Why Do I Have to Write a Business Plan?

One of the reasons for me writing this article is to bring to light that it is neccesary to prepare. Starting a new business is in some ways like applying for a job. If you don't have a wrtten resume, more than likely you will not even get an interview. Without a business plan, you more than likely will not even get a meeting with a potential funding source. I am also writing this because it is a difficult document to write and frustrates many people. In future articles I am going to break down the seven sections of a business plan and where the best places are to find supporting information to write those sections but first, let me explain the "methodology" behind it.

There are three main reasons you would write a business plan. The most important reason is to see if the business is actually going to work!!! May seem silly but many of us lie awake at night and ponder how we can get away from the job we have, make more money or do something that we actually want to do everyday and still support ourselves and our families. I like most of you at first looked at doing a business plan as more like a task that I am not going to enjoy doing other than what the purpose of it actually is. We all have great ideas but sometimes, it just won't make money. This could happen for many reasons ranging from lack of interest in a product or the start up capital that is needed to do so will not bear fruit as you originally thought that it would.

The second reason is that it makes you think about your business and actually what is involved in performing that business correctly. Many of us always say after the fact "I wish I would have thought of that earlier" or "I wish I would of wrote that down." Sad but true but everyone does this. By doing a business plan, you ensure that for the most part you are going to look at every facet of your business idea from the cash-flow that you project you can make to actually knowing who your selling to and how to use your advertising dollars correctly.

Lastly your business plan will be used to take to potential funding sources ranging from banks and investors to government offices that offer incentives in many areas for your business to succeed. The government wants to create and retain jobs, rehabilitate economically depressed areas and also train the existing workforce to name a few. Without a business plan, none of the above will transpire potentially.

Planning is the key. If you have not thought something through, chances are that you have not looked at all the angles and your business idea, as great as it is, will more than likely fail unless you have done so. Don't let this be a daunting task. Look at it as being fun, exciting and your first step to successfully running a business!!