People often want to know if they really need to draft a business plan. The answer is yes. Creating a business plan is an important exercise for new and established business alike.
And yes, I know you are not looking forward to it. I have written three business plans over the years and I know that writing one is time consuming, a lot of work, and a sometimes frustrating process.
The first two times I did it, I drafted the plans from scratch, using models that I had read in books. They were fine business plans, not great by any means, but serviceable. Certainly the process of writing the business plan was very valuable. Doing so lets you think through the venture carefully, helping you to avoid problems before you encounter them.
My third business plan was easily the best, and the process was the most enjoyable of the three. A main reason is that I wised up and decided to use some software. I researched carefully, spoke with readers and other business experts, and in the end discovered that the very best business planning software happens to come from Oregon. Palo Alto Software in Eugene makes a great product called Business Plan Pro. In fact, in my book The Small Business Bible, the business plan in the appendix is one generated by Business Plan Pro.
Can you start a business and succeed without a business plan? Yes, people do it every day. But the odds of success are higher if you do in fact draft and review your business plan. Just as a pilot needs a flight plan so as to know how he plans on getting from Portland to New York, so too does the entrepreneur need a game plan for how he is going to get from Point A to Point Z. That’s the real purpose of a business plan — it’s for you, no one else.
Sure, banks will want to see it, as will venture capitalists (though don’t expect them to really read much more than the executive summary), but the real juice comes when you figure out what your business will be.
That’s where a piece of software like Business Plan Pro comes in. It will easily and helpfully walk you through the process. If you need a business plan, I say check it out. You will be happy you did.
Steve Strauss is the small business columnist for Oregon Business.