It’s time to write a business plan. Why? Equate a good business plan with a good house plan. Building a house without a plan means catastrophe and probably a hodgepodge of rooms. With little or no planning, costs skyrocket because no one plans economically placing the utilities or even laying the appropriate foundation for the expected dream house.

Strong Foundations

A business plan represents the foundation of your business. If the foundation fails, the business can’t survive. The foundation must be strong and able to withstand bad times along with good. A business plan forces consideration of where the business starts as a going concern and how it grows over time. It incorporates your eventual hopes for your business with realistic plans for today’s budget. It makes good use of money, carefully ensuring that the money available stretches as far as possible. Your business plan lays out the exact business you start, the products and service offered, the costs and expenses associated with those products and services and a realistic look at potential profit. Remember, define your markets – those currently buying, potential buyers and how you plan to attract both.

If you finance your business start-up, those helping you with financing expect a detailed business plan incorporating a section showing judicial use of their capital. The plan shows investors that you seriously researched your market and your projected profit depends on realistic sales and costs.

Next, we discuss actually writing the business plan.