I was meeting with an entrepreneur (a potential client) the other day about his start-up business. When I inquired about his business plan, he mentioned that since he didn’t need investment monies or a loan from the bank, he saw no reason to spend the time developing a business plan. When he asked if I felt differently, I commented that I definitely did and he should develop a business plan.
I’ve been hearing a few stories recently that unless you need to get investment or loans for your business, business plans are no longer a necessity. While they may not be a necessity, I still hold to my statement that you want one!
Don’t think of a business plan as simply a necessity for getting money for your business; rather the business plan will help you to really think through your business ideas and goals. Is it a sound business idea? Does your plan to move forward with your business make sense overall? Do you have the resources you need? Have you considered everything? The best value in a business plan is that you will need to think strategically about your business idea and whether or not the idea is a viable one.
Your business plan should include the information/sections:
- Executive Summary (2 – 3 pages)
- Description of your business and the vision
- An environmental and industry analysis
- Information on your proposed products and/or services
- Production plan (for manufacturing operations)
- Operations plan (location, equipment, suppliers, business operations)
- Marketing and sales plans
- Organizational and management plan (legal structure of your business, management, licenses or permits necessary)
- Risk assessment
- Financial plans (estimate of start-up costs, balance sheet, income statement, cash flow statement)
The business plan doesn’t have to be an onerous process. But you do want one and you need to take the time necessary to get it done. Set aside time to work on your plan where you can work undisturbed. Share a draft with others who can provide you honest feedback. There are many templates available for creating a business plan on the Web – just do a search for “business plan templates” on Google. See the Small Business Administration’s website for tons of information on starting and growing your business, including templates.
Oh…by the way…the client decided to move forward with creating a business plan!
Want to learn more about best practices for small businesses – from startup through to the first few years? The book I co-authored, The CIG to Best Practices for Small Businesses, will be published in October, 2011. Pre-order your copy today!
