Tuesday, June 13, 2006

Why you still need a BP even if you work from home

“So you’re in business for yourself? How did you start off?”
“Well I had an idea and then I did a business plan to see how I could make it work

Oh-oh. Just mention the words ‘Business Plan’ and watch the conversation fizzle out right in front of you. You can hear the trample of feet dashing to the exits and smell the scent of fear in the air.

What is it that makes people glaze over or disappear when you mention those words? In particular, why does it make women flee?

Visited a Business Forum yet?

Have you ever visited some of the online business forums? These forums are the place to hang out for people who are in business, or are looking for a start. Take a look at the topics on the message board. What is one of the quietest topics? Yep, business planning. Yet if an aspect of business planning is listed under a different heading, for example ‘marketing plans’ it can be rushed with responses. Is marketing so much more glamorous than Business Planning? Why the fear? These are the very people who need or have a business plan. This should be an active topic.

What is the purpose of a Business Plan?

A business plan will help you to decide if the business is viable before you even start. It could save you thousands of dollars by thinking it through before you rush in. How much money do you have to set up your home based business? If you're like many of us the answer is little or none, so why waste the little you do have on a business venture doomed to fail? A plan will also paint a picture of where you are heading and why. Simple.

The statistics.

Business Victoria shows that 95.7 percent of Victorian businesses are small businesses (96.4 percent throughout Australia) and that at June 2001, an estimated 181,800 (65.2 percent) of all Victorian small businesses operated from or at home. We know too, that home based businesses make up over two-thirds of the total small business picture in Australia.

That's a lot of businesses plugging away to make an income.

Figures from the mid 1990’s show that 6.1% of businesses ceased operating in Australia for reasons other than a change of ownership. 6% isn’t very high, but 23,200 businesses sounds a lot more, doesn’t it? Remember too, that these figures are 10 years old and we've had phenomenal growth in the area of small and HBB since then. Scary thought, isn’t it?

Many HBB’s probably never even make it to the statistics as they are so small and invisible. So if they fail, who will notice? Did they have a business plan?

Image problems.

If a business plan is so worthwhile then why do so many people shy away from it?

Business Plans have an image problem. They've been associated with big business and high finance for so long they deserve to have their own little collar and tie. Doing a business plan involves financial projections, cash flow, and all those hard to work out figures doesn't it?

Short answer? No, they don’t always have to involve the numbers.

If you need a start up loan, a grant, or an investor, then yes, you'll need to do the numbers. After all, who's going to give you money when you can’t tell them how much you will need? Find yourself a good accountant to help you with the financial side of the plan because that's what they are good at.

If you're really serious about building a business then it makes sense to do some numbers anyway. It would be nice to know if you're going to make a profit, wouldn’t it? Keep it simple. If you know you have a profit of $5 per item and you need to make $100 per week, then you know you need to sell 20 items every week. Can you do that? If the answer is ‘no’ then you’d better look for something else to do.

The Living business plan.

I divide business plans into two distinct categories. There is the Traditional business plan which is so loved by banks, and then there is the Living business plan.

The Traditional business plan is the one you keep in your filing cabinet after your merchant facilities or start-up loan have been granted. The Living plan is the kind of plan you can use on a daily or weekly basis to keep you on track. It should set out your ultimate target, list the goals you will need to achieve along the way, and some strategies you need to have in place to meet your goals. It doesn’t have to be set in concrete; neither does it wear a collar and tie! It doesn’t have to be typed or printed. It just has to mean something to you.

My favourite Living business plan is a collage of images all representing things the owner is striving to achieve both personally and professionally. It has a series of images beneath it depicting the steps along the way.

How inspiring is that?

My own plan is in the shape of a step ladder with my Ultimate Business Heaven at the highest point. On each rung I have listed the things I will have managed to do by then. That gives me a map to my goals and also allows me to see when I have reached each rung. When I have another of my ‘you-beaut’ ideas the plan will help me to see if the idea will take me up or down the ladder. I am very attached to my great ideas, but why waste my energy on them if they won’t get me where I want to go?

Your choice.

Business plans are a necessity; there's no question about that. The only decision you have to make is why you want the plan. If you need to show it to someone else, then go the whole way with a traditional plan. If it's for yourself, then do what really means something to you.

Just because it's in pictures doesn’t mean it isn’t a business plan.

So what's scary about that?

Now let me talk to you about statistics………….zzzzzz

About the author:

Anne Maybus [B.A., GradDipBus (HRD)} has 15 years experience in human resources. She is the owner of www.cleverstreak.com.au, a website aimed at increasing the confidence of women returning to work, www.beautybanquet.com.au, an online store and is the creator of a business women’s network at www.businessbyplan.com.au


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