Small Business Advice and Articles USA

You Don’t Need A Business Plan by Gail Wallace

Is that a new truth or false information? In the last few months there have been blogs, discussion threads on many networking sites, tweets, and even web pages devoted to this theory that you don’t need a business plan. The problem is that not only is it almost always false (I’ve never seen a case where it was true but there might be one) but it is extremely misleading.

Common sense and logic also say it isn’t true. Who would invest in a company without being able to study it in-depth? No smart investor, bank or venture capital company would. To give the people who state this opinion the benefit of the doubt, perhaps they are referring to later stages in the funding process. However, you should be aware that the SBA requires a business plan (even though it can be limited to filling out the SBA business plan form) as does almost every venture capital company, investment bank and investor group. Many of these companies will allow online submittal of a business plan for them to review. Others ask for the Executive Summary, which is the first page of a business plan, and is an overview of the company, industry, management team, and target market. In most cases, the Executive Summary is the last part written for a business plan and investors or lenders are aware of that.

Even if you don’t need any funding, there is still an excellent reason for having a business plan. It should also serve as a blueprint for your business, and a roadmap as to where you are going and how you are going to get there. It helps keep the start-up company focused on their goals. It should be agile and highly adaptable to economic and market factors. A continuously updated plan is always ready to take advantage of new opportunities and markets and serves as a means of judging whether these opportunities and/or markets can be supported and profitable to your core business. The financials of your plan serve as a benchmark against which you can measure progress and analyze any problems.

So the next time you read or hear that you don’t need a business plan you can ignore them or respond that those people promoting that concept may not need one but that you and your business do. Businesses that have plans are more likely to actually be started and to succeed.