are ready to assess the future of your business, with a written business plan in mind. There are a number of forms it can take, which will be determined by the purpose of the plan, who will see it, and what your own personality and business is. Assuming this is your first attempt at a business plan, realize that Anything worth doing is worth doing badly .... at first! We all have to start somewhere. I’ll bet you weren’t born knowing how to tie your shoes.... but you learned to do it pretty well, didn’t you? Same with business plans.

The purpose: Do you want to provide the best childcare in your area for preschoolers so that you can be at home with your own children? Then that’s your business purpose or mission statement. (I know of one multi-million dollar company who’s purpose is - really- "To make as much money as possible - - so we can give it all away!")

You need to know what expenses to anticipate, when they will be due, what your cash flow will be, what it has been in the past (assuming you are already in business), what your market share is now (okay, guess!) and what the potential is (better to do research here!). Will you be local, national, or world wide (the Internet makes it possible for local businesses to be global now). What is your competition? How can you be better, or unique, or different? You may want to incorporate that information into your purpose statement. How much business do you need to do to turn a profit? How long will it take to reach that point? What steps will you take to get there? Then where can you grow?

If you are a direct, bottom line person, think in terms of headlines. Don’t worry about all that wordy copy you think you have to have. Just get the main ideas down, then fill in what is necessary later.