By Roger Merchant, Extension Educator

A home-based business is a good way to create income and be your own boss. But, starting a home business is not easy, especially if you have not developed a business management and marketing plan.

Running a business without a plan is like sailing a ship without a map and compass. You wind up adrift with no direction, or worse losing money. Here are some direction-finding questions which will ensure a smoother sailing business ship for your home-based business.

1. Why do you want to start and operate your own business?
2. What type of business are you planning?
3. What products or services will you sell?
4. What type of opportunity is it (new, part-time, expansion, seasonal, year-round)?
5. Why does it promise to be successful?
6. What are the growth opportunities?

1. Who are your potential customers?
2. How will you attract and hold your share of the market?
3. Who are your competitors? How are their businesses prospering?
4. How will you promote sales?
5. Who will be your best suppliers? Why?
6. Where will the business be located?
7. What factors will influence your choice of location?
8. What features will your location have?
9. How will your building contribute to your marketing strategy?
10. What will your building layout feature?

    3.   Organization Plan

1. Who will manage the business?
2. What qualifications will you need for managing your business?
3. How many employees will you need? What will they do?
4. What are your plans for employee hiring, salaries and wages, benefits, training and supervision?
5. How will you manage finances?
6. How will you manage record keeping?
7. What consultants or specialists will you need? Why will you need them?
8. What legal form of ownership will you choose? Why?
9. What licenses and permits will you need?
10. What regulations will affect your business?

    4.   Financial Plan

1. What is your total estimated monthly business income for the first year?
2. What will it cost you to open the business and sustain it for eighteen months of operation?
3. What will be your monthly cash flow during the first year?
4. What will your personal monthly financial needs be?
5. What sales volume will you need in order to make a profit during the first three years?
6. What will be the break-even point?
7. What will be your projected assets, liabilities and net worth on the day before you expect to open?
8. What will the capital value of your equipment be?
9. What will your total financial needs be?
10. What will your potential funding sources be?
11. How will you use the money from lenders or investors?
12. How will the loan be secured?

These Cooperative Extension fact sheets will help you think through your business planning questions and activities:

1) "Starting A Business In Your Home:  Weighing The Pros and Cons"  HBB Series,   bulletin #4190

2) "Starting A Home-Based Business"  HBB Fact Sheet Series, bulletin #3007

University of Maine Cooperative Extension also publishes an eight part fact sheet series, "Home-Based Business", for people who are actively developing a home business enterprise.  For information about these publications, contact the Piscataquis County Extension Office at 1-800-287-1491 or 207-564-3301, or go to UMCE's Online Publications Catalog.

(Columbus: The National Center for Research in Vocational Education, The Ohio State University. 1982). 167.

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Information in this web site is provided purely for educational purposes. No responsibility is assumed for any problems associated with the use of products or services mentioned in this web site. No endorsement of products or companies is intended, nor is criticism of unnamed products or companies implied.

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Last Modified: 01/11/08
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