Should You Have a Business Plan?
January 10, 2009 |
Whether you’re planning to start your own freelancing business, or you have your business already underway, you have only two reasons to write a business plan:
- To develop a road map in your mind for succeeding in your venture (an internal business plan)
- To demonstrate to someone else you have a roadmap for success (an external business plan)
The Internal Business Plan
A business plan you create for yourself doesn’t need to be a formal document. You can literally create it on a napkin. Many successful entrepreneurs have.
The point in creating an internal business plan is to spend the time thinking about the future of your business, and identifying the challenges that are going to arise and how you’re going to deal with them.
A great way to start is to simply write down everything you can think of concerning:
- What you’re selling
- Who you’re selling it to
- What your customers want
- What your customers will pay
- How you will produce or deliver your services
- How much your operations will cost
- How you can finance your operations until income meets expenses
- How you obtain your customers
- How you collect from them
- How long it will take before your income meets your expenses
- Some calculations to back up your projections
When asked these questions, many budding entrepreneurs say, “I have that all in my head.” The experienced entrepreneurs tell them, “I thought I did, too. But in writing it down, I figured out where I was wrong.”
With so much to think about, writing it all down can seem overwhelming. But since no one else has to read it, it doesn’t have to be pretty. Just sit down, take one topic at a time,, and write everything you can think of on that subject. You’ll find the exercise incredibly enlightening. And when you’re done, you really will end up with a road map in your head.
The External Business Plan
The external business plan is a formal document you prepare for someone else who needs to know that you have a plan to succeed. The “someone else” is usually someone who’s going to invest in your business such as a prospective partner, banker, or investor. When money is at stake, these people want to know that you have a plan, and that your plan makes sense to them. That requires a well-written and well-organized formal business plan.
The length and detail of a formal business plan will generally depend on the size of the loan or investment. Ten to twenty pages of pithy information could adequately support a request for up to $25,000. In the $100,000 plus range, it may take 40 to 50 pages of detail to make your investor or lender feel comfortable.
Don’t let the thought of a formal, written business plan intimidate you, though. If you’re able to write your thoughts down for yourself in any format whatsoever, a competent business plan writer can turn your thoughts and ideas into a brilliant looking document. To get the help you need, begin by referring to your local SCORE office (Service Corps of Retired Executives) for free, confidential advice.
If you’d prefer to create your own formal business plan, simply search for “business plans” in your favorite Internet search engine. You will find a wealth of information on the expected format, and business plan examples you can use.
Adapted from an article originally published on Helium.com, with the author’s permission.
This article was featured in the Working at Home Blog Carnival at Working at Home on the Internet, and in the Small and Home Business Blog Carnival at the Small and Home Business Blog.
Comment from blackbv
Time March 9, 2009 at 12:46 pm
Thank you for your submission to the Small and Home Business blog carnival.