Does My Home Business Really Need a Business Plan?
A business plan is a formal document. It lays out the business idea using a series of structured sections in an attempt to allay any fears that all aspects were not covered. Typically a business plan will include the following;
- a statement of how the business will be structured or the ownership
- business financing
- marketing methods
- projected income and expense statements
- projected cash flow statements
- growth predictions
Inc.com has a great series of guides on how to write a business plan. Check them out here.
Now, if your business idea is to become a cake decorator or to run a daycare from your home, this might be a bit more than you need.
Traditional thinkers argue that going through the motions of preparing a business plan is beneficial because it ensures that the home business owner hits all the right areas. This kind of logic is hard to dispute but the time and effort of completing a formal business plan may not be warranted in certain situations.
However there are some instances when a business plan is not optional;
- when you are looking for a business partner
- when you need outside financing
- when you are going to be incorporated
Of course, this is not to say that home businesses do not require planning. You must have a strategy for how you will start up and operate your business to be successful, but you may not need to put this plan down in a formal document if your situation falls outside of the above mentioned conditions.
What has been your experience? I’d love to hear from home business owners who fall on both sides of the fence here, so please leave me a comment!