If you were to ask me what question I get asked most often by people who are looking to start their own business it would undoubtedly be; “Do I really need a business plan?” My response is simple, if you want to succeed, yes, you do need a business plan. Just like you wouldn’t build a house without plans or bake a cake without a recipe, you need to have plan for what your new venture will look like and how it will be funded.
With all of that being said, there are no hard and fast rules of what a business plan has to be or what it has to look like. We have several guides at the Lake Superior Partnership Office and one of our business development representatives would be happy to sit down with you and go through them and find one that suits your personal style. There are several things that a business plan needs to have:
- An overview of your company
- How you plan to structure it (a sole proprietor, LLC, Incorporation?)
- Financials and Projections
- Market Analysis
- Industry Analysis
- Human Resources Plan
- Marketing and Sales Strategy
- Management Plan
- Exit Strategy
Most people take a look at that list and are turned off by it. What does it mean? Where am I supposed to get this stuff from? Believe it or not, most of it you already know. You know what you want your company to be, how you want it to run, what your financial situation is and what the day to day operations are going to look like. Getting those out of your head and down on paper is an enormous first step. From there, experts at the LSCP or SBDC can help you with the research and financial projections and the final packaging if you need to submit your business plan to a lender for financing.
Having a business plan and financial projections prepared for a lender is one reason that it is necessary to create one, but you may think that if you’re self-financing you can skip the process all together. I don’t recommend it. One of the most beneficial part of the planning process is that it help you work out the kinks in your plan and refine your ideas and budget. In some cases after going through the planning process, people find that their business won’t be profitable and decide not to move forward, other times, they refine their ideas, sometimes the plan is just a confirmation of what they already knew and no adjustments need to be made (this is extremely rare).
Owning your own business will be one of the most difficult and rewarding things that you will ever do, don’t shortchange yourself at the beginning by neglecting to prepare a plan.
Authored by: Amy Clickner, CEcD, CFRM, the CEO of Lake Superior Community Partnership. Amy is the Vice President of the Michigan Economic Developers Association.