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Why your Home Business needs a Business Plan

By on July 10, 2014 in Administration

You might think that business plans are for large and better established businesses that have more funds, overheads and a bigger client base, but this just isn’t the case. In truth, it is a small work from home business that needs a business plan the most. Here’s why…

What Is a Business Plan?

business plan

The idea of a business plan couldn’t be simpler, but also couldn’t be easier to get wrong. The concept is simple; it is a comprehensive document that outlines all of your ideas and thoughts about your business, written down in an easy to access document.

Not only does it give your business more structure, but it can also help you in future when your client base increases and the business starts to grow and develop. Of course the plan you make and the way in which you set it out isn’t set in stone. We all know that no matter how complete your business plan is there will always be some factor beyond your control, be it market changes or a natural disaster.

Even more than that, a business plan isn’t a legal document you have to adhere to indefinitely. After all, it is your business and if a few years down the road you decide to change it up a bit, your business plan should be able to accommodate it.

In simple terms, a business plan is a rough guide to how your business is going to develop as well as an outline of exactly what your business is at the moment, e.g. employees, financial predictions. Not only can it be used in the future but it is also a useful way right now of keeping track of all of the moving parts involved in a business.

Why does a Small Business need a Business Plan?

Of course, as with everything, there are a few businesses that have been able to make it big without business plans. Unfortunately for you, this is not the norm and it is now a well established business fact that a business plan will help you succeed.

As mentioned above, for a small business a business plan is near essential, it works to help guide you through the tricky unforeseeable hurdles that might loom in the future.

Outside of actual ‘planning’, a business plan is like a big flashing arrow to investors. Most likely at some point in your businesses lifetime, you will need a little boost or cash injection to help you get to the next step. This is where investors come in and where your business plan comes to the fore.

Investors can be a scary word, but it really doesn’t have to be. A bank is an investor, as is anyone who can buy a share in your business. So long as your business plan is water-tight and the business is nurtured and controlled by you, the risk for such investments should be low.

Investors work in risk and they want projects that will almost defiantly see a return on their investment. Banks, for example, won’t lend money to a company they think will fail – they make no money that way. A business plan can therefore show anyone that might be interested that not only do you have your company together but you’ve also thought about making plans for the future.

Read more about making a business plan.

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