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Tuesday, July 1, 2008

Do I Really Need a Business Plan?

I was helping my sister write her business plan for her new venture. It was going slowly and she asked if we really needed to do this. I confess - when I first started in business for myself, I did not have a business plan. And the world did not end. There is no law that says you have to have one. But it sure makes building your business a lot easier! It's one thing to have a business idea in your head. It's another thing entirely to bring it into reality. Creating a business plan will help you through the process.

What's in a business plan? It depends. You can create a fairly elaborate plan with an executive summary, market analysis, business strategy, financial plan, management summary, implementation steps and much more. These are great if you are applying for a loan to start your new business or are bringing in partners or investors. But if you just want a plan to help you get your new home business idea off the ground, it can be much simpler.

First you need to decide what you are going to do. What products or services will you offer? Are there similar products or services already available? What makes yours different? What will it cost to make/get my products? Will I need supplies to offer my services? How much will they cost? What should I charge?

Next you need to do some research. Who is your target market? How big is it? Is it a growing market? How are your competitors doing?

Now you need to decide how you will market your products and/or services. Online? Offline? Both? How will you track the success of your marketing campaigns? What will your marketing cost?

Last, you need to look at your financial status. Is the cost of obtaining your products or offering your services plus the cost of marketing affordable? Will you need a loan a partner to cover these costs? How will you cover expenses until you make a profit? Will you need to work at your job for a while? If you aren't currently employed, do you have enough savings to last until you begin to make money?

Answering all these questions and writing them down in a clear and concise way is the basis for your business plan. Sometimes this is all you need. If you need something more professional and don't want to do it yourself, there are some great business planning software packages available. I personally recommend Business Plan Pro which you can purchase from Palo Alto Software (www.paloalto.com). They offer a variety of business plan software and marketing plan software.

4 comments:

feistysideoffifty said...

Your ideas about creating a business plan are so helpful. They are straightforward, simple to do, and workable. I agree, most of us only need the basics to launch our business and keep it on track. Wonderful advice!

Beverly Mahone said...

Business Plans are important. I also believe have a Goals Plan is also important. That way you can keep track of your progress along the way.

Another great post!

Pam Archer said...

Thank you for this. Making a business plan can feel so daunting, that many people don't attempt it. Putting it in less complicated terms not only makes sense, but will encourage small business owners to begin to make a plan.

Karen O'Bannon said...

Excellent advice. Thanks for sharing it.