In today's economy, many may jump into the uncertain waters of entrepreneurship by starting a new home based business. This may have occurred due to loss of a job and the ensuing problems of unemployment, or perhaps it's the fulfillment of a dream long held. Whatever the reason one decides to start up in business for the first time, it's often a step fraught with many difficulties. Before actually going into business, a necessary first step should be to evaluate the business concept in an orderly manner by writing a business plan.
Does the Business Opportunity Make Sense?
There are several reasons to write a formalized business plan. One may have an excellent business model concept in mind, however, when reviewed in a formalized fashion, flaws may easily be seen in logic and new ideas may come to mind while the plan is taking form. During the planning process, basic market research should have or would have been undertaken. Certainly, if outside funding is required, a financial institution will demand a formalized business plan with some form of market research by a prospective entrepreneur. Further, when a businessman writes out a concrete plan, new opportunities and potential roadblocks may be made manifest.
Basic Business Plan Format
While there are numerous sources to obtain guidance in the development of a business plan, it should contain the following basic elements:
- Basic business opportunity concept, product or service being sold
- Description & size of the market
- How Products/Services will be sold/The Sales Plan
- The reason(s) why this business will succeed
- Competitive Analysis
- Financial statements & projections including cash flow analysis
- What could go wrong, potential problems & solutions
Business Opportunity Sanity Test
After everything has been thought out and written down, a would be entrepreneur has to seriously look at the business plan, at the opportunity and make an honest evaluation. Does this opportunity make economic sense in the long run? Does the entrepreneur have the intestinal fortitude to see the business through, no matter what? In order to succeed, most business experts believe that the business owner has to be the champion of this business under all circumstances. In essence, this person must live and breathe the business. Whether a home business, a retail store or an online business, it succeeds or fails with the attitude and effort that the entrepreneur brings to the opportunity.
The key success elements of a particular business will be totally dependent upon the attitude of the prospective business person and how well organized and how well thought out the business was from its outset. If the plan doesn't make real economic sense, it will not deliver the profitability that the hopeful business person expected. If that person has a strong business concept, yet lacks a depth of motivation to succeed, the business will eventually not succeed. In the end, success it's determined by the personal qualities and the motivation of the entrepreneur.
Nick Schklair - Nick Schklair, author, writer and business consultant has published a work on business startups in today's economy.
