{"id":6969,"date":"2023-05-29T08:47:00","date_gmt":"2023-05-29T14:47:00","guid":{"rendered":"https:\/\/www.blockadvisors.com\/resource-center\/?p=6969"},"modified":"2024-04-19T08:46:05","modified_gmt":"2024-04-19T14:46:05","slug":"small-business-planning","status":"publish","type":"post","link":"https:\/\/www.blockadvisors.com\/resource-center\/build-your-business\/small-business-planning\/","title":{"rendered":"Turning a hobby into a small business | Part 5 \u2013 Plan to succeed"},"content":{"rendered":"
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Reflecting on the Small Business Month, Jamil Khan, Chief Strategy and Small Business Officer at H&R Block<\/a>, concludes his five-part series that guides future entrepreneurs on things to consider when transforming a hobby into a small business. Just joining the discussion? Don\u2019t miss the other articles in this series from Jamil<\/a>.<\/p>\n\n\n\n

Block Advisors by H&R Block is honored to support Small Business Owners all year round. Our friendly experts provide affordable tax<\/a>, bookkeeping<\/a>, payroll<\/a>, and business formation<\/a> expertise and tools 365 days a year, backed by our Block Advisors guarantees<\/a>. <\/p>\n\n\n\n

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Put a good small business plan on paper \u2013 envision your success<\/h2>\n\n\n\n

As I wrap up this series, I want to review the important topics we\u2019ve covered up to this point. I started by defining the line between a hobby and a small business<\/a>. Then I discussed registering a new business<\/a>, building a support squad<\/a>, and maximizing your small business tax position<\/a> \u2013 now what?<\/p>\n\n\n\n

Today, I\u2019m going to share one more crucial action step to take in your early days as a small business owner \u2013 plan, plan, plan.<\/p>\n\n\n\n

Many transitions to full-time business status happen when the company is experiencing a high level of growth. Whether the growth was sudden and unexpected, or anticipated \u2013 if it were me, I\u2019d be sitting down ASAP to get my business goals, strategic plan, and timelines on paper.<\/p>\n\n\n\n

When you make the shift from hobbyist to full-time small biz professional, I believe it\u2019s a good idea to take a holistic look inside and outside of your business. I suggest considering pulling back to a bird\u2019s eye view to inspect your business and the environment it operates in through activities such as market research and a competitive analysis. Give yourself ample time. Head out to your favorite coffee shop or barricade yourself in your home office \u2013 it doesn\u2019t matter where you are. Pick somewhere you can think and dream.<\/p>\n\n\n\n

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Year-Round Small Business Tax Planning<\/h3>

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Learn how to meet with a tax pro<\/a><\/div>\n<\/div><\/div><\/div>\n\n\n\n

One way to start is by conducting a SWOT analysis<\/a> \u2013 \u201cSWOT\u201d is an acronym which stands for Strengths, Weaknesses, Opportunities, and Threats<\/strong>. Strengths and weaknesses are internal<\/em> aspects of you and your company, while opportunities and threats are external<\/em> forces in the environment. This useful assignment will help you think through many facets of your new small business. Keep reading for a walkthrough of the analysis process.<\/p>\n\n\n\n

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  1. Strengths<\/u>: <\/strong>Start by brainstorming a bulleted list of you and your business\u2019s internal<\/em><\/strong> strengths<\/strong><\/em> that might give it an advantage over the competition.<\/li>\n\n\n\n
  2. Weaknesses<\/u>:<\/strong> Then, list out your and your company\u2019s internal<\/em><\/strong> weaknesses<\/strong><\/em> that may need remediation with education or extra resources.<\/li>\n\n\n\n
  3. Opportunities<\/u>: <\/strong>Next, consider all the external<\/em><\/strong> opportunities<\/strong><\/em> that your company is uniquely positioned to benefit from and add bullets for those items.<\/li>\n\n\n\n
  4. Threats<\/u>: <\/strong>Finish by outlining any external<\/em><\/strong> threats<\/strong><\/em> that may potentially disrupt your company\u2019s continued growth.  <\/li>\n<\/ol>\n\n\n\n

    When I conduct a SWOT analysis, I carefully consider each category. I reflect on how I can minimize the bad and maximize the good. Then, I dive deeper into each section and rearrange it using the four-quadrant prioritization method. I assign each bullet point within a section to one of the following headings:<\/p>\n\n\n\n

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    Quadrant I<\/strong>: Urgent and important<\/p>\n\n\n\n

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    Quadrant II<\/strong>: Not urgent, yet important<\/p>\n<\/div><\/div>\n\n\n\n

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    Quadrant III<\/strong>: Urgent, but not important<\/p>\n\n\n\n

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    Quadrant IV<\/strong>: Not urgent, not important<\/p>\n<\/div><\/div>\n<\/div>\n\n\n\n

    I urge you to observe what falls into each region. As a new small business owner, you\u2019re probably already acutely aware of your resource limitations \u2013 especially when it comes to time. Dividing each section of your SWOT analysis into these quadrants may help you. It can help provide perspective on what actions to take now (Quadrant I) versus what can wait or be outsourced (Quadrants II & III), or what maybe doesn\u2019t need to be addressed at all (Quadrant IV).<\/p>\n\n\n\n

    Once you\u2019ve finished the task of inspecting your business and the environment it is operating in from multiple angles, jump right into building out the framework of your small business plan using a \u201clean business model canvas\u201d. The lean business model canvas is a tool to help you put some meat on high priority \u201cbones\u201d of your final business plan. These areas may include:<\/p>\n\n\n\n