Neal Kaplan I'm a director of technical communications working for a data analysis startup in Redwood City. I started as a technical writer, and since then I've also been learning about information architecture, training, content strategy, and even something about customer support. I'm also passionate about cross-team collaboration and user communities.

Is it worth writing a business plan?

3 min read

Writing a well thought-out and organized business plan increases your odds of succeeding as anentrepreneur. If your business has a chance of making a good profit, you need a good business plan.

Is completing a business plan a good idea?

Your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals, and more important, their place in helping you achieve those goals.

When should you not write a business plan?

  • A new venture is not the end.
  • Don’t start by committing more than you can afford to lose.
  • Pick a domain that you have experience in.
  • Prepare appropriate plans and carry out reality checks.
  • A real test is the only one reliable.
  • Get going and build on it.

If you are one of the new generation of entrepreneurs who don’t like the thought of a business plan as a first step in starting a business, you will love this message. Professionals agree that a better strategy is to explore and fine tune your assumptions before declaring a specific plan with financial projections based on your dream and passion.

You can save yourself a lot of money and re-work if you decide that your dream needs more time to mature before you commit your limited resources. Simon Bridge and Cecilia Hegarty wrote a book called Beyond the Business Plan which outlines tradeoffs and recommends ten principles for every new venture explorer. Here is my edited summary of their ten principles, which might convince you that you don’t need a business plan at all, or at the very least, will help you write a better one later: A new enterprise should be pursued primarily to help you achieve your goals.

New ventures are usually exploratory and risky, so don’t let any business plan process convince you to commit more than you can risk as a person, if your exploration fails. Start with an effectual approach, which evaluates risk tolerance, and suggests a more affordable means to an end.

Don’t handicap yourself by starting something that you don’t know much about. A business plan won’t save you if you pick random ideas or copy others because the story sounds attractive. Getting started creates a sense of accomplishment, which can carry your startup through many obstacles.

If you don’t have the relevant skills or knowledge, take time to build them or find someone to partner with.

What are the 3 reasons for writing a business plan?

What are the 3 main purposes of a business plan? The most important purposes of a business plan are 1) to create an effective strategy for growth, 2) to determine your future financial needs, and 3) to attract investors.

What are the disadvantages of a business plan?

  • A business plan can go wrong.
  • Too little time can be spent on analysis.
  • A lack of accountability is a problem.
  • Great implementation practices are required for a great business plan.
  • It restricts the freedom you once had.
  • False certainty is created by it.

There is a chance that you will need to create a business plan in order to find success if you want funding or growth to be sustainable. Understanding what your business is about and how it will perform will allow you to see how each result will affect your bottom line.

No matter what happens over the course of the day, you will be prepared to act. You can make changes to your journey if you can see what your financial future is going to be.

If you want to get a line of credit from a financial institution, you have to present them with your business plan. The plan gives the financial institution a chance to see how organized you are so they can better gauge your lending risks. If you don’t have a formal business plan, most institutions won’t give you an appointment to discuss financing. People with differing opinions tend to go rogue and do their own thing if there is no structure involved with the business.

By making sure that everyone is on the same page with a business plan, you can give your company a greater chance of success. You need to identify who your core prospects are in order to sell online or in the service industry.

Without plans in place that allow you to identify these people, you are just guessing at who will want to do business with you, and that is about as reliable as throwing darts at a dartboard while blindfolded. A broad range of opinions and input is usually necessary for the best possible business plan because otherwise the blind spots of inaccuracy can lead to many unintended consequences. “Paralysis by analysis” is an expression you may have heard. The struggle that many have in the creation of a business plan is described in it.

Many businesses create a plan that just sits on a shelf or on a drive because it was made for funding. The average plan creates an environment where the executives of the company dictate the goals and mission of everyone. The people who are on the front lines are often not given the chance to influence the implementation of the business plan which ultimately puts a company at a disadvantage. It can cause a business to miss out on an exciting new opportunity because they are tunnel-visioned on what to do to meet a specific goal.

Even with all of the best research, the best workers, and a comprehensive business plan, failure is more likely to happen than success. The goal of a business plan is to analyze the present so a best guess at future results can be obtained.

What are the disadvantages of not using a business plan?

You’re stuck because you don’t have a road map and you don’t know what to do with it. It shows that you are not good at planning or in a position to document it.

What are the advantages of business plan?

A business plan gives structure and defines objectives. It becomes a reference to keep the business on track. It can be used to measure and manage your priority areas.

Neal Kaplan I'm a director of technical communications working for a data analysis startup in Redwood City. I started as a technical writer, and since then I've also been learning about information architecture, training, content strategy, and even something about customer support. I'm also passionate about cross-team collaboration and user communities.

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