Planning Home Based Business

Planning Home based Business

“Plans are of little importance but planning is essential – Winston Churchill”

Without planning nothing is achieved and every individual in pursuit of their day to day activities knowingly or unknowingly make planning. Perhaps you want to buy a mobile phone today is your plan. Certain steps are taken in order to buy mobile phone. First you would Google for mobile phone models and shops in your area. Then you would make your choice of model you like. You then decide how you reach the shop and may be with one of your friends. You and your friend decide on a suitable time and transport to shop. The procedure for accomplishing the plan is planning which defines how you are going to do it.

Even for buying an item you are making a planning. What if you want to sell, not one item but many items of the same kind? Do you need planning? You definitely need one.

If it is a big establishment or business there will be professionals doing the planning. But when you want to start home based business you need to do it mostly on your own. Hence it is very much necessary to understand various aspects of planning which would help you make your own planning for a successful home based business.

You got a home based business idea means you got a plan. Next is to make a planning for achievement. For that you need to assess whether the idea is good one? A simple feasibility study could help your plan. There are three steps in planning to know whether your business idea is a good one or not. First, is there a market for your product? Second, can you sell it and make money? And third, how much competition you would be facing?

STEP1 MARKET RESEARCH - You got buyers for your product?
Home based business is typical compared to other business establishments. No doubt your personal rapport is important to sell but you need to know whether you are offering product that your customers really need? You cannot sell trekking gadgets in a beach area. If your product satisfies the unmet need of your customers, the success rate of your business is good.

There is an old marketing adage that states, “It costs ten times more money to get a new customer, than to retain an existing one”. Another thing to consider is whether your product or service has something that will encourage a customer to return. Find ways to continually drive your existing customers back to you for service updates, refills, etc. Repeated customers ensure that your business anchors into deep success.

STEP2 PRICING PROCEDURE – Is your product profitable?

The goal of any business is to make a profit. When setting up a business, consideration should be made on how to price the product according to what the market will bear. Pricing is a pretty simple issue. Customer will not pay a single penny more than its true value.
For a successful home based business, the offered service or product price is to be decided based on the cost of production plus the profit margin and also the customer. If the customer is not ready to pay for services or product at the minimum estimated price based on your costs and profit margin then the feasibility of the business is in question. If the customer is ready to pay more than the minimum estimated pricing then sure the intended home based business would be successful. Set product pricing based on feasibility study to make a more sustainable and profitable business. Profit motive should be optimum and not maximum for a successful business.
STEP3 BUSINESS COMPETITION – Are you into a pricing race?
"Never fear of facing competition because it makes you better. – Vason M".

When there is hectic competition, first question comes up is who is cheaper? Some times this price war may turn bloody requiring you to make an aggressive decision. Don’t think that reducing the price is always the solution. An aggressive decision could be to keep the price as it is and to promote the positive differences of your product compares to others. Some customers are more interested in quality or a company’s experience. Refining your product and your marketing strategy can help compete for a customer segment not interested in buying solely off price.

Understanding the above three steps you can prepare the methodology or essential planning. And in addition you can evolve a feasibility study from the collected information and devise a successful home based business plan for yourself.