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Business Plans

November 6, 2005

Q- I want to start a business, but the prospect of writing a business plan is overwhelming to me. Do I really need one?

Yes, you need a business plan. A business plan is like a roadmap in that it tells you where you need to go. It is hard to get to a destination if you do not have a path to follow.

Writing a business plan is not the most enjoyable thing you can do. The times I have written one, I knew I needed to do it, but it was not a joyful experience (better than a root canal). I seem to have the most success writing business plans when I dechunk the project. That is, I write only one section of the plan at a time and then I move on to something else. While I never met anyone who said writing a business plan was a grand experience, it is something you have to do. You can do it!!

We have a great sample business plan on JMI's web site www.cob.fsu.edu/jmi and I have written a great book (admittedly biased) entitled So You Need to Write a Business Plan. You can order it on Amazon. com to help you through drafting a plan.

The reason you need to write a plan is to insure that you think through all the elements in the business, from marketing to accounting. Writing a business plan allows you to see any weaknesses in your strategy and to figure out ways to deal with them. While I have not always been happy to do the actual writing of the plan, I have been grateful for the experience because it forced me to make sure I accounted for everything.

The purpose of your business plan should not necessarily be to raise money, but to develop a strategy to grow and nurture your business. Understanding the steps it will take to get the business started is worth the effort and energy to write the plan.

Without question, the most important part of the business plan is the management team. At a venture capital conference I once attended, four venture capitalists on a panel were quizzed by entrepreneurs. One entrepreneur asked each venture capitalist to tell the three most important things they look at when evaluating a business plan. They all said, “Management team, management team and management team.” The management team is like a jockey in a horse race. It is the jockey’s job to guide the horse to victory and it is the management team’s job to guide the business to success.

Now go out and write a great business plan!