Many Florida A&M University students use their time on “The Hill” to not only earn a degree, but to hone business ideas. The business plan is the blueprint for any business.
“You wouldn’t walk over to an empty lot and just start nailing boards together if you wanted to build a house. Starting a business without a business plan is just as foolish,” said Robert Sweeney, a 24-year-old engineering student from Tampa who has just started a plan for an idea that he had been “procrastinating on for years.”
Yet unlike a house, a business isn’t static. The business plan for any business will change over time as the business develops, and any particular business may have multiple business plans as its objectives change.
“There are several good reasons why you should write a business plan,” said Ken Smith, owner of Condomology Superstore.
“Writing a business plan is the best way to test whether or not an idea for starting a business is feasible, other than going out and doing it,” continued Smith.
In this sense, the business plan is a safety net; writing a business plan can save a great deal of time and money if working through the business plan reveals that the business idea is unsound.
A business plan will ensure that attention is paid to both the broad operational and financial objectives of your new business and the details, such as budgeting and market planning.
Taking the time to work through the process of writing a business plan will make for a smoother startup period and fewer unforeseen problems as your business becomes established.
Undeniably, the need for both operating and startup capital will arise. “Plainly put, there is no hope of getting any money from established financial institutions, such as banks, without a well developed business plan,” said Sandya Cleff, a loan officer at Wachovia Bank in East Orange, New Jersey.
Established businesses often need money, too, to do things such as buy new equipment or property, or because of market downturns.
Having a business plan gives a much better chance of getting needed money to keep operating or to expand.
A business plan is essential to starting a business, but it’s also an important tool for established businesses.
Viable businesses are dynamic; they change.
“The company’s original business plan needs to be revised as new goals are set,” Smith said.
Reviewing the business plan can also help you see what goals have been accomplished, what changes need to be made, or what new directions your company’s growth should take.
Whether shopping your business to venture capitalists, or attracting angel investors, a solid business plan is imperative.
A presentation may pique their interest, but they’ll need a well-written document they can take away and study before they’ll be prepared to make any investment commitment.
You should be prepared to have the plan scrutinized; both venture capitalists and angel investors will want to conduct extensive background checks and competitive analysis to be certain that what’s written in the business plan is indeed the case.
Writing a business plan is time-consuming, but it’s essential if you want to have a successful business that’s going to survive the startup phase.
If your business doesn’t have one, maybe it’s time to start working on one.
The process of writing a business plan can do wonders to clarify where you’ve been and where you’re going.
Contact Susan J. Ward at email@example.com