Is a business plan important for your business?
… Is a concrete slab or crawlspace foundation important before constructing a home?
Make Sure Your Business is built on a Strong Foundation
You have a great business idea. It only takes a table chair, a basic computer and a telephone to start. No sweat! Off you go, right? … You’ve had a home-based business for a year as a coach. That requires very little to start off. However, you start accepting invitations to speak to groups and you’re getting paid. You’ve also written a book or two relating to your coaching and orders are coming in. YOU NEED HELP! Suddenly, you’re doing more administrative duties than you’re spending time coaching; yet, more clients are calling due to referrals.
Do you have what it takes to accommodate the demands of your growing business? Ask yourself some important questions:
- Is your business planted on a solid foundation?
- Are you prepared for a growth spurt when orders start coming in faster than you can keep up?
- What about when the economy has a downturn and your business experiences a slowdown in sales to the point of you having to begin laying off staff?
- Do you have the proper legal structure for your business… what about an attorney and CPA who works with you?
- What if you want to grow into a larger office space, or just get out of your home office?
- Do you have the funds or paperwork to back up getting a loan?
- If you can’t answer the above questions with conviction and clarity and that all of the above are in order, then we need to talk!
Business planning sometimes gets overlooked or confused as a part of the promotional mix and considered a part of the marketing piece of the big picture. The business plan is not the marketing plan and if you have a marketing plan, a media calendar, or any other kind of plan relative to your business, but doesn’t involve projections, financials, market competition analysis, or an executive summary, you haven’t done a business plan.
When you don’t have your bases covered before going into business for yourself; how will it affect your family? What will happen if you need to spend money to hire help or rent space to store the items you now sell? Do you have 6 to 9 months’ worth of savings? Do you have an emergency fund put aside for things needed as your business grows? What about if you or your spouse become disabled to the point you can’t work for 6 months? Finally, what may seem an unimportant issue may in fact be one of the most important questions: How does your family feel about you going into your own business – quitting the corporate world?
Too many people start their businesses without thinking about any of these issues. If they have a computer, a dining table, and phone, business is ready to open. Erase that thought.
- Talk to your family. How will it affect everyone?
- If your partner doesn’t work outside the home, do you need for him or her to get a job to supplement your new business income? It will be slow coming the first few months as people pay their bills in different ways; some the day the bill comes in, some 3 months later. If you have small children, how will it affect your children and your ability to work if they are small and need a lot of attention?
- Discuss your plans with a business attorney; what kind of structure will your business be set up?
- Retain a CPA specializing in small businesses and tax law. A great thing to have is a Neat® receipt scanner.
- Look at other similar businesses – how do they market themselves?
- Have you made a list of all expenses? Do you know what they might be?
- What about professional trade associations you might need to join?
- Is there a certification or special state license you need to have?
- If you are a coach, don’t assume you shouldn’t have a business license in the city where you live.
- Are you a motivated, self-starter, with resilience and tenacity, organized enough to keep work flow in order and the stomach to handle months when times are lean?
- Can you make a contract with yourself that you will not stay in your sweats or PJ’s all day, day in and day out, even if you don’t have to meet clients? (It’s a comfortable way to work, but can be addictive at times. You don’t want to stop going out to meet and greet people each day; after all, it is your business, not a hobby!
These are all important questions that need answers. I understand that some people who start their business from home may not agree with many of the things I’ve written here. But, believe me, if you take the extra time before you begin a business by doing the above, or as many things that apply to you, you will have a greater chance of having a successful and less stressful business start.
“There are some people who live in a dream world, and there are some who face reality; and then there are those who turn one into the other.”
Douglas H. Everett