To Business Plan or Not to Business Plan, That is the Question!
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Julie Lenzer Kirk and I met recently because we were both finalists in the 2006 Stevie Awards. Julie is super-savvy and smart, and writes for some seriously cool publications, including Working Mother. I was absolutely thrilled she submitted this post on a topic I get asked about once a month!
A Business Plan is intended to answer the question “how will I execute my business concept?†Many people ask “Do I really need to write a business plan?†My stock answer to this question is: you need a plan for your business, but whether you actually write it or not depends on a couple of factors: why you’re writing it and who it is for.
The top reasons people write a business plan are:
- To get money from outside investors, a business plan competition, or even savvy friends and family. This option usually requires the most formal approach to writing a business plan. The key here is to know who your audience is and what they will be most concerned about. For example, an outside investor wants to know when they’ll make their money back and how much they will get back. For competitions, it is important to follow their outlines and requirements.
- To attract employees or high-profile partners. When people go to work at a small company, they are most often doing so because they believe in the owner or the idea. A business plan can help communicate the owner’s vision of the company and show future stakeholders that you are serious and have thought through your idea fully.
- To convince yourself that this business is worth your time. If you are going to put your most precious, valuable and scarcest asset - your time - into a business opportunity, don’t you want to make sure it is the right one? And for those of us who have a significant other, we may also need to convince them we’re serious. Having a business plan shows that you have thought through how the business is going to work and that you are serious about making it successful.
The first two in the list are generally the most often cited reasons by business owners for needing a business plan, leaving #3 as a thought that has never occurred to many. Writing an informal business plan that is not shared with anyone and kept to yourself serves to convince you that you are spending your time (and likely your money) wisely. Even if you go through the process and the business plan never makes it off the white board (like one of mine did!), it is time well spent for the following reason:
The process of research and critical thinking that is required to write a business plan is a good exercise for any business. If you ask (and successfully answer!) the right set of questions, you’ll be better prepared for what lies ahead and more likely to be successful in your endeavor.
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Julie Lenzer Kirk is an award-winning entrepreneur and mother of two. She is the author of “The ParentPreneur Edge: What Parenting Teaches About Building a Successful Business” (Wiley, July 2007) and provides workshops, consulting and keynotes to empower women into entrepreneurship.
: http://skincarerx.com/ 07/02/09 01:14pm
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Sparkplugging Founder Wendy Piersall is dang passionate about helping people start & grow a business while maintaining life balance (somehow). 
Kelly McCausey is an internet marketer, blog publisher, podcaster
and web business coach. Host of 
Bill Parlaman is owner of 
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Love it! I think #3 needs to be done for every business - even the smallest - even if you never need it for #1 or #2. It is good to have at least a general roadmap.
Another awesome Guest, Wendy. Thank you!!
I would be very interested to know about Julie’s opinion on Skeleton Plans and teasers. Because, most of the time you only get a few paragraphs of space to sell the original idea (Guy Kiyosaki Post anyone?)
O also, maybe this is just me, but I think business plans are great to write simply because they help motivate and get you focused on where you want to go. You can have a great idea, but if you don’t know where you want to be a year from now and how you want to get there, then you are at a great disadvantage. Just my 2 cents though!
Btw, Wendy I figured this is implied, but ya, I am totally subsribed to the eMom feed, can we get sandwiches for your birthday celebration by chance?
I would like to know someone’s ideas about how planning fits in with blogging. I especially would like for someone who’s written a business plan for a blog and then successfully launched the blog to write about this.
I also agree that point #3 is essential - especially for internet entrepreneurs who often need to be *very clear* about their intentions before (and during) business building.
Great stuff, Julie!
Jason Clegg
“Mindful Entrepreneur”
In response to Blaine:
Again, what you do depends on why you do it. If you’re looking to use a skeleton business plan as a reference to help you through the thought process, that is probably fine. However, if you’re taking it out to others (investors, business plan competitions, etc.) I do not recommend using someone else’s template. For those audiences, the business plan must tell a story, and that is hard to do if you use someone else’s outline.
As for using teasers, which some people also call an elevator pitch - this is absolutely required. Everyone should be able to describe their business in 30 seconds, which works out to about 3 sentences at most.
My Example: I provide workshops, consulting, and keynotes that give entrepreneurial businesses and individuals a “Boot in the Butt(TM)” to launch their ideas, grow their business, find balance in their lives and improve their leadership skills.
Go to my website at http://www.JulieLenzerKirk.com and sign up for my monthly “Boot in the Butt” newsletter!
In my opinion, there are four important questions that need answers in your business. They are: Who am I? What do I do? Who do I do it for? How do I do what I do? A business plan needs to answer these four core questions.
Great post! I just put together an outline for writing a business plan and it might interest some of you who believe they are valuable. I also recommend using Palo Alto business plan software program, it is super for beginners or experienced.
Here is the link for a business plan outline:
http://startupprincess.com/wordpress/writing-a-business-plan/
Just happened to drop by as I was looking for resources for business plans and your site has been very helpful indeed
I think it is important to have a business plan, even a broad outline will be very helpful since it will serve as you game plan in knowing where you want your business to go.