Brilliant Business Planning

Now you've read iHubbub's Starting Up A Home Business article which is stacked full of useful info and advice to help you set off down the home working path, let's now look at how to be a brilliant business planner.

The clearer an idea you have of the path you want your home business to follow, the easier it will be for you to work towards your short and long-term goals. 

You'll get become an ace at sales to ensure your new new business money-making venture becomes a success. Being your own boss seems to be easy but you need to be focused on earning revenue.

Starting up your new business needs financial planning

 

Sales

Here are some good tips to get some idea of your likely level of sales and therefore revenue (back to the research idea):

 

  • Spec out details of the exact product or service that you’ll be selling. Even if neither is in existence, have a detailed description that a prospect buyer would understand.
  • Also have pricing and delivery details available, everything that would be needed to clinch a real sale.
  • Draw up a list of 20 target companies that already use this product or service. You’ll need a minimum 20 to get a representative response.
  • Contact them by email or phone (the best way) explaining what you are doing by way of business idea research.
  • Succinctly explain the product or service along with  its advantages versus the rival product that they already buy.
  • Ask them if it were available now would they buy it/try it – Yes/Most likely/Probably/Not now/No. Only use the first two scores.
  • You are looking for a score of 75% (15 out of 20). If not, go back over your idea and improve it.
  • Calculate how many proposals you will issue in a month. Take a 33% success rate even though your research suggested 75%.
  • Take a 50% re-order estimate and note the average length of time before re-ordering will be necessary by the client.
  • Using your success rate, re-ordering and pricing assumptions, put your revenue projections into your sales targets and business plan forecasts.
  • After 2 months of real selling, correct your assumptions where necessary.

 

Easy! Actually it isn’t. It’s a lot of hard work but it will be invaluable for sound sales targeting and for getting any form of loan or funding pre-launch.

Finance

In addition, plan your finances carefully: what start-up costs will you have? What will your monthly outgoings be? If you have a physical product to sell can you store it at home or will you need to hire a storage facility? Think about everything that may have a financial implication for you and write it into your plan, including the cost of hiring an accountant if you are going to use one.

Do your research on what funding might be available to you. The Government’s website has a detailed finance section for home business owners. 

What will you do if your home business suddenly takes off? How will you handle an increased workload? Can you afford to employ more people if there is a greater demand than you anticipated? Would you be able to outsource parts of your company (such as admin and accounts) to outsiders to allow you to concentrate on your core business?

If you’re going to be employing anybody then you need to read up on the legal and HR side of things as well as the rules surrounding tax and National Insurance contributions, or would you prefer to use independent self employed contractors? 

Finally, decide what type of business you want to be – sole trader, partnership or private limited company? If funding or loans are involved you may need to be a limited company (this is quite quick and cheap through specialist organisations) for the sake of performance transparency.

Updating your business plan should become a regular task approximately every six months or so. This will help you remain focused and keep you heading in the right direction.
 
Being a home business entreprenuer is never easy but then it's not all that hard either.

If you're up for being a life-long learner you can easily bone up on how to be your own boss from our range of business advice - we want to ram your new business with how to learning.

 

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