Business Purpose and Function

In this section write an accurate yet, concise description of the business. Describe the business you plan to start in narrative form.

What is the principal activity? Be specific. Give product and/or service description(s):

retail sales?

manufacturing?

service?

other?

How will it be started?

a new startup

the expansion of an existing business

purchase of a going business

a franchise operation

actual or projected start up date

Why will it succeed? Promote your idea!

how and why this business will be successful.

what is unique about your business

what is its market "niche"

What is your experience in this business? If you have a current resume of your career include it in an appendix and reference it here. Otherwise write a narrative here and include a resume in the finished product. If you lack specific experience, detail how you plan to gain it, such as training, apprenticeship or working with partners who have experience.

The Marketing Plan

The marketing plan is the core of your business rationale. To develop a consistent sales growth a home based business person must become knowledgeable about the market. To demonstrate your understanding, this section of the home based business plan should seek to concisely answer several basic questions:

Who is your market?

Describe the profile of your typical customer

Age:

Male, female, both:

How many in family:

Annual Family Income:

Location:

Buying patterns:

Reason to buy from you:

Other:

Geographically describe your trading area: (i.e. county, state, national, etc.)

__________

Economically describe your trading area: (single family, average earnings, number of children, etc.)

__________

How large is the market?

Total units or dollars:

Growing: __________ Steady: __________ Decreasing: ___________

If growing, annual growth:

__________

Who is your competition? No small business operates in a vacuum. Get to know and respect the competition. Target your marketing plans. Identify direct competitors (both in terms of geography and product lines), and those who are similar or marginally comparative. Begin by listing names, addresses and products or services. Detail briefly but concisely the following information concerning each of your competitors:

Who are the nearest ones?

How are their businesses similar or competitive to yours?

Do you have a unique "niche"? Describe it.

How will your service or product be better or more salable than your competitors?

Are their businesses growing? Stable? Declining? Why?

What can be learned from observing their operations and/or talking to their present or former clients?

Will you have competitive advantages or disadvantages by operating from home? Be honest!

Remember your business can become more profitable by adopting the good competitive practices and by avoiding their errors.

To help you evaluate how successful your product or service will be. go down. the following list of standard characteristics (you may want to add more from your knowledge of your field) and make a candid evaluation of your competitive "edge" On a scale of "0" (theirs puts mine to shame) to 10 (mine puts their to shame) indicate the potential for you and a total score:

Feature

Price ______

Performance ______

Durability ______

Versatility ______

Speed/accuracy ______

Ease of operation or use ______

Ease of maintenance or repair ______

Ease or cost of installation ______

Size or weight or color ______

Appearance or styling or packaging ______

Total Points __________

A Total Points score of less than 60 indicates that you might reconsider the viability of your product or service and/or think about how you can improve it. Over 80 points indicates a clear competitive edge.

What percent of the market will you penetrate?

1. estimate the market in total units or dollars

2. estimate your planned volume

3. amount your volume will add to total market

4. subtract 3 from 2

Line 4 represents the amount of your planned volume that must be taken away from the competition.

What pricing and sales terms are you planning? The primary consideration in pricing a product or service is the value that it represents to the customer, If on the previous checklist of features, your product is truly ahead of the field, you can command a premium price. On the other hand, if it is a "me too" product, you may have to "buy" a share of the market to get your foothold and then try to move price up later. This is always risky and difficult. One rule will always hold: ultimately the market will set the price. If your selling price does not exceed your costs and expenses by the margin necessary to keep your business healthy you will fail. Know your competitors pricing policies. Send a friend to comparison shop. Is there discounting? Special sales? Price leaders? Make some "blind" phone calls. Detail your pricing policy:

__________

What is your sales plan? Describe how you will sell, distribute and or service what you sell? Be specific. Below are outlined some common practices:

Direct sales by telephone or in person. The tremendous growth of individual sales representatives who sell by party bookings, door to door and through distribution of call back promotional campaigns suggests that careful research is required to be profitable.

Mail Order. Specialized markets for leisure time or unique products have grown as more two income families find less time to shop. Be aware of recent mail order legislation and regulation.

 

 

If you manage a factory, wholesale outlet, retail store, Service shop, or are a contractor, you will need to sell. However great
your product is, no matter what customers think of this, you need to sell to endure.

Direct selling methods are through personal sales efforts, Advertising and, for many businesses, exhibit - including the packaging
and styling of the item itself - in windows, in the establishment, or even both. Establishing a fantastic reputation with the
general public through courtesy and special services is an indirect process of selling. While the latter should never be
neglected, this short discussion will be restricted to direct marketing methods.

To establish Your Company on a firm footing requires a great deal Of aggressive personal selling. You might have established
competition to conquer. Or, if your idea is fresh with minimal or no competition, you've got the extra problem of convincing
people of the value of this new thought. Private selling work is almost always essential to achieve this. If you are not a good
salesperson, seek an employee or asociate who's.

A second way to create sales is by advertising. This may be achieved Through papers, shopping newspapers, the yellow pages section
of the phone directory, and other printed periodicals; radio and tv; handbills, and direct mail. The media you select, in addition
to the message and style of presentation, depends upon the particular customers you would like to reach. Plan and prepare
advertising with care or it'll be unsuccessful. Most media will have the ability to describe the characteristics of their viewers
(readers, listeners, etc.). Since your initial planning described the qualities of your potential clients, you want to match these
characteristics with the media audience. If you are selling expensive jewelry, then don't advertise in high school newspapers.
Should you repair bicycles, you probably need to.

Advertising can be very expensive. It is wise to put a limit upon An amount to invest, then stay within that limitation. To assist
you in deciding how much to spend, study the operating ratios of similar companies. Media advertising salespeople can help you
plan and also prepare ads for you. Be sure to tell them your budget limits.

A third method of sparking sales is effective displays both in Your place of company and out it. If you have had no previous
experience in screen function, you will want to study the topic or turn the job over to someone else. Watch screens of other
businesses and read novels, trade publications, and the literature supplied by equipment manufacturers. It may be wise to hire a
display expert for your opening display and unique occasions, or you may get the services of one on a part-time basis. Much
depends on your type of business and what it takes.

The appropriate number and types of marketing campaign to use vary from business to business and from owner to owner. Some
businesses prosper with low-key sales attempts. Others, like the used-car lots, thrive on competitive, hoop-la promotions. In any
case, the importance of successful selling can't be over-emphasized.

On the other hand, do not Eliminate sight of your Key objective - to Earn a profit. Anyone can produce a large sales volume
selling dollar bills for ninety cents. But that won't last long. So keep control of your own costs, and price your product
carefully.

Record Keeping. 1 essential element of company management is the keeping of adequate records. Study after study indicates that
many manager failures can be attributed to insufficient records or the owner's failure to make use of what information was
accessible . Without records, the businessperson can't see in advance which way the company is going. Up-to-date records may
forecast impending disaster, forewarning one to take steps to prevent it. While extra work must keep a decent set of records, you
will be more than repaid for the effort and expense.

If you are not prepared to maintain adequate records - or have somebody Keep them - you shouldn't attempt and run a small
business. At a minimum, records are needed to substantiate:

1. Your returns under tax legislation, including income tax and social Safety legislation;

2. Your request for credit from equipment manufacturers or even a loan From a lender;

3. Your claims about the company, in case you would like to market it.

However, most important, you want them to run Your Company successfully And to raise your profits. With an adequate. Yet easy,
accounting system you can answer such questions as:

How much business I doing? What are my expenses? Which appear to be too high? What's my gross Profit margin? My net profit? How
much am I piling on my charge enterprise? What is the state of my operating capital? How much money do I have on hand? How much in
your bank? Just how much do I owe my Suppliers? What is my net worth? That is, what is the value of my ownership of The business?
What are the trends in my Receipts, costs, profits, and net worth? Is my financial situation improving Or growing worse? How can
my resources compare with what I owe? What is the Percent of return on my investment? How many cents out of every dollar of Sales
are net profit? Answer these and other questions by preparing and studying balance sheets and profit-and-loss statements. To do
this, it is Important that you record information regarding trades as they happen. Maintain This information in a detailed and
organized manner and you will have the ability to answer the above questions. You will also possess the answers to these other
vital questions About your business as: What services or products do my clients enjoy best? Next best? Not at all? Do I carry the
product most often requested? Am I Qualified to render the services they need most? How many of my charge Customers are slow
payers? Shall I change to money only, or use a credit card Bill program?

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