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If you've ever applied for a small business loan from the bank or

another lender, you know something about business plans. Among other things,

a solid business plan helps lenders evaluate the potential of your

business to beat the odds and succeed long enough to pay back their loan.

If you're starting up a home based business, you may be tempted to skip

the whole process of writing a business plan - after all, no one is

requiring one of you. Don't. A business plan for your home based business

can be the single tool that launches your home based business into high

success mode.



What can a business plan do for your home-based business?

Banks and lenders like business plans because the information that they

contain makes it easier for them to see all the important factors for

your potential success in nice, neat rows. The format for a business

plan is designed to organize everything you know about your business and

help you evaluate your strengths, and make allowances for your

weaknesses.



With a good business plan in hand, you can make educated and informed

decisions that will help propel your home-based business toward success.

The research that you do to complete your business plan will give you a

solid grounding in information about your products, your services, your

capabilities, your market and your marketing options. And that's before

you look at the financials.



Take a look at this step-by-step breakdown of the important parts of a

business plan and how each section can help you make the important

decisions that will make your home-based business an unqualified success.



Executive Summary



The Executive Summary goes first in your business plan - but should be

written last. It's an overview of your business that should concisely

explain your business objectives, your product line, your market and

current prospects, and make financial forecasts for the next 6-12 months

and 1-2 years.



Describe Your Business: Background



Your business plan should contain a quick history of your company - the

people involved and how they became involved, the date you organized,

the type of organization that it is (non-profit? sole proprietorship?

Corporation?)



Current Situation



When you take a hard look at your home based business, you'll be able

to identify your strengths and weaknesses. You may find that you've got

a great product, good positioning in the market - but you haven't put

the effort into marketing that you need.



Future Plans



To make a lot of money! No, not really. By sitting down and

realistically assessing your current situation, your strengths and the places

where you need to bring in help, you can put together a feasible plan for

the next several years. Ask yourself where you want your home based

business to be a year from now. You want to expand your market by ten

percent? What tools will you need to do that? What will it cost you to reach

another 10 percent market share? Analyze each of your goals in the same

way to help you plan out what you'll have to do to get there.



Analyze Your Market



Your company is only one part of the success plan for your home based

business. No matter how good your product or service is, if you're

trying to sell it at the wrong time or the wrong place, you're bucking the

tide. An industry and market analysis is a vital part of your business

plan - and one that will help you organize your own business to compete

successfully.



Describe Your Product or Service in Detail



How well do you know the product you're selling? If you're offering a

service, what's the need for it? Why are you uniquely qualified to offer

it? What's the potential market for your product like? Is it expanding?

Are there particular advantages to your location and your background

that play into your potential for success?



Analyze Your Competition



A good market analysis for your business plan will include an overview

of the industry and its prospects over the next several years as well

as naming your main competitors, their strengths and weaknesses, and how

your business will compete and/or fit into the overall business picture

in your community (and don't forget that the internet is a community

just as much as your city is.)



Identify a Marketing Plan



The market analysis and marketing plan are the meat of your business

plan. This is where you describe step by step what you need to do to

make your business successful. Figure out your prices, and justify them.

Identify your avenues of sales and distribution. Describe how you plan

to advertise and promote your new home-based business. Will you take

advantage of internet marketing, newspaper advertising, radio spots? Why?

Who are you trying to reach? What free publicity can you leverage?



Identify Your Risks and Weaknesses, and Your Response to Them



The second most important part of your business plan is an analysis of

your risks and weaknesses. By identifying your needs and the possible

problems you may encounter, you can plan ahead how to avoid them.



Organize Your Financial Information



The financial information for your home based business should include a

realistic budget, profit and loss forecasts, balance sheets, projected

cash flow statements and a break even analysis (the point at which your

income will equal your expenses).









About the author:

Chris Robertson is an author of Majon International, one of the worlds MOST popular internet marketing companies on the web. Visit this Business and Entrepreneurs Website and Majon's Business and Entrepreneurs directory.