Browsing and searching last night, I discovered “Why You Need a Business Plan” by Colleen DeBaise on the Wall Street Journal’s website. This is a good, strong post and a good reminder. Her five reasons:
- Identify your company’s strengths and weaknesses.
- Figure out how much money you’ll need.
- Get clear direction, which can help eliminate stress.
- Summarize for lenders, investors or partners.
- Evaluate the market for your product or service and size up the competition.
My personal favorite is No. 3, particularly the phrase “help eliminate stress.” It’s not as if the business plan eliminates uncertainty, but business planning does manage and reduce uncertainty by laying things out where you can see them more easily (like cash flow, for example). The interrelationships between the different parts of the business are not all intuitive.
Point No. 4–summarize for lenders, etc.–bothers me. Too many people miss the benefits of business planning because they don’t need to show anything to anybody else. If that’s your case, look at points 1, 2, 3 and 5.
That link is “Why You Need a Business Plan”–WSJ.com