Is A Business Plan Really Necessary?

[Marykate]

I know a few people who scoff at business plans because invariably what happens in real life does not match the plan and the plan just becomes something to look at wistfully as a waste of time. Is this true? Or, is a business plan just something that they teach in college that doesn't have much real world application.

[JustinMarch]

Working out your costs, how you intend to market the business etc. is really pretty essential as all businesses cost money and who wants to waste that... no one who should be running a business that's for sure.

The point is that you should adjust your plan as you launch the business. A good plan will start with a consideration of the desired end result and help you to get to that results.

[ArcSine]

BPs are very real-world necessary. Regardless of how closely the actual results end up dovetailing with the initial BP forecasts, it's the preparation of the BP that forces the biz owner--when it's done thoughtfully and diligently--to give a hard look and critical analysis to those questions that must be answered before launching the venture.

Besides that, no banker, lender, or investor will sink a wooden peso into a startup without first seeing in black-and-white that the entrepreneur has already given careful consideration to all the important aspects--e.g., competition, cash flow, growth projections, market and industry outlook, capital needs, etc.--and who has already foreseen and addressed the likely challenges the new biz might face.

The value of a BP doesn't come from its degree of accuracy in reading the tea leaves. The value is in the structured discipline its preparation imposes in making the biz owner aware of all the questions and hurdles that must be considered--and answered--before the launch.

[eGlobeRC]

Exactly right. A business plan is a must. Echoing ArcSine, the process and experience of creating the business plan are of the highest value to any entrepreneur in any business. A business plan is a WORKING document, not something you create and then your done.

[BWelford]

If you have the funds to give you time to write the business plan and to survive before starting up the business, then that is a fine way of doing it. Most people don't.

For them, I think it is essential to handle some important elements and get them right. I've labelled it the NUB. That is
Niche - make sure you're targeting a niche that will work for you
USP - (Unique Selling Proposition) - make sure you're offering something that your Niche really wants and they can only get from you.
B for bottom line or cash flow projection.

Having done that, you should then get moving rapidly and learn how to improve it through results. I have an e-book coming out very shortly, Marketing Right Now, that covers this.

Once your business is running, you can certainly be working on your business plan in parallel if you wish. It's a useful check list to make sure you have not forgotten anything.

[zmonique2007]

Business plan is necessary for me. Its just like in school, we use guidebooks so we know what topic or lesson are we going to discuss the next day. Same with business plan,it will serve as your guideline.