Do I Really Need A Business Plan?

First, I want to start off by answering the question in the title with a resounding YES! That is, if you are going into business, you need a business plan. However, if you were just going to start selling items at a flea market on one weekend a month, perhaps one would not be necessary. But if you are going to open a business that will be your livelihood that is expected to return a profit to you, you need a plan of how your venture will operate.

The person that is starting a new business venture is probably the one that will use a business plan the most. However, existing companies that want to expand their operations and need an influx of cash use business plans. Before beginning any major initiative most experts agree that writing a new plan or editing an existing one is necessary.

A well thought out plan may be the difference between receiving a loan from a bank and not receiving the loan. Loan officers need to see a business plan in order to make a decision whether or not they are willing to loan on the proposal.

Writing a business plan is not a one-time event. It should be reviewed on a regular basis. Most experts agree that if there is a major change in the company, the business plan should reflect those changes. Perhaps, the company has grown faster than originally projected. Or, perhaps management has changed and has new ideas about the goals of the company. There are many reasons to update your business plan. A good business plan will reflect the reality of the business organization. And business organization objectives change constantly.

Most business plans include similar types of information. Cash flow projections, raising capital, and marketing efforts are among some of the most common. However, all business plans are not the same because all businesses are not the same.

Your plan should reflect you and your business organization in the best light possible. It should tell the story about what you intend for the company from start to finish. A business plan should be written for its audience. Therefore, there may need to be several versions of the same plan, although they all should convey the same message. A plan that is to be sent to a potential partner could contain references and abbreviations that he would understand. However, a plan sent to a banker may need to be more polished, because he might not understand the jargon that you would use in a more informal setting.

A business plan should be long enough to convey everything that is necessary to get your message across to its readers. However, it does not need to be too long and contain too many facts that would confuse the person it was designed for. The more relevant information that is included in the report, the better. However, keep in mind what the goal of the plan is. If you are seeking funding from your banker, you want him to have all the facts and figures that are necessary to make a decision. You do not want him to keep calling you for information that should have been included in your business plan. It could make him believe that you are sloppy and forgetful. You want him to believe that you know what you are doing.

Remember to tell the reader about you, what your objectives are, how you plan to reach them and in what time period you expect to reach them. That is all that a business plan is. As the name implies, it is just a plan and plans change. But how can you get anywhere if you do not have a plan to get there?

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