Looking at the outline
Why do you need a business plan? For a start, if you will be applying for a bank loan or involving investors, it's required. If you are striking out on your own, it isn't mandatory but it is an excellent way to ensure success. Most people run for the hills at the thought of making a business plan. I did promise it would be fun and it will be. First, let's deal with the scary part. A proper business plan must include the following:- A description of your business (name, business type, and address)
- The market for your business and how your business fits into this market
- An industry description including any government codes that identify your category of business
- Market research and competition
- Customer description
- Service description
- Product overview
- Place description (your place of business, website etc)
- Price description
- Sales forecast
- Customer service description
- Promotion and advertising
- Management and staffing
- Legal requirements and regulations
- Risk assessment plan
- Bookkeeping and accounting
- Operations and administration
- Summary and startup costs
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Number 1: Writing the description of your business
The first point to address is the description of your business. Most home businesses are a sole proprietorship so that will be the assumption here. Because the rules vary, I will periodically use my own case as an example but include direction for alternatives. Create a folder for your business plan and let's get started on the draft.
Title your first page Business Description.
Name your baby
Crawl before you walk. Naming your business can be as simple as using your own name. You can be creative with your domain name and on your website.
What is the name of your business?
Before you decide, explore the requirements in your region. Every area has different rules but in most, if you choose a name other than your own, you will need to register your business name with the state or provincial government. The costs vary, as do the permits required in your municipality. Your first step is to find out the rules in your area and the best way is by picking up the phone. You can ask questions and get answers that you may not find by doing a search online.
I live in Canada so if I name my company anything other than my own name, I will need to pay for a name search first. If it is available, I need to register the name and pay the associated fees to register my business. I will then receive a business number but more about that later.
Businesses online are a little different from their brick and mortar cousins. You can operate a business under your own name but purchase a domain name and develop a website with any name you want. If you are unsure, start with your own name. You can always register a business name later.
Our first paragraph in the business plan now reads:
[Your Name] is a sole proprietorship owned by [Your Name]. It is a home-based business that operates from [Your Address].
or if registered:
[Your Business Name] is a sole proprietorship owned by [Your Name]. It is a home-based business that operates from [Your Address].
You are now on the way! Starting to feel good?
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The next part describes the product you offer
After completing the first exercise in this series, you have a pretty good idea of what it is you offer. Now you need to do three things with it.- Say what it is and how it benefits consumers
- Say how it bridges to or complements another industry
- Say how it can add to your community.
Yes, I realize it's an online business but it will be much stronger if you can take it out for a walk once in a while. It adds to online credibility if there is a real-world presence in some respect, even if it is giving free talks at your local library. Be creative.
Sum it up in a few sentences.
E.g. [Your Company Name] has a unique perspective on the fishing industry and our methods can help cut costs for commercial fishermen up to 4o percent in the first two years. We plan to offer seminars, online video training courses, and develop a site for local fishermen to market their product more effectively through a cooperative. Planned community events are included in our initiative and will support the commercial fishing industry, sports fishing/tourism, and the local community. To establish better understanding and cooperation, we have consulted with commercial fishermen and sports fishermen and are developing a guide that will be available in both digital and print editions.
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Envision it. Be clear about your goal.
Look at your business from every angle. It may be larger than you think.
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Number 2: The market for your product
We know the product (whatever it may be) is not restricted to one community and can apply to similar communities/markets all over the globe but there is more research to be done before adding a market summary to this part of the plan.
You will put absolutely nothing in this section, at least, not yet. We will come back to this after we have completed all the other parts of the business plan.
NAICS: The difference between stalking, spying, and research is all in the application. Put on your Holmes hat and get ready to find out some pretty interesting stuff about your competition.
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Number 3: Industry desription
Title your second page Industry Description
Now you need to do a little research and find your industry code. This is the North American Industry Classification System (NAICS) code and is the same in the United States, Canada, and Mexico. There is absolutely no difference but you may be more comfortable searching one website over another. You can find them here:United States: NAICS 2012
Canada: NIACS 2012
You can also find Mexico and European Union codes on the Canadian site.
Access statistics and find the number of businesses in your area with the same code and find the income levels for comparable businesses. In other words, look in your competitors' books.
A goldmine of United States information can be found on Business Data and Statistics.
In Canada, find lots of information on Small Business Profiles.
It's amazing what you can find out about your future competition in here. Set aside some time to explore because it is really a learning experience. Bookmark pages and take notes for later. We will amend this section as we learn more.
If the thought of doing this kind of research makes watching paint dry seem exciting by comparison, think of it like doing detective work or being an industrial spy. You will be very surprised at the things you find out and it all works in your favor.
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Put it into words
Here is the opening paragraph from my own plan:
"According to Industry Canada, The SilverGenes Group is classified as Graphic Design Services, NAICS 541430. Industry Canada?s most recent figures are from 2008. There were seven unincorporated graphics design businesses in Manitoba with sales ranging from $30,000 to $5,000,000."
Be accurate and concise.
You have good information now from your search through small business statistics in your area. Has there been growth shown in your industry? Write a sentence stating exactly what it is: e.g. [Your industry] has been growing rapidly and exceeded a billion dollars in North America in 2006.
Note any emerging complementary industries and how your business will fit.
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Your slice of Internet pie
Grabbing the market for ourselves is our first instinct but may not be the smartest approach.
Your piece of business pie gets larger with collaboration.
Is there potential for collaboration?
If you don't see it at first, think about it. The biggest mistake people make is assuming there is only one pie and the person who gets there first, wins. On the Internet, this couldn't be more wrong. Success on the Internet expands almost exponentially with collaboration.
"[Industry A, Industry B, and Industry C] have been showing rapid growth in the last two years. We are in an excellent position to provide complementary services and products for customers from all these dynamic industries."
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How is your inventory set up and how is your product delivered in your industry?
Perhaps you will be shipping books, DVDs, or some other product. Maybe you are staying strictly digital or will be selling services. Whatever it is, describe it briefly along with how your inventory will work.
E.g. "Because our product is digital, we will never run out of inventory or be overstocked. Customers can shop any time of day or night, any day of the week, and have product delivered within seconds. All payments go through a gateway company, PayPal, so customers can shop with confidence."
Social media is critical for online businesses
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Social Media
Yes, we will be using this to market our product so write it down here. It doesn't have to be anything other than something like this:
"The Internet is a new market area. Although markets may seem established, it is less than 20 years old and major search engines like Google are constantly working to improve the experience. We stay on top of trends and belong to Social media like Facebook, Twitter, Pinterest and Google+. Because networking is becoming easier, maintaining a highly visible good citizen business profile is important."
Of course, if you say you are using Social Media, you will have to do it. It's part of doing business online.
Is your business seasonal? You might be surprised at the answer.
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Does your business have seasons?
Some businesses have obvious seasons. For instance, if you have a business selling Christmas cards, you will not be as busy in March as you will be in September and October. Other businesses have seasons that need some consideration and may be harder to see at first.
My business is aimed at people who want to create books and this means they will be spending time on the computer to assemble them. Will they be doing that in July? Some may, but most people are out during the summer and not as busy on the computer as they might be in November. Make a note here about your own business and add to it later as you come up with marketing plans.
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Now you have a good beginning
This is the first section of your plan and the last one we will complete. You now have the framework for the business description and as mentioned earlier, we will add to this with more facts and information as we complete the next sections.
You are now on your way in an exciting new adventure. It's getting a little clearer now, isn't it? You are taking the steps toward making your dream a reality.
If you think you don't have a product, have a look at How to Get Started. Your product is probably right in front of you.What's coming next week? Market Research and Competition. Stay tuned!
Hint: Don't create a domain name yet.
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FIND OUT MORE
Source: http://blog.1-to-1.org.uk/2013/04/making-money-online-from-home-without.html
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