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. Plus, not everyone is sold on the usefulness of a business plan. Consider the study of new businesses conducted by Babson College.
When Should Entrepreneurs Write Their Business Plans?
How Long Does It Take to Start a Business?
Planning a business means planning to succeed in business. A business plan helps you define what you do so that you can explain this clearly and succinctly to customers. It helps you see if your plans are going astray so that you can take corrective action. It helps you think about your position in your market and how to be competitive. We advocate for a simple plan that helps you towards your goals and keeps you on track without getting you bogged down forever in writing that plan. Some very good reasons to have a business plan include:.
More than 80 percent of start-ups that fail do so because they don't have enough money coming in to pay their bills. Becoming profitable is important for you and for everyone who's invested in your company. It's hard to predict the average time for a new business to make a profit, but standard advice is that you should prepare to run three years before you reach that point. Different businesses face different challenges. A home business or an online company has fewer fixed expenses than a new manufacturer, so it's easier to become profitable sooner.
However, when measuring business plan size and length, you should never be oriented by the page number it had, because it really may not provide a lot of information. For example, if we have a business plan with 15 pages that has absolutely no images, no graphics, this business plan might still be a lot more detailed oriented than a 30 page business plan filled up with irrelevant images and graphics attempting to illustrate what it does not explain. The business plan size may or may not be as important as you think. Your business plan should include all of the elements that are needed to explain what your business is about.