Why written business plans matter CNN Money

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EMAIL PRINT DIGG RSS Subscribe to Top Stories feed rss.cnn.com rss money topstories.rss Paste this link into your favorite RSS desktop reader See all CNNMon! ey.com RSS FEEDS close By Fahmida Y. Rashid February AM EST sponsored by Ask FSB Get small business intelligence from the experts. Here s a chance for YOU to ask your pressing small business questions and FSB editors will help you get answers from the appropriate experts. Your name Your e mail address Your city Your state Select Outside U.S. Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Dist. of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Your questions Previous Q As include virtual .element ssi sections questionsforfsb archive . archive headlines.html More from FSB Oscar turn boosts sales ! Toy Fair breakout hits A little visit to Salt Lake City Current Issue FORTUNE Small Business Dear FSB Most entrepreneurial heroes started their business ventures without a business plan to see how viable their ventures would be. The current approach taught in MBA classes is to produce a viable business plan before undertaking a business venture. How relevant is the business plan these days Nhlanhla Damoyi Johannesburg South Africa Dear Nhlanhla Very relevant For every hero succeeding without a plan there are scores more who watched their business lurch from one crisis to another. You need to put more time upfront into planning as you won t have much time on the back end says Sean Wise a venture capitalist with Wise Mentor Capital a Canadian boutique advisory firm. If you are looking for outside funding from a venture capitalist a bank a government or nonprofit agency or an individual the investor will want to see what you want to do with your business idea and whether you have really thought it through. Investors care about all components of y! our business from delivery methods to legal restrictions or requirements to cash flow and taxes. So if you are not looking for capital then you don t need a business plan right Not quite. The business plan is a blueprint It provides direction and guidelines for the business. All the things the investor wants to know about you should think about too. Isn t your time energy and money as valuable as the investor s asks Wise. Why would planning be needed for them and not for you The business plan is helpful for supporting a loan application estimating what the company s worth defining business goals developing processes to reach milestones and evaluating ongoing programs for success. Plans show business owners if they are succeeding or failing. A business plan that will get you a loan Even if you don t write a formal plan taking the time to sit down and figure out what you will be doing is critical. You need to know if there s a market for your products or services and you need! to know what the startup costs and breakeven points should be. You also need to set realistic expectations regarding the financial potential of your idea. The business plan means more than just the pieces of paper and financial forecasts. It includes all the thinking that goes behind it says Wise. Okay say you ve had a business up and running without a plan for this long. Why bother doing it now All the things mentioned above still apply. The business plan will help identify any problem spots. Perhaps there are some problems keeping track of cash flow. Perhaps you need to outline a more effective marketing campaign. Perhaps you are expanding or branching out in to new areas and need a course of action. Just because you ve done fine so far doesn t mean a map can t be helpful for the rest of the trip. An easy way to get started is to use software packages like Business Plan Pro from PaloAlto Software that ask questions and completes a document. Banks and organizations helping out small businesses can also be helpful resources. However while sof! tware and consultants can be used to refine ideas and to ensure all key questions have been covered it is up to the business owner to make all the decisions. Writing a plan won t make the hurdles go away says Wise. But at least you will see them coming. Did you find a business plan beneficial to your business Tell us why or why not . Getting your business off the ground Help I need startup capital. More Small Business Google invests in India The Hot List The th president s trillion headache Ultimate family car picks k s Why they re no tax trap Top Stories Dancing with OPEC th president s trillion headache Stocks rally back on Ambac Bank chiefs pay gets the spotlight FDA approves Genentech s Avastin Photo Galleries Toy Fair breakout hits A look at small companies with a big presence at this week s Toy Fair extravaganza. more Stocks we love big dividends Sometimes it just feels good to get a little something back. 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Source: http://money.cnn.com/rssclick/2008/02/21/smbusiness/business_plan.fsb/index.htm?section=money_latest


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