Home Business

Defining Your Customer Base

The second question in this section of the business plan asks “Who or what does the business provide these service(s)/product(s) to? Are there specific industries or geographic locations services are provided to, or are they offered to the public? Is the entity Business to Business, Business to Consumer, or both?” Using the final two questions from the previous section, as well as the description of services you wrote for this section, provide a detailed description of your ideal home business customer.

This doesn’t mean that you cannot have customers who don’t fit this description, but you should have some idea of your target market. You will probably have more than one target customer (or market segment), and it is important to provide details for each segment. For instance, as an attorney, you might provide services to individual clients as well as small businesses. Your individual clients might be people specifically concerned with estate planning, whereas your small business clients might have a need for succession planning (for example, who buys, operates, or inherits a business).

What arrangements have been/need to be made with other businesses in order to provide the product(s) and/or service(s) offered by the business? The following sections explain how to answer these questions.

Describing the Geographic Area and Allocated Space for your Work From Home Based Business

You must first answer the question, “Where is the business located? How much space is rented/allocated?” You’ve already stated that the business will be in your home, but here, you should describe your home’s location. What is your neighborhood like? Will clients be able to take public transportation (and will you)? Are coffee shops, restaurants, and other amenities nearby? Is there something you wish were close by, but isn’t? How does that affect your business? Next, describe where your office will be located within your home. Do you need a separate workshop space, too; if so, where is that? (Ideally, a workshop and office would be located right next to each other, but the layout of many homes would make this impractical.)

Describing What Need Your Business Fulfills

The final question in this section of the business plan asks, “What needs or wants of customers are being met?” (Give a brief overview of who you are serving and why.) The information you add here should flow directly from the information you offer to the previous question in this section. If your unique ability to perform graphics work and provide printing services distinguishes you, for example, your target customers might be people who want “one-stop shopping” and want to save time and money by using you for both services.

Describing What the Home Business Does or Provides

To answer the first question in the Business Overview section, list all the services your business will provide. Be specific. For example, if you are starting a bookkeeping business, you might be providing bookkeeping, tax preparation, audit assistance, and financial records organization services.

Offering more than one service provides your business with an advantage. You will draw more customers, and you can often cross sell services - originally gaining a customer because of one service and selling him others as your relationship grows. However, you will want to refrain from offering too many services. Aim for three to five separate services. Fewer than three, and customers are less likely to come to you. More than five, and prospective customers might not believe that you can do everything you say, or might feel that you do so many things because you do nothing well.

As an example, let’s say that you offer sales consulting. Now, if you also offer computer repair, writing, and graphic design, you will be sending a message to clients that you aren’t focused - these services don’t mesh well together, and there appears to be too many of them. In the preceding example, it would be wise to jettison the computer repair. You could then recast the writing, graphic design, and sales consulting as a “one-stop marketing shop,” or a sales-boosting business. The writing and design continue to be offered, but only for sales-related materials for your clients. This pulls your business in to a cohesive offering. Instead of four disparate, unfocused services, you are now offering one, cohesive, inclusive service - building credibility and attracting more clients.

Your Business Location, Address,Web Presence, and Domain Name

Next in this section, you must describe where your business will be located and whether it has a post office box. Presumably, your business will be located in your home. This might not mean, however, that your business will share your home’s mailing address. Using a post office box is one way to separate your personal mail from your business mail. It also affords you some privacy, as you do not have to provide your home address to as many people. Because most boxes are modestly priced, this is a relatively inexpensive way to help separate your business from your personal life.

Within this section of the business plan, you also must answer the questions, “Will the business have a web presence?” and “What is the domain name(s)?” The answer to the first question, in almost all cases, should most certainly be “yes.” As with business names, domain names should be researched carefully to avoid confusion and possible trademark violations. Check for existing domain names on an Internet registration site, such as Godaddy.com. This website provides information on whether a name is in use, and if so, who owns it and when the registration is set to expire.

Describing the Home Business Proprietor

Within this section, you need to name the proprietor(s) of your business and describe what makes that person (or those people) capable of running the business. Thinking through the answer to this question is an important part of preparing your business plan because it helps you understand your business’ strengths and weaknesses in the marketplace. It is highly unlikely you are beginning a business that is truly unique. If a prospective customer knows 30 plumbers, or 40 graphic artists, why should he choose you? What makes you stand out from the crowd of your competition? Address these issues as you answer the questions in this section of the business plan, and be specific.

Making Sure That Your Family Is On Board

Unless you are single and childless, you will need to convene one or more family meetings to be sure that everyone is comfortable with your home business. After all, one of the key words in home business is “home” - and you are going to be changing the way that your family’s home operates somewhat. Although you could, technically, start a home business with no input from your household, it is not recommended. Other members of the household will need to honor your requests to work undisturbed, your need to work weekends or evenings, and perhaps give up some space currently used for other things.

Don’t forget that there is a huge difference between telling your spouse or partner, “I’d like to start a business some day,” and saying, “I am starting my own home business. Please look over my business plan.” You are serious now, and setting aside a separate time to discuss the matter is a clear indication that you are no longer merely dreaming. Here is how to talk about your ideas with the most important people in your life:

• First, sit down alone with your spouse or partner and discuss your desire to have a home business. You don’t have specifics right now, but you do have dreams—share those with him or her!

• Be willing to address reasonable concerns. For example, if your partner objects because you have no savings (a very legitimate reason), discuss what an acceptable level of risk might be. If he or she simply says, “It’s too risky,” and clams up, try to discuss the perceived risks. Ask for the specifics.

• Although you will be in charge of how the business is run, your family should have a say in how the business affects home life. Will you need to alter the quantity or quality of your time together? Your partner might be fine with that, but will insist that Sundays are “family day,” and no work will be done on that day of the week. One or two of these commitments should be okay, but if you are presented with a long list, explain that much of the business is unknown; then, ask for the one or two commitments that are most important.

• Starting and running a business is a 40-hour–plus endeavor for most people. Your spouse or partner needs to understand the time involved and respect your decision enough to work with you on issues such as who does the housework, who chauffeurs the kids, and so on. If you are currently a stay-at-home mom or dad, be sure that your spouse or partner clearly understands that housework and children are no longer your sole priorities and that you expect them to pitch in regularly, without being asked.

• Work through the rest of the information in this website with your spouse or partner. Most people who are starting a home business find that their spouse or partner can be a valuable built-in sounding board. Your partner is usually close enough to be concerned with your business success, yet far enough removed from daily business activities to offer an objective opinion.

• If the discussion becomes heated, don’t be afraid to seek couples counseling. As difficult as starting a business can be, it will be almost impossible if you are going through a breakup at the same time. Your children need to be prepared for changes resulting from your home business, too. If you are a single parent, sit down and talk with your child(ren) about what you are planning to do, and what it means to them. (If you have a spouse or partner, do this together.)

Just be as honest as you can, and don’t be afraid to say, “I don’t know.” If you approach the upcoming changes as a wonderful adventure, chances are your children will be more at ease than if you talk about how scary it is going to be. At the same time, be realistic in your discussion. Although you will want to let your children know about the positive aspects (such as a more flexible schedule), be sure that they know not to volunteer you for a class field trip right away! Provide them with examples of what this venture will mean in terms of your time, your availability, and any additional chores they might need to do.

Overcome Your Inexperience

Everyone has to start somewhere no matter what kind of home business your getting into or getting involved with. So don’t let that hinder or slow down or be an excuse that your inexperienced in the home based business industry!

I noted that ageism actually works in your favor when you strike out on your own. Owning your own business remakes you from an employee who seems “too old” into a consultant who is wise and experienced.

Conversely, if you are on the opposite end of the experience ladder, you might struggle gaining the confidence of potential clients. If you don’t have at least three to five years of experience in your chosen line of work, you will need to prove to prospective customers that you have what it takes to work for them. (And no, a college degree, in and of itself, won’t cut it.) For those with little or no experience, you might have the necessary credibility if you:

• Started a business (and operated it successfully) earlier in your life

• Worked at a job in your chosen field while attending school

• Have a solid background in business in general and possess sufficient basic business and interpersonal skills (often called “transferable skills”) In all three cases, however, you will be working harder than other business owners, who have the experience you don’t. Seriously consider this. The average 12-hour day of a new business owner might be 14 or 16 hours for you, as you gain experience others already possess.

You can avoid many legal problems associated with your business simply by keeping accurate records. This article helps you set up your business records the right way, so you can accurately - and legally - track your business activities from your first day in business and avoid many problems down the road. You will be giving notice, setting up your physical space, and creating a solid record-keeping system. It is exciting, but it has to be done correctly.

This article is relatively short, but take your time. Double-check everything, and make sure that you are ready to begin your home business. Setting up basic business records.

- Creating essential electronic tracking documents
- Creating essential hard-copy records
- Setting up your physical space

Work From Home Business need list

- Self-employment journal
- Business plan
- Business budget
- Calculator or spreadsheet
- Your technology needs, furniture, and other items for your physical home office

Home Business To do list

- Set up customer records
- Set up business management records
- Set up expense and income records
- Learn to record expenses properly
- Create an invoice and income tracking record

Setting Up Basic Home Based Business Records

As you set up your office, there will be several basic sets of records you will need. Some of these will be for tax purposes, whereas others will provide you with the information you need to run your usiness efficiently and make intelligent business decisions.

The following sections outline only the basic record-keeping items you will need. Depending on your chosen field, you might want or need to keep additional records. Check with a professional organization, your accountant, or your attorney if you are unsure about what other records to keep.

Tomorrow we will post more on how to prepare to open for home business success!

Stating How Your Business Will Interact with and Retain Customers

You already know when your prospective customer most wants your services. How will he learn of you at the right time? If he wants to surf, and you offer lessons, will he receive a flyer as he arrives on the boardwalk? Will he hear your ad on the radio as he drives to or lays on the beach?

And how will you respond to customer contact? How will you work with them and follow up on their interest? What information will you provide over the phone? Do you send customers a brochure or price list? You should plan for a clear exchange of information, so your customers know how you will provide the services offered.

Describing Pricing Structure and Rates

I will talk more about pricing in the other sections of this website. But for now, be aware that you should know the going rate for the services you provide. If you are providing services to customers in more than one geographic area, be sure that you know the going rate for each location. Then, in this section of the business plan, you’ll need to list and describe the pricing structure you intend to use for your business and the going rate for similar businesses in your market.

I now hope you have a better understanding of how to create a home business marketing plan that will further help you achieve greater results and better understanding if you ever decide to work from home!