Writing a business plan is essential to make sure you get where you´re going faster. Sure, you can wing it (I have to admit, I´ve done that with many businesses in the past!), but it´s a lot like taking a zig zag path to your destination, rather than the straight line.

You see, having a business plan helps you figure out the steps you need to take in order to reach success. Plus, laying everything out nice and clear before you start is a great way to ensure you have thought things through enough to proceed. So, today, you are going to take your business idea and write a business plan for it. (My apologies, this should have been posted last week, but I had some nasty tech issues . . . my computer died on me!)

There are two reasons to write a business plan. One, for your own personal use, so you know what you are aiming for and have a good idea of how to make your business a success. Two, if you are applying for a loan or need to submit your business plan to someone else, you will want a more detailed plan.

The Personal Business Plan

With the personal business plan, you only need the basics to guide you and let you know if the business idea you are thinking of is actually feasible. Of course, if you want, you can do a professional business plan for personal use, it will give you that much more of an understanding. Here are the elements that need to be included in a personal business plan:

The Business

• Description of your business.
• Marketing plans (how will people know about your business?)
• Competition (who is your competition? How will you be better than they are?)
• Market (who is your target market?)

Finances

• Pricing
• Break-even sheet (how much will you have to sell in order to break even?)
• Start up funds needed

This will give you a basic idea of how your business will get off the ground.

The Professional Business Plan

If you will be requesting funding, you´ll need a far more detailed business plan. This is a good idea anyway, if you want to figure out exactly how things will be run, but most people don´t bother with the full professional business plan unless they have to. Here are the elements of a professional business plan.

The Business

• Description of your business.
• Marketing plans (how will people know about your business?)
• Competition (who is your competition? How will you be better than they are?)
• Market (who is your target market?)
• Operating procedures (how you´ll run your business)
• Staff (if you´ll need extra people)
• Insurance (this may not be necessary if you are working out of your home, without employees)

Finances

• Pricing
• Break-even sheet (how much will you have to sell in order to break even?)
• Start up funds needed
• Income projections (profit and loss)
• 3 year financial summary, the first year should be done by month, by quarters after the first year
• Reasoning behind your projections (why you believe you can earn this amount)
• Expected cash flow

Other Documents

• Copy of business license
• Copy of your resume
• Copy of letters of intent from any suppliers
• Your tax returns for the past 3 years

(NOTE: This information was gathered from the Small Business Administration, which is in the US. If you live in another country, check to see what the regulations are before submitting your business plan to a bank or other financial institution.)

Find the rest of the From Work to Home series HERE. This list will be updated as each new installment in the series is released.
Those of you who have already started your home business, did you write a business plan before you started?

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