In this edited excerpt, the authors offer five reasons why someone would want to write a business plan and what they'll use it for. Anybody beginning or extending a venture that will consume significant resources of money, energy or time and that's expected to return a profit should take the time to draft some kind of business plan. The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many great companies had their starts in the form of a plan that was used to convince investors to put up the capital necessary to get them under way. Many business plans are written by and for companies that are long past the startup stage but also well short of large-corporation status.
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However, this does not mean that I like the process of planning. For example, I want to want to meal plan; but I just cannot talk myself into sitting down to do the planning. But let me tell you what I do like about planning: the outcomes. Building a business or meal plan helps one move forward with control, strategy, and intention. I am not telling you to not do. In fact, you should be doing and planning at the same time; the two are intertwined and iterative. You allow others to dictate with their dollars what your business is selling and where it goes.
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Entrepreneurs who are starting a new business often wonder, "Do I really need a business plan? Is writing a business plan really the best use of my time? In reality, business plans can take a long time to write, require that you have a tremendous amount of data at your fingertips, depend in part on projections and often are responsible for creating a long list of research you still need to conduct and other work you need to complete.
Why write a business plan? Simple: The business plan is the blueprint for your business. If you wanted to build a house, you wouldn't walk over to an empty lot and just start nailing boards together. Starting a business without a business plan is just as risky. Yet, unlike a house, a business isn't static.