We’ve all heard the familiar mantra: write a business plan or plan to fail miserably. Business failure is a scary thought, but who has the time to produce a business plan? After all, isn’t this business planning activity taking time away from actually making money? Producing a business plan can feel like a frivolous exercise, especially if you are not applying for a bank loan. The endeavor can be overwhelming and confusing even with the aid of software and templates. The real truth is this:
- your business can flourish without a written plan
- it is very possible for your business to fail even if you have a well defined plan
So why bother? Here’s why: your chances of success will increase exponentially if you spend some time mapping out a strategy.
Imagine taking a road trip from Texas to Washington State without a map or a clear plan. Much like in business, you know what the ultimate goal is, you have a general idea of how you’ll get there, and you even know how much money you can afford to spend. Can you succeed without a roadmap? Absolutely – but be prepared to throw money at any of the inevitable problems that will arise. (Sound familiar?) It is also likely that the trip will be exhausting, expensive, stressful and overwhelming – much like in business.
Having a business plan is like having a solid roadmap for your business. You’ll write about where you are going, how you are going to get there and you will identify the possible obstacles that could prevent you from reaching your goal. You’ll spend time thinking about how your cash will flow: you’ll identify when and how the money is coming in and you’ll determine ahead of time when and how the money will be spent.
Your business plan does not have to be overly complex. It should at minimum include a marketing plan, competitive analysis and financial model. A successful plan will also include a strategy for keeping your plan current and measuring results. One of the best resources for generating and refining your business plan is the SBDC http://www.sba.gov/aboutsba/sbaprograms/sbdc/index.html. They have templates and resources available to guide you through the process. Another great resource is the SBA online library for documents & information: http://www.sba.gov/tools/resourcelibrary/publications/serv_pub_mplan.html
Still unconvinced? Read Tim Berry’s article, “15 Reasons You Need a Business Plan” http://www.entrepreneur.com/startingabusiness/businessplans/businessplancoachtimberry/article83818.html