Business Plans – Part 1

Is either of the following the way you respond when someone suggests that you need a business plan for your business:

“I’ve been running this business for five years without a plan. I know what I’m doing. Writing a business plan is hogwash!”

“Ugh! Why do I need a business plan? I’m just going to be a one person operation providing marketing services. I know what I’m doing. Anyway, writing a plan will take me away from more important tasks.”

These are common reactions. Let me be clear at the outset that a plan is not busy work. For a startup, creating a business plan is a process for clarifying that your great idea for a business is solid enough to financially support you while achieving your goals. For an existing business, a plan will help you crystalize your business goals and point you in the direction of continued growth and success.

There are times when business plans are absolutely necessary. They need to be available when seeking funding or loans. Well articulated plans may help you attract key employees. But the greatest value of a business plan is to you, the business owner. You don’t start on a long trip without a destination, a map, or knowing where you will sleep. The business plan will give you the same focus and certainty of direction for your business.

In writing a plan you force yourself to critically evaluate your business model and think through all aspects of running the business. By writing the plan before you start the business, you may avoid stubbing your toe or even making big mistakes. I have seen seemingly great ideas tabled because the plan proved the business would not be viable. I have seen promising businesses stumble for lack of planning. Once you have a plan, it becomes the blueprint for running the business.

The process of developing a plan will help you clarify your vision, your goals, your products or services, your markets, and your core competencies. Using the plan will help you and your team focus on the strategy and tactics to arrive at your destination without taking needless detours. No business is too small or too large to benefit from the planning process and the resulting business plan.

Once written a plan is a living document to which you should constantly refer, and which you should modify as the business evolves.

During the next few posts I will describe the important elements of a business plan and how to structure a meaningful plan.