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Business Plan Considerations for SOHO or Sole Proprietors

Owning a business isn’t a hobby. It’s a job. It’s how you make ends meet. People who go into business for themselves thinking it’s going to be a breeze are usually in for a shock. Being self-employed often means working harder and longer hours than if you worked for a company.

Creating a business plan for your SOHO is the first step toward taking the enterprise seriously. The planning process should consider everything you need to run your business like a business, starting with location.

Set up a workspace

What kind of office, studio, workshop or other workspace you need depends on the kind of work you do. To help get started, consider these questions:

  • How much space do you need? Take into account all the aspects of running your own business, including storing records, meeting with clients or customers, and doing the work itself.

  • Will your space requirements change if your business grows? The nature of your business will determine the answer. For example, an accountant can add clients without adding office space. A caterer may need a bigger kitchen.

  • Can you work at home? Working out of your house sounds great, but it isn’t for everyone. Take time to assess your own working methods and temperament. Are you suited for working at home? Is your home suited to an office or studio?

  • Do you thrive in the company of others? If the answer is yes, consider sharing an office or studio space. Shared worksites — offices or studies that are run cooperatively — are growing in popularity around the country. You can rent your own private space but share a reception area, break room, and equipment like photocopiers.

Avoid the pitfalls of working at home

If a home office or studio makes sense for you, get off on the right foot by following these steps to form a strong business foundation and to separate home from work:

  • Create boundaries between work and your personal life. Set up a designated workspace with professional surroundings. Establish working hours that ensure personal time where business issues don’t encroach on free time and family time.

  • Keep finances separate. Separating your home and business finances is crucially important by establishing bank accounts to handle your business funds. Keep scrupulous track of which expenses are related to your business and which are personal expenses.

  • Get out now and then. Working for yourself at home can be a solitary pursuit. To stay connected, be proactive about meeting people for lunch, joining professional groups, or networking with other local business people.

Bossing yourself

When you’re self-employed, you don’t have to answer to the boss. You are the boss. And it helps to act like one. To remind yourself that you’re the boss, consider doing the following:

  • Review your performance. Judge your performance against business goals and objectives. Make sure you involve your clients, where appropriate. Following major projects, discuss their satisfaction levels as a way to monitor how you and your business are performing.

  • Reward yourself with praise, raises, bonuses, and retirement savings. Some self-employed businesspeople tie their rewards to their business goals and objectives. If, say, you reach one of your more ambitious goals, give yourself a cash bonus out of the business profits. This strategy may sound a little silly, but many freelancers and independent contractors say that these kinds of incentives are key to staying focused and on track.

  • Give yourself a break. One pitfall of being self-employed is that you end up working all the time, which is a recipe for burnout. Give yourself time off now and then. Employees at companies often get to go to off-site conferences or workshops, for example. Give yourself the same opportunities. Take a real vacation now and then with no work at all!

  • Train yourself. Employers know that improving the skills and education or their workforce is crucial to success. Widening your expertise as a sole proprietor can be just as important. Seek out ways to expand your education and skills by attending training sessions, workshops, conferences, and other learning opportunities. If a workshop just happens to be in some lovely destination like Hawaii or the Bahamas, consider it a reward.

Outsourcing

In many ways, working for yourself is easier than ever. These days, the ability to outsource a wide range of functions — from bookkeeping to print design — has expanded dramatically. You can hire a lawyer part-time to handle your legal work or a website developer to tend to your online presence.

As you plan your solo business, identify key functions that you can’t or don’t want to handle yourself. Keep in mind: You don’t have to do all the work in a one-person business, but you do have to be able to afford to bring in help when you need it. Estimate how much outsourcing is likely to cost and include those costs in your budget.

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