Does Your Small Business Need A Business Plan?

What’s the first thing every consultant will ask when you tell them you’re starting a new business?

“Do you have a business plan?”  We agree that a business plan is important but maybe not for the reasons they’re thinking.  The process of discovery in writing a business plan can be far more valuable to you than the plan itself!

Writing a business plan just because everyone says so is silly.

Write the plan because you’re passionate about your business and you want it to succeed!

If you’re starting your business small and building it slowly then the business plan is only needed as your road map.  It should contain your structure, goals, marketing techniques and financials just to name a few.  It’s something you write deliberately and then make the commitment to check again and again.  This is how you stay on track.

The process of starting and running a business makes getting off track way too easy.

Neil and I refer to it as ‘shiny objects.’  It’s all those distracting things that seemed like a good idea at the time but ultimately turn out to be a big waste!  Things will complicate your business life and a plan is needed to make it simple again.  The plan becomes your ‘step by step instructions’ for running the business.  This is how we started our remodeling business so many years ago.  Step by step, deliberate and not taking any big chances or large business loans.  Use the business plan as an outline for your success.

The process of writing a business plan should make you think.

There are seven main categories in most business plans, ask yourself, ‘How will this category contribute to my success or hinder it?’  Reality check, if it’s not contributing to your success in some way then it’s dragging you down.  It will need to be fixed and looked at as an opportunity for improvement in yourself or others.  Be objective every time you check back on your plan.  Is everything functioning like you need it to?  Notice I did not say ‘functioning as you planned’ because sometimes things don’t work out as you plan no matter how hard you try.  There will always need to be adjustments.

Some business types will require ‘acquisition of capital.’  In other words, you’re going to need money to get this thing going.  Where will you get the money and why is anyone going to loan it to you in the first place?

It would be great if you could walk in, pitch your idea to a bank and have them give you $100,000 to start a business.

This is not going to happen!  They need proof you’ve thought this through and have all the bases covered.  Like before, this business plan is your roadmap to success except now it will need to have a lot more flair.  Few people will want to read a dry, boring business plan without colorful charts or stylish formatting.  This approach shows you care about your business and believe in it.  If you can’t be passionate about your business and covey it through the business plan then nobody else will be passionate about it either.  Believe in your business idea and its certain success.  The plan should also be neat, clear, concise and accurate.  Something full of mistakes, typos and rambling thoughts is not going to get it done either.

The bottom line is this, any time you create a plan it should be clear to you and everyone else involved.  It’s how excitement and buy-in are created.  It doesn’t have to be long or complicated but it does have to be something everyone will get passionate about.