Do You Need a Business Plan?
One of the frequent questions we get is whether or not an individual actually needs a business plan in order to start a new business. The short answer is no if the owner-operator is not seeking any capital from a third-party. Although there may be some handshake deals or a relative may provide a limited amount of startup capital for a new company without a formal business plan, any financial institution, professional investor, or other funding sources going to require a full scale business plan in order to render their lending or investment decision. One of the other things that should be noted is that it is very difficult to manage all the aspects of starting a new business keeping track of these matters in a person's head. As such, even a very small business plan that is almost like a skeleton document can be very beneficial towards an entrepreneur that is looking to develop this business on a professional basis. One of the key elements to developing
a business plan that is not geared towards capital raising is that it can be treated very much as a free-form roadmap as to what the entrepreneur will do in each month that the business is being launched. Most importantly, a well written business plan does feature a timeline of events that the entrepreneur will engage in order to boost the visibility of the business of providing a comprehensive amount of services and products to the general public.
One of the other benefits to having a business plan is that it can be continually modified and expanded as new things within the business occur. When an individual is starting a new business they are often going to run into situations, both good and bad, that need to be addressed that will impact the way that the business will operate moving forward. As such, many entrepreneurs take a look at a business plan is actually a living document that grows alongside the business. Many business plan writing firms will often take this view as well and will provide for the fact that the business is going to change shape as new money comes in, as new customers are acquired, and as economic circumstances change. One of the important things to focus on within a personal business plan as well is the fact that there will be recessions from time to time more the business environment will change and will require a significant amount of work on behalf of the entrepreneur.
As it relates to a small roadmap business plan there can be a section dedicated to what would happen if a regulation changes, if the economy does very well, if the economy does poorly, and other circumstances that are generally outside of the entrepreneur's control. Good entrepreneurship is substantially about risk management and what to do when a risk becomes a reality. In a business plan that is going to only be developed specific for the entrepreneur, the management team, were key employees – in overview of how each risk can be handled and mitigated can be included and will be an invaluable source of the business over the life of its operation. This is something that is not often included in a formal business plan that is written specifically for funding source, but it can be great so that a very specific and detailed game plan can be enacted for each potential scenario that may occur. Of course, it is difficult to predict every single thing that can
occur with the business but it does help to have in overview of what could be done in the event that there is a significant problem. This is especially true if the business is not generating as much revenue that will was anticipated in a formal pro forma financial statement.
One of the key issues that many people have when developing a business plan – whether it's for a bank or just for the growth of the business – is that they often get distracted and will leave the document unfinished. It is difficult to write these documents and it can be kind of boring at times. One of the key things to know is that it really should just focus significantly on the current situation at hand and how to grow the business over a five-year period. Many people often take the entire vision of the company and put it directly within the document but this can lead to a lot of confusion and a scattered business planning document. As such, it is important that a laser sharp focus is applied when you are developing this type of documentation so that it is very clear not only to you but also to any reader as well as to the vision of the business, how certain matters are handled, and how the company will grow over a specified period of time.
This website has a significant amount of information as well as a number of different templates that can be used in conjunction with business planning activities. We thank you for taking the time to review our website and if you have any questions please feel free to contact us anytime via the contact us page.