Why Do I Need a Business Plan?
“Why do I need a business plan? Writing one is so difficult and I don’t have time!”
A business plan is the blue print for your business. It tells others the projected course of action for your business over a period of time.
If you are in need of OPM (Other People’s Money) for your business, a business plan is critical. Banks, lenders, and investors will thoroughly examine your plan in order to decide whether or not to finance your business venture.
A well-executed plan will describe your business including: the market conditions, the industry, your competition, plan of operations, marketing strategies, problem-solving strategies, and management policies.
The financial projections may be the most important component of the plan. Institutional lenders and sophisticated investors will expect to see the following in your plan:
- an income statement,
- a balance sheet, and
- a statement of cash flows.
The financial projections will also tell you whether your business makes sense for the long term.
A business plan also enables you, the business owner, to anticipate costs, plan for difficulties, and take advantage of opportunities. It will keep you on track when designing and implementing strategies for growth and expansion.
Keep in mind that your business plan is a “living” document. It is not meant to sit on a shelf in your office. As you make changes and adjustments in your business, you should reflect those changes in your plan.
So, consider this: Would you build a house without a blueprint? Why would you build a business without a business plan?