As any experienced entrepreneur knows, a business plan is an important tool for a successful venture. A comprehensive, effective plan will help you assess your capabilities and develop targeted strategies for achieving success. A good plan will cover all areas that potentially affect the feasibility and profitability of your business model. In addition to providing guidance for future actions, formulating a plan helps you achieve a realistic, objective picture of your assets, methods and goals. Take a look at these frequently asked questions to get started with your own business plan.
1. Question: Do I really need a business plan?
Yes, you do. Even if you think you have a clear idea of how you are going to start and develop your business, setting it out on paper forces you to be more objective and attentive to details. It is human nature to tend to be optimistic about future schemes. However, the process of drafting the plans will help you assess whether you have actually taken all relevant factors into account, or your plan’s success depends on outcomes you have no way of assuring.
2. Question: Isn’t a business plan only necessary if I’m looking for financing?
No. It is a mistake to think that business plans are just something to give an investor looking for assurances that your business has a good chance of turning a profit. The benefits of a business plan are primarily for you, the owner. At the onset of your venture, a comprehensive plan will help you get a realistic picture of your capabilities and viable strategies. As your business continues to grow, your plan will help you assess whether you are meeting your goals, or a change of direction is needed.
3. Question: What should my business plan look like?
There is not a specific format to follow or a particular length that your plan should be. Most importantly, your plan should include all necessary information for you to use it as a tool for assessing your progress. Typically, a plan will start by setting out your business goals. Next, it should provide a comprehensive picture of your current financial state, as well as solidly grounded projections for future costs and revenues. Following this, outline your current and future strategies, making sure to provide information that will show that these strategies are feasible and will bring you closer to meeting your goals.
If you are writing a business plan to be presented to potential investors, emphasize financial information and include a detailed analysis that supports each of your assertions. Backers want to know that their money is going into a solid venture and not going to be frittered away on hopeful speculation.
4. Question: Do I need a professional’s help to write a business plan?
That will depend on your specific capabilities and background. Generally, it never hurts to have an accountant review your financial information to be sure that your figures are right and your analysis is correct. Finances can get complicated and errors are common, so a second look by a qualified accountant can help eliminate mistakes. An attorney can also review your plan and point out potential legal issues that can affect it, such as the feasibility of obtaining certain necessary permits or variances, the expense of ensuring compliance with regulations and any current or upcoming changes in law that may affect your business model. In addition, if you are planning to submit your plan to potential investors, it can help to have a professional review it and ensure that professional writing and correct terminology is used throughout.
5. Question: What if I want to make changes later?
Circumstances change, and at some point you may wish to adapt your business plan to reflect those changes. If your plan is just for internal use, there is nothing to stop you from changing and improving your plan; it is, in fact, good business sense to do so. If your plan was used in obtaining financial backing, this issue can be more complicated, depending on the type and extent of changes you wish to make. Review your financing agreement, and consult an attorney to determine your legal obligations to your investors.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.