Episode 12: Who Needs a Business Plan?

 

 

I often get asked, do I need to do a business plan for to start my business?

The answer is that it depends on what you are using the business plan for.

The traditional business plan format is lengthy document about 20 pages long with financial plans and complex graphs and charts.  So what’s the purpose of preparing a business plan? Is it a must to create one before starting a business?

Think of a business plan as a resume.  You don’t need a resume to do your job, but you need a resume for potential employers to see your experience and qualifications before they hire you.

Your business plan serves a similar purpose for your business, it includes:

  • Executive summary
  • Business and industry overview
  • Market analysis
  • Competitive analysis
  • Sales and marketing strategy
  • Ownership and management plan
  • Operating plan
  • Financial plan

You’ll need a business plan in the following cases;

  1. When you want to borrow money from a bank.
  2. When you’re pitching to investors
  3. When you’re bringing on partners or other highly skilled professionals be part of your business.

If you’re not looking for a bank loan, investors nor partners for your business, then you probably don’t need to complete a lengthy business plan document, but you’ll need a PLAN.

You’ll need to determine the following for your business;

  • Clearly identify and articulate the purpose of your business
  • What is your business model How will you make money?
  • Who is your target market? What’s  your value preposition – What problem are you helping to solve for your target market.
  • What is the most cost-effective way to communicate with your target market
  • What are your channels of distributions? – How will you make your product or service available to your customers?
  • What are your expenses? How much does it cost to do business? What’s your break-even-point?

Instead of using the traditional business plan, I recommend my clients to use Business Model Canvas to plan their businesses.

I also recommend for you to download my 4 Steps Guide to Creating a Lucrative Business. This guide will help you understand the steps you need to create your successful business.

Now I’d love to hear from you! Tell me about your experience with a business plans – How has it been helpful to you?

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