If you’re thinking about going into business from home, it’s a good idea to put some basic financial framework in place to help keep you within budget. Even the smallest website can benefit from a solid business plan. If you’re still at the most basic planning stages of your new business, your plan will be purely conceptual. It will then start to take on a more accurate form when you can fill in the actual numbers from your first sales. Putting this structure in place can help you down the road when you wish to obtain a bank loan, bring new investors on board, or even file your taxes. As you get started, your financial plan needn’t be overly complicated. However, it should include the following elements.
Executive Summary and Company Background
Any business plan should have a basic statement that outlines your sales goals and objectives. This is a brief summary of the rest of the information contained within your report. Although this may not be important now, it will be one of the first things that lending institutions look at if you’re interested in getting a small business loan in the future. You can also give a summary of the basic background or origin of your company, including how you first devised the idea for your home business.
Goals and Services
You should be able to boil down your main financial goals into a few paragraphs. This should include information about the rate of growth you expect, who your target demographic is, and how you plan to reach out to them. For an online shop, this could include information about the ecommerce solutions you plan to use and what section of the online market you’re targeting. In this section, it’s also a good idea to include information about the specific product or service that your home business will be offering. Defining these goals is helpful not only for others, but to keep you on track as you start to grow your business.
Marketing Strategy
This is the part of the plan that includes any market research you’ve conducted. It should show a clear demand for your product or service, and how you plan to fill this demand. Include a list of the marketing tools you plan to use to reach your demographic and how much you plan to spend on marketing. This could include everything from ecommerce development to printed brochures, depending on the nature of your business.
Financial Forecast
This is difficult to predict if you don’t have any sales figures just yet. A financial plan should include information about your projected financial growth, and the amount of money you will need to spend to make this happen. This should include a cash flow statement, projected earnings, and profits or losses. As you are just starting out, you will need to do a bit of research into similar companies to your own to find out about their sales figures and expenses. This will help you formulate your own financial forecast to complete your business plan.
Even if no one sees your financial plan as you start building your home business, it can still be quite useful as a tool to keep you grounded and realistic. Remember that a financial or business plan is a living document, which can be updated as you obtain more specific information.