Start Free Trial Why you need a business plan Business planning is one of the most crucial parts of starting a business.
You should write a business plan--even if you're not raising money any time soon. You can create a plan in under a month, working part time. Use a presentation format like PowerPoint or Keynote to save time, and make it easier to share your plan.
Not all founders or start-ups are the same, of course. You'll want to plan in more detail if you're raising capital or taking on a lot of risk—like investing your savings, leaving a job, or supporting a family. Less detail is fine if you aren't raising money or taking on much risk.
For example, if you are writing code in your dorm room, you can experiment to find out what consumers will latch onto before thinking about implementation or financing.
But either way, you need a plan, and here's why: To avoid big mistakes: The last thing you want to do is work on your start-up for a year, only to realize you were doomed to fail from the start.
Many founders learn the hard way that they didn't set aside enough capital to reach their goals, took on partners with the wrong skills and resources, or don't have a viable way to make money. Developing and sharing a business plan can help ensure that you're sprinting down the right path.
To counterbalance your emotions: At times during your start-up experience, you'll be manic—so passionate about your ideas you lose sight of reality. At other times, you'll be overwhelmed by doubt, fear, or exhaustion. When your emotions get the best of you, having a business plan lets you step back, and take an objective look at what you are doing and why, what you know for a fact and what you are trying to figure out.
To make sure everyone's on the same page: Chances are, you are not building a company by yourself. Ideally, you'll have partners, so you can launch faster, smarter, and with less need to pay employees or suppliers. Even if you don't have partners, you'll have family, friends, and advisers involved.
A business plan helps get everyone involved in your start-up heading in the same direction. To develop a game plan: At a start-up, execution is everything. That means you have to set priorities, establish goals, and measure performance.
You also need to identify the key questions to answer, like "What features do customers really want? If you raise or borrow money—even from friends and family—you'll need to communicate your vision in a clear, compelling way.
A good business plan will help you do just that.
David Ronick and Jenn Houser are serial entrepreneurs and start-up advisers. They partnered with Inc. To learn more about business planning, take UpStart's on-demand course. Or get a free reality check to find out if your plan is ready for action.
Jul 12, More from Inc.If assumptions have changed, then the plan should change. If assumptions still hold true, then the difference between plan and actual results is a matter of execution. React to surprises according to what direction they go and what cause and effect you see. Misconception #3: "We do not have the time to develop a business continuity plan." Time spent developing and maintaining a business continuity plan is an investment in your company.
Your fixed costs will continue after an event, whether or . Once you recognize the need to plan, you now have the role of becoming the catalyst: for facilitating the buy-in and commitment of your leadership team and the rest of your organization.
I’ve found that very few executives truly understand how to maximize their role in facilitating strategy. Small business owners, freelancers and other solo professionals need to have a Plan B so they can maintain their income and continue supporting their clients if they are unable to work for a.
A business plan is a blueprint of the steps you need to take to build that business. If you are not using the plan to seek funding, the document can be more informal. In this instance, you may use it just to set objectives and to map out the resources needed to achieve those goals within the time you specify.
Recently someone asked me why they needed a business plan if they were getting all the funding they needed from friends and relatives. It sounded to me as if they were thinking of a business plan as just a fund-raising tool.
In fact, a business plan is much more than that: It's a tool for understanding how your business is put together.