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To Plan or Not to Plan - That is the Question!

Do you really need to write a business plan?

by ParentPreneur  |  2454 views  |  3 comments  |        Rate this now! 

A Business Plan is intended to answer the question “how will I execute my business concept?” Many people ask “Do I really need to write a business plan?” My stock answer to this question is: you need a plan for your business, but whether you actually write it or not depends on a couple of factors: why you’re writing it and who it is for.

The top reasons people write a business plan are:

To get money from outside investors, a business plan competition, or even savvy friends and family. This option usually requires the most formal approach to writing a business plan. The key here is to know who your audience is and what they will be most concerned about. For example, an outside investor wants to know when they’ll make their money back and how much they will get back. For competitions, it is important to follow their outlines and requirements.

To attract employees or high-profile partners. When people go to work at a small company, they are most often doing so because they believe in the owner or the idea. A business plan can help communicate the owner’s vision of the company and show future stakeholders that you are serious and have thought through your idea fully.

To convince yourself that this business is worth your time. If you are going to put your most precious,      valuable and scarcest asset - your time - into a business opportunity, don’t you want to make sure it is the right one? And for those of us who have a significant other, we may also need to convince them we’re serious. Having a business plan shows that you have thought through how the business is going to work and that you are serious about making it successful.

The first two in the list are generally the most often cited reasons by business owners for needing a business plan, leaving #3 as a thought that has never occurred to many. Writing an informal business plan that is not shared with anyone and kept to yourself serves to convince you that you are spending your time (and likely your money) wisely. Even if you go through the process and the business plan never makes it off the white board (like one of mine did!), it is time well spent for the following reason:

The process of research and critical thinking that is required to write a business plan is a good exercise for any business. If you ask (and successfully answer!) the right set of questions, you’ll be better prepared for what lies ahead and more likely to be successful in your endeavor.

About the Author

A successful entrepreneur & mom of 2, Julie grew her biz to multi-millions in revenues while raising her family. She now helps other women to do the same. Visit www.JulieLenzerKirk.com to learn more.

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3 comments so far...

  • I consider a business plan to be an essential...even if it is written on a cocktail napkin and only you ever see it. The act of writing down your goals and plans is powerful. Studies have shown that those who write down their goals are more likely to achieve them than those who don't.

    Flag as inappropriate Posted by Patrysha Korchinski on 17th December 2007

  • I also think that a business plan (in my case anyway) provides a very strict guideline for my partner and I for where "we are going".

    When someone approaches us with an idea, we are able to refer to our b. plan and determine whether it fits in with our initial goals.

    Flag as inappropriate Posted by Naomi on 6th December 2007

  • I think it's key to write a business plan. It will really help you understand why you are starting your business and how you will go about building it. You won't have all the answers but you will start thinknig through many issues and what you need to have in order to execute on your idea. Good points made in this article!

    Flag as inappropriate Posted by Victoria on 3rd December 2007

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