Do you need a
business plan for a home business?

By Colin Dunbar

You may think that because you are starting a home business instead of a formal small business, you do not need a business plan. A business plan can be an essential part of starting and running any business, even a home business. For a home business, the first question I'd ask you is: What are your goals and objectives with your home business?

If you're starting or running your home business on a casual basis - maybe just to make a little spare cash on the side - then I'd say you don't need a business plan. But if it's your goal to run your home business to replace a 9-to-5 job, or to build it into a formal small business, then a business plan will be a valuable document.

A business plan need not be a complex 100-page monster document that you sweat over for months writing and compiling it. Especially for a home business, it can be a simple document, covering certain basic elements to allow you to run and build your business successfully.

The real value of a business plan is when it's regarded as a "live" document, and not something that's written and filed in a desk drawer. Regard it as your business blueprint for running your home business.

What should a business plan for a home business cover?

Let's look at a few practical elements of a business plan.

1. What are you going to do?

Don't be vague. Instead of saying, "I'm going to offer a bookkeeping service.", say something like, "I'm going to offer a bookkeeping service, specializing in tax returns for small businesses." Clearly defining what you're going to do will be valuable in marketing your home business, as also in knowing what you will need to start or run your business.

This is also valuable in determining the costs of starting your home business.

2. What do you need to start your home business?

Not giving this part of starting yuor home business careful thought can result in frustration, and wasted money further down the road. Keeping with the bookkeeping service, we can now list the requirements to start such a service.

Computer and bookkeeping software (will training be needed?)
Business stationery (design and printing)
Service profile (to be written, and maybe printed)
List of small businesses in the area
Small business tax documentation (on-going, to stay up-to date)
etc., etc.

3. How are you going to get your home business known in the marketplace?

Without a doubt, makreting is the lifeblood of a business, and a home business is no different. Actually, with the nature of a home business - for example, not located in a busy mall - it could be considered even more important.

Basic things to think of are...