A Business Plan: Is it Really Essential?

Most experts agree that putting together a business plan is a sound first step once you’ve made the decision to open your own business. Creating a well thought out and organized business plan will definitely increase your odds of becoming a successful entrepreneur. When many entrepreneurs first start out, they may be confused as to what first steps to actually take – a business plan will not only outline a logical way to go about creating your business (in addition to gaining investors and analyzing the competitive space), but it will also allow you to refine and perfect your initial thoughts and ideas.

A vocal minority think that creating a business plan is not warranted or necessary. Some believe that “things don’t really ever go as planned” and argue that you shouldn’t take the time to write a detailed business plan when external factors will likely be changing on a large scale. While this is a valid point, creating a business plan will give the entrepreneur a place to start, and even though pieces may inevitably change, the core ideas will still be driving all the decisions.

Creating a business plan is very important and valuable for any entrepreneur. It will likely be the foundation from which your ideas will grow and change.

Putting Together a Business Plan Forces Disciplined Thinking

Putting your business idea onto paper can be a daunting task for many entrepreneurs. Creating a business plan requires you to transform your ‘idea’ into an actual business that will:

• Perform well in a competitive market
• Grow into a sustainable organization
• Attract investors

Disciplined thinking will allow you to focus and at the same time branch out from your initial ideas and form them into something concrete and actionable.

Creating a business plan requires taking into account every aspect of what a business requires to succeed. From attracting investors, to providing cost estimates and determining your targeting market, creating a business plan will help you determine if your product and/or service has sufficient support to make it to market and be profitable. Creating a business plan should eventually become an iterative process of fine tuning in order to make your plan work.

Creating a Business Plan Reduces the Impact of Mistakes

Taking the time to write a business plan will surface mistakes before you open your business. Creating a business plan forces the author to truly analyze all steps that this potential business will undergo, and access anything that could be detrimental in order to set up contingencies. If you clearly understand the risks involved and anticipate potential problems, you can try and solve them before they become disasters. On paper, mistakes cost nothing and can be fixed in no time. In the business world, any mistakes, even small ones, can be extremely costly.

When you take the time to create a business plan, you’ll begin to develop and refine your problem solving instincts. This is an invaluable skill and something that is at the core of every great business owner. Without creating a business plan, some mistakes could prove to be fatal for your business.

Putting Together a Business Plan is a Confidence Booster

Many entrepreneurs wonder, “am I ready to start my own business?”

Creating a business plan helps to answer that question. Sometimes the answer will be a “no,” “not now,” or “not this business.” In the unfortunate event that this is the answer, creating a business plan might have just saved you your life savings.

When the business plan says “yes, you’re ready” the founder’s hard work is transformed into conviction, confidence and resolve to succeed. Creating a business plan provides a solid foundation for any business owner to go forth and try and attract investors. If you don’t believe in your work/plan, then who will? It’s extremely important that you be your harshest critic, that way, once you are finally happy with your work and have revised/refined your ideas for the umpteenth time, you will have the confidence necessary to get other people on board and excited about your business ideas.

Summary

• Creating a business plan is a valuable exercise for any current or future business owner looking to open their own business.
• The cost is low and the returns are high if you take the time to create a business plan.
• The saying is true, “few plan to fail, but many fail to plan” and we’ll add – “those are the ones who most often pay the price.”
• Make your first great business decision by creating a business plan.