Business Planning For the Home-Based Entrepreneur

Are you and Entrepreneur or a Small Business Owner?

While many people think Entrepreneurship and Small Business Ownership are the same thing, there really is a difference. Whether you’re thinking of starting a small business to follow a dream of not having to work at a job you detest, or, your convinced there’s “a better way to build a mouse trap”, creating an effective, concise, and working business plan should reflect this difference in four distinct ways:

Wealth Creation: Most small business ventures are started to simply generate an income that replaces the owner’s traditional method of employment. A successful entrepreneurial venture, however, has potential to create substantial wealth, typically from a business model that seeks multiple ways to generate passive methods of generating revenue and income.

Speed of Wealth Creation: The success of a small business can literally take a lifetime to generate sustainable profit. If the goal, however, is to create wealth, using an entrepreneurial business model can result in rapid growth within the first five years and huge profit potential for the long-term.

Risk: The business risk of an entrepreneurial venture is usually higher than that of a small business. Motivation to achieve high profits is the source of most entrepreneurs, while the need to create and coddle a unique idea, build an organization, or develop the product is the usual impetus for success of the small business owner.

Innovation: Entrepreneurship often requires a strong degree of critical thinking which usually results in substantial innovation beyond what a traditional small business model might require. This innovation gives the entrepreneurial venture competitive advantage necessary to create extraordinary wealth. The innovation may be in the product or service itself, or in the business processes used to deliver it.

So what’s your plan?

Many people who want to start a home business ask if they really need a business plan. My answer is usually in the form of a very simple question: How bad do you really need to start a home based business?

Writing a business plan for your home based business should be considered essential for many reasons. Perhaps the most important reason to write a full plan is that it will help you gain focus and think through each aspect of your business. Having a working written document will also help you to remain and regain focus when you get discouraged or feel overwhelmed.

So, one of the best things you can do for yourself before you start your business is to sit down and write your business plan. It doesn’t have to be very long, but does have to be written in a fashion that clearly defines you, your vision, and your business goals – both short and long term.