| This article shows you how to build a successful home | | | | keep your startup costs and expenses as low as |
| business from scratch. By following these instructions, | | | | possible. You want to resist splurging on a fancy home |
| you should get a business that is suitable for both you | | | | office, new computer, or other unnecessary items. |
| and your customers. This business plan covers the | | | | The best kind of cost or expense is one that will |
| essential steps. However, the success or failure of this | | | | rapidly pay for itself in increased sales. An example is |
| endeavor is your responsibility. | | | | low-cost advertising, such as using the craigslist.org |
| This business plan consists of three stages, which | | | | website. |
| contain the 16 individual steps. Follow these stages and | | | | Stage 3: Achieving the desired results |
| steps in sequence. Then you will minimize your effort, | | | | At this point, you should know whether you have a |
| resources, and risk. | | | | viable business idea. If so, it is time to get serious about |
| Stage 1: Selecting a suitable business idea | | | | your home business. First, you will complete all startup |
| Purpose of this stage is to satisfy your requirements | | | | requirements. Next, you will start business operations, |
| and the apparent needs and desires of prospective | | | | fine tune the business, and start increasing sales and |
| customers. | | | | cash profit. |
| Defining your requirements -- Make a list of the things | | | | Being able to produce the product -- Before |
| you want from your home business. This might include | | | | proceeding with the startup, you must be able to |
| how much of your time the business will take, how | | | | produce a quality product. This is a product that can |
| much cash profit it should produce, and how much it | | | | satisfy the needs and desires of likely customers at a |
| will cost to get started. I recommend a low-cost, | | | | price they can afford. I recommend that you select a |
| low-risk business idea for people just starting out. | | | | business idea that uses mostly your existing abilities |
| Include in this list the skills and other resources you | | | | and resources. However, you might have to go |
| already possess. It is best to start a home business | | | | through a training period to acquire any missing skills. |
| that does not require much more than your existing | | | | Gathering the needed resources -- These resources |
| abilities and assets. | | | | include the equipment and supplies shown on your list |
| Finding a potential idea -- The business idea should | | | | of startup requirements, and the cash needed for |
| allow you to satisfy your above requirements. You | | | | other startup costs and expenses. You also need a |
| might look in the classified advertisements in the local | | | | personal commitment to complete the remaining steps |
| newspaper or yellow pages of the telephone directory | | | | in this business plan. |
| for possible business ideas. You might want to review | | | | Setting up a home office -- Your first home office |
| the hobbies and other activities that you enjoy doing. | | | | should include only the bare essentials to do business. |
| Reviewing the market -- Your business idea should | | | | You might use a kitchen table and chairs for a desk. |
| have a ready market of customers willing and able to | | | | Your file system could consist of boxes filled with |
| pay for the product. By product, I mean goods, | | | | large envelopes for the various categories of |
| information, or services. The best way to verify the | | | | paperwork. At some point, you will want a separate |
| demand for your proposed product is to see if this | | | | business phone for your business. |
| product is currently being advertised. This review of | | | | Setting up an accounting system -- If you have a |
| current advertisements should also give you ideas on | | | | computer, you might want to download a free |
| how to promote your own product. | | | | program to keep your books. Otherwise, you could |
| Stage 2: Preparing the groundwork | | | | use manual ledgers and journals. To maintain control of |
| Purpose of this stage is to perform a suitable amount | | | | your business you might want a daily cash report, a |
| of planning and advance preparations. This planning | | | | weekly report of new customers, and monthly financial |
| should include ways to limit cash expenditures. | | | | statements (balance sheet and income statement). |
| Refining the product design -- This means making the | | | | Completing the startup requirements -- During this step, |
| product more desirable without incurring excessive | | | | you will satisfy all remaining items on your list of startup |
| costs. The best low-cost products would be | | | | requirements. It is especially important that you satisfy |
| information you have acquired and services that you | | | | all governmental and insurance requirements. However, |
| provide personally. It is difficult for the average person | | | | you may wish to delay purchasing certain equipment |
| to make a good home business from selling goods. | | | | and supplies that won't be needed until your business |
| Developing the sales program -- At this point, you have | | | | really gets going. |
| reviewed the advertisements for comparable products | | | | Starting business operations -- At last, you can start |
| and refined the product design. Now you are ready for | | | | business operations. This means to advertise your |
| developing the sales program. Your advertisements | | | | product, get customers, provide your product, and be |
| should emphasize the best features of your product. | | | | paid. You will also have to pay your bills, keep track of |
| You should consider providing a satisfaction | | | | your business transactions, and file any required |
| guaranteed policy. | | | | reports with the government. |
| It can be risky to offer a low sales price to get | | | | During this time, you may want to test various |
| customers. People may think the product is inferior and | | | | advertising messages is to see which one gets the |
| not even worth the low price. A way around this | | | | best results. You also want to correct any operational |
| would be to have a good reason for the low price. | | | | problems that appear. |
| Thus, you may have a contest where winners (there | | | | Improving customer satisfaction -- Now that your |
| should be several) can get a reduced price for your | | | | business is operating smoothly, you need to |
| product. Another way would be to have a TGIF (thank | | | | concentrate on improving customer satisfaction. |
| god it's Friday) sale, or some other type of sale. | | | | Satisfied customers will give you good word of mouth |
| Designing business operations -- As the owner you will | | | | advertising and may refer you to other potential |
| be the main boss of the business. However, your | | | | customers. Keep in mind that customers probably |
| spouse might answer telephone calls, keep the books, | | | | have different needs, desires, and viewpoints than you |
| remind you about appointments or other promises you | | | | have. So be on the lookout for any indications that |
| made, and so on. If you have a large family, you may | | | | customers are dissatisfied with your business |
| choose to assign certain duties to the older kids. | | | | operations or product. Above all, keep any promises |
| Listing the startup requirements -- You need to | | | | you make to customers. Also, be sure that the product |
| determine and list all the requirements before you start | | | | you supply to customers is what they really want. |
| business operations. The most important of these | | | | Increasing sales and cash profit -- Now that you are |
| would be any governmental and insurance | | | | operating successfully, you probably want to increase |
| requirements that apply to your home business. You | | | | sales and cash profit to reach the goals for your home |
| also need to know what equipment and supplies will be | | | | business. You notice I say "cash profit" rather than "net |
| needed to set up your home office and provide your | | | | profit." Cash is the lifeblood of a small business. If the |
| product. | | | | cash runs out and you can't get a loan, you are out of |
| A good way to determine these needs would be to | | | | business. This is so even if your business shows a "net |
| talk to an accountant or bookkeeper, professional | | | | profit." Net profit is an accounting concept that is mainly |
| friend, or retired businessperson. You can also go | | | | important for a large business. For a small business, |
| online and research the home business rules for your | | | | cash profit is what matters. You want more cash |
| city, county, state, and the federal government. | | | | coming in (sales) than is going out (costs and |
| Planning costs and expenses -- it is vitally important to | | | | expenses). |