A home based business plan is unlike any
other you will ever create. While a standard business plan is built
on this history of an industry, and an individual's success in that
industry, the whole internet world is too new to have that
"history."
It's not quite "seat of your
pants" planning, but creating a home based business plan will
sometimes feel like it.
So
what are the obstacles?
Everyone you deal with -- bankers,
suppliers, friends and family -- will have pre-conceived notions of what a
home based business is, such as:
1. That home based businesses are "hobbies".
Professional designations are a strong convincer of your serious intentions, as is a serious business plan for success. Prior profit, as demonstrated in your income tax returns will be influential in determining
the "professional" status of your home based business plan. Use your advisory board, too, to establish the strength of your business.
2. That the owners of the home based business are inexperienced business
people.
Often home based businesses draw upon skills that are different from the skills used in the owners' careers.
There is something that drove you to this business. Few entrepreneurs embark on a totally new business, risking
their own money. In your home based business plan, detail that experience, that interest, no matter where it comes from. Your lifetime obsession with eclipses of the sun could result in a stunning (and profitable) web site. Make sure your lender/investor knows and trusts your knowledge in the field.
3. That a home based business cannot grow, that it is stuck in a one-person world.
If growth is a possibility, even if the growth won't happen for a year or two down the road, detail
in your home based business plan what will happen -- where will the sales comes from, what workers will be hired, and how will they fit into the scheme of a work from home business, how big can the company get before it will have to shift to traditional work space?
Lenders are not always the most creative people on earth -- help them out with a basic blueprint of what you expect will happen over the mid to long term.
4. That there are no
"assets" in the home based business.
"Asset lending" is big in banks. Most banks will require your signature, your spouse's signature, a second mortgage on your home, and your first born child as collateral.
When your business lacks real "assets", it's harder to prove that the lender will be secure. The best bet is to either go through the SBA or through angel investors. Valuing web site and other intangibles is still pretty dicey stuff, so expect to be questioned on this issue.
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7 Step Business Plan
for SBA Funding
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7 Step Business Plan
for SBA Funding
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Strength in Obtaining Financing
Without doubt, the biggest notion on your side is that the banker sitting across from you probably wants a work from home business, too. Most people do -- surveys show that well over 80% of all people would like to work from home. If you truly can convince that lender that you have a good idea, one that will be profitable, she will be your biggest fan and promoter.
Also, use the "at home" angle as an asset. You have no major overhead to speak of, no rent, no electric. In a new business, cutting these expenses can be a real asset. Be very up front about how you are considering all angles to create the most profitable business possible.
Good luck.
Let me know how you fare.
Also see:
Home Based Business Start Up Ideas. There are many ways of
approaching a home based business. Here are the top suggestions to
start your planning.
Internet Business Startup. Whether your internet business will
be big or small, there are still a lot of options to consider, and a lot
of decisions to make.
Business Ideas for Home. Here are about 50 good ideas for home
businesses. Which one will be yours?
Work from Home Businesses. What's the big difference between a
home based business and a traditional brick and mortar business?
Well, it's not the profit.
Your business
plans are welcome at the SBA, and there are dozens of programs to choose from -- not just the "women's programs".
Your online business plan can spotlight accomplishments that don't fit into a business plan. Creative skills flourish here.
Work from home businesses face the same demographics issues as stick and mortar businesses -- and solve them in the same way: with
outstanding research and presentation.
Identifying potential lenders for your business plan is still the critical first step.
Focus your plan to the type of lender most likely to fund your type of
project.
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