You`ve likely heard about a "business plan," right? People get all
nervous about something that`s supposed to be totally formal, major
deal, and so forth. It`s not. It`s like a "to do" list that`s more
complicated than just a few items. But it *starts* with a 5-10 item
little list on a napkin, half the time. :-)
Your question about a commission versus flat-fee service charge would
be part of your financial section of this plan. It`s often why people
combine a business plan in both something like Word and Excel---writing
tool and spreadsheet. That way you can create scenarios.
Suppose I`m in the market for a really nice home stereo
receiver/amplifier. Back when I was young, they were called receivers,
amps, or "heads." Now they`re probably home-theater central control
transmogrifiers. I dunno. I haven`t been shopping...that`s why I`m
I come to you and tell you I want something that I can plug in my CD
player, VCR (because I have legacy tapes), a DVD player, a cassette
deck, and if I want, an old analog phonograph player (legacy vinyl
LPs). I also want it to get AM/FM, handle a subwoofer and Dolby, and if
I could somehow get XFM and Internet radio, that`d be cool too.
Think of all the information you`d have to collect. Then think of the
written report you`d have to do. That`s worth money, because it takes
time! How much time? You could work out about how much time it`d take
you to run the research and do the report for each of the broad
categories of items. For example, audio, video, speakers, car, digital
When you have some averages, then you`d figure out how much is it worth
per hour for you to do this. A spreadsheet would be a great place to
track the line items, for time and totals, and for money. Then you
could decide if you want to do it on a contract basis, per-hour basis,
or percentage of final price basis.
Now let`s say you think a Denon something would be perfect for me, and
it`ll be around $900. Your service commission would be, say, 20%, or
$180. First of all, would you feel that was fair, given all the
research? Then there`s your report where you explain the pros and cons
compared to maybe five other brands. Taken together, would $180 do it?
Suppose I just say..."Nah...that`s okay, I`ll just wait." What happens
to your money then?
We have a number of community members who provide home entertainment
consulting services. Some are high-end, others more moderate. If you
look at this as a consulting business, then your contract fee would be
a separate issue from the items you purchase and install. (That`s
another aspect---installation and wiring).
Your business "model" is an existing type of business that you can use
that`s sorta-kinda like what you have in mind. You can then examine how
the model works, and get ideas for how your own would work. I`d suggest
that for a home entertainment consulting business, you could use an
Interior Designer model.
The point of a business plan is to create on paper a virtual world in
which your company is open for business. You use your imagination to
get as many real details as possible. Would this be based in a store?
How much room would you need? What would be the monthly lease, utility
bill, water bill, HVAC bill, and phone? How many employees would you
need? And so forth.
If the business plan seems overwhelming, remember that it`s just YOUR
plan. You can work at it, on and off, when you`re feeling confident and
inspired. You can ask specific types of questions, focusing only on,
say, monthly utility bills. Then you can talk to business owners in the
area you have in mind, and get a sense of how much *your* utility bills
See how this works? "Business" isn`t some scarey mystery. :-) It`s when
someone has something and someone else wants that thing and is willing
to give money in exchange. Then you keep an eye on the money and the
thing until both people are satisfied they`ve done a deal.