Some entrepreneurs find themselves in the enviable position of not needing any outside funding for their business. This might be because they have the capital themselves, because their business will require very little capital, or because they are already bringing in revenues. If you are one of these entrepreneurs who is not seeking funding, do you still need a business plan?
The short answer: Absolutely.
While one of the primary purposes of a business plan is to present an idea and a strategy for its execution to investors or lenders, this is certainly not its only purpose. Landlord and franchisor requirements are just two of the countless situations that might require a fully developed plan for your business. Even if not required by an outside source, a business plan can be a wonderful strategic tool.
The process of developing a business plan will help you hash out all of the details of your venture, as it forces you to set aside assumptions and to detail processes that might be second nature to you. In fact, in our meetings, clients often change certain aspects of their plans after they have talked for a while and realized that the puzzle pieces don’t fit together in quite the way they thought.
Whether your business is still just a dream or you have been in operation for years, the exercise of creating a plan is equally useful. In fact, regularly updating a business plan is an excellent way to ensure that your business is staying on track to meet its goals. You might even discover that your customers are not from the market you are targeting or that there are areas where you can significantly reduce expenses.
Another reason for developing a business plan is to “try out” a new business with no risk and very little investment. If you are still toying around with an idea for a new product or company and are not even sure if your idea is feasible, trying the business on paper first is an excellent idea. You will save yourself a lot of time, money, and heartache if your plan is not feasible as-is. Or, you might realize that there is even more potential that you thought and be inspired to go for it.