So, you’ve finally found a home-based business idea that you would like to put into action. Fantastic –  but with that excitement and energy, would it be wise to just take the plunge and start the business ad take everything as it comes? Well yes, and no…

When starting a new, home-based business you need to plan ahead. Yes, spontaneity is good, but you need to have a plan of action in terms of how you’ll run the business, how you will market your business, how you will pay the bills – your running costs and how you will pay your bills.

Planning for your home-based business is important because it helps you reach a goal for the future, it also helps if you are trying to get financing for your home-based business.

It’s worth noting here that if you are thinking of applying for bank loans etc, you need to have a business plan that contains important things like financial forecasts if you want to be taken seriously.

There are four basic components for each stage of building a successful home-based business – don’t cut corners…if you don’t have enough motivation and willpower to get the basics right, ask yourself if you are really ready to commit to starting a home-based business?

The components of a home-based business model include the infrastructure. The core capabilities are the capabilities and competencies that are you need to run your business.

1. What is your value proposition of your home-based business?

The offering of a home-based business model is the value proposition. These are the products and services a business offers, and they are what the customer pays for.

There are a number of factors that can determine how valuable your home-based business is to your customers – the price and the quality of your product or service, and this will need to give your competitors a run for their money.

2. Who are your customers?

Next come the customers. You need to know who your target audience (your customers) are otherwise you won’t know who you are marketing your products or service to.

3. How will you deliver?

Your customers will be expecting to get their product or service they have paid you for – and if they don’t, you and everyone else will soon hear about it!

The distribution channel is the means, which a company delivers its goods and services to a customer. When you are doing your research, this could be as simple as the postal service  you will use to deliver raw goods to customers, or how you will deliver electronic goods online.

4. How will you build good customer relationships?

I’ve lost count of the number of times I’ve experienced poor customer service – I’m sure you have been at the receiving end of it, too. Don’t businesses know that they don’t have a business without customers?

If you think about your personal experiences, you’ll realise how important customer relationships are to the home-based business model. And it’s important that you have a plan in place about how you will deal with difficult situations (complaints, refunds).

You also need to think about how you will nurture your customers once you have them – there is a saying that it’s cheaper to keep your customers than it is to get new ones.

Don’t let the thought of planning how you will run the nitty gritty of your home-based business get you down. This is the beginning of something great for you – your very own home-based business, enjoy it!