This one keeps going around and around — “Do you need a business plan?” Anthony Cerminaro gave it another shot, citing Jeff Cornwall: “Unless a would-be entrepreneur needs to raise substantial startup capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business…”
Well, yes and no. If you don’t ever need to show your business plan to anyone, maybe you don’t need to write it down. But even F&F (friends and family) investors should want to know the details of what you plan to do and how you plan to make money from it. They would like to know how you will be able to repay them.
Writing a business plan is more about the journey than the destination. It is the process of answering the questions that a business plan must answer that focuses your thinking. If you haven’t answered all the right questions, at best you’ll be making it hard for yourself to succeed, and at worst, you’ll be setting yourself up for failure. I still recommend that you go through the process, think everything through, and answer all the questions. For me, writing is a natural way of testing my logic. If it is hard to find the words or numbers to write, it is usually because I am unclear on the subject. That’s not you? No matter. But if you don’t write it down, make sure you have throroughly examined your business model.
Cerminaro went on to back me up, saying, “Too many people think that a business plan is the beginning, middle and end of starting a new venture. The business plan is simply a reflection of a sound process — it is not the actual process.” And what is implied here is that your first business plan won’t — or shouldn’t — be your last. You will want to revisit your assumptions as your business launches and the results start coming in.
What questions should you answer? A starting point for you might be the Small Business Administration website. It provides examples of business plans for a number of different types of businesses. You can also purchase Business Plan Templates online for around $20. (Just search around on Google.)