Consultant’s Corner: 15 Reasons to Write a Business Plan

Question: I have been in business for a year. Is it worth my while to prepare a business plan since I am not borrowing money?

The two basic purposes of a business plan are to raise funding and effectively plan new business ventures. Below is a list of 15 common reasons, including the first two already mentioned, that small business owners might write a business plan:

1. Grow your existing business.
2. Back up a business loan application.
3. Seek investment for a business, whether it’s a startup or not.
4. Create a new business.
5. Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues.
6. Sell your business.
7. Deal with professionals.
8. Develop new business alliances.
9. Share and explain business objectives with your management team, employees and new hires.
10. Decide whether you need new assets, how many, and whether to buy or lease them.
11. Hire new people.
12. Decide whether or not to rent new space.
13. Deal with displacement.
14. Share your strategy, priorities and specific action points with your spouse, partner or significant other.
15. Set specific objectives for managers.

So, for at least most small businesses, when the question is “Do I need to write a business plan?” the answer is almost always yes.

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