Archive for July, 2011
How to Prepare a Business Plan For Your Network Marketing Or Home Based Business
Nine times out of ten, the network marketer or home based business owner consists of one person. With that being said it may be very easy to blow this off as something that is not important. However, the fact that you are a solo endeavor is the very reason why you need to have a plan in place. Here’s an outline some of the key components of your business plan for your network marketing or home based business.
Company Overview
In this section, you define your vision and mission statements. These statements clearly define the purpose of your business and what exactly you want to achieve. Next in this section are your goals and objectives. Here is where you state what you want to accomplish and how you will bring that into fruition. Do not skip this part because it’s your goals and objectives that will keep you on track when life gets in the way.
Business Environment
In this section you will describe your competition. Who is the competition? People who are providing the same services as you that’s who. Your fellow network marketers, whether they are in your primary business or not. You also want to study the demand for your product. What’s the economic climate? Is there high unemployment or are people happily going to their J.O.B.?
Company Description and Strategy
Being self employed, you don’t need to go into great detail describing your company. However, you want to discuss your strengths and weaknesses. At this point in the game you are the entire management team and as such you need to determine what you do well and where you need assistance. Then, go find people who are strong in areas. Also describe your work space. Where will you set up your office, in a spare room or a corner of your living room? What are your office hours? Are you working 3 hours 5 days a week or 6 hours 4 days? What exactly will you be responsible for and what will you outsource?
Financial
Very import section; after all you want your business to be profitable. How much do you have set aside to start your venture? How much money do you want to earn and how soon? You should include a balance sheet, income statement and cash flow statement. There are many resources available to aid you with section so don’t panic.
Action Plan
Your action plan is your road map to move your business forward. It may include you hiring a mentor, or attending a training seminar. Whatever it is, don’t move forward without one. The reason why is because there is no one to keep you accountable or tell you what to do next. That’s your responsibility. Remember, the moment you decide to start your network marketing or home based business, you immediately become the CEO and everyone answers to the CEO.
In conclusion, your business plan is a living document and it will and should change over time. Your business planning is about determining your future. Where do you want your business to go? Where do you want it to be in 1, 3, and 5 years and what are the steps to get it there? Some people don’t see the need for a business plan especially if they work alone; however, every business owner needs a plan, yes even you.
How To Prepare A Business Plan
Firstly, let’s define a small business plan. A small business plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for the business to succeed. It is a written explanation of its business model.
Business plans are used internally by management and are also used to convince outsiders such as banks or venture capitalists to invest money into a small business.
Business plans often quickly become out of date. One common belief within business circles is that the actual plan may have little value, but what is more important is the process of planning, through which the manager gains a greater understanding of the business and of the options available.
Here’s An Example Of A Business Plan
Most business plans can be seen as a collection of ‘sub plans’ including a marketing plan, financial plan, production plan, and human resource plan.
The business plan has many forms. There is a format that is typical:
* Executive summary
- explains the basic business model
- gives rationale for the strategy
* Background
- gives short history of company (unless it is a new company)
- provides background details such as:
age of company
number of employees
annual sales figures
location of facilities
form of ownership including
- sole proprietor
- partnership
- entrepreneurial startup
- private corporate startup
- publicly traded corporation
- limited liability company
- public utility
- Non Profit Organization
- background of key personnel including
owners
senior managers
head scientists and researchers
* Marketing & Sales
- the macro environment
- the competitive environment
- the industry
- the customers priorities
- product strategy
- pricing strategy
- promotion strategy
- distribution strategy
* Production and Manufacturing/Operations
- describe all processes
- production facility requirements – size, layout, capacity, location
- inventory requirements – raw materials inventory, finished goods inventory, warehouse space requirements
- equipment requirements
- supply chain requirements
- fixed cost allocation
* Finance
- source of funds
- existing loans and liabilities
- projected sales and costs
- break even analysis
- expected return
- monthly pro-forma cash flow statement
* Human Resources
- assign responsibilities
- training required
- skills required
- union issues
- compensation
- skills availability
- new hiring
Other specialized sections such as product research and development, legal strategies, marketing research, or inter-company collaborations, are added to deal with unique features or characteristics of the business or its markets.