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:
- Grow your existing business.
- Back up a business loan application.
- Seek investment for a business, whether it’s a startup or not.
- Create a new business.
- Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues.
- Sell your business.
- Deal with professionals.
- Develop new business alliances.
- Share and explain business objectives with your management team, employees and new hires.
- Decide whether you need new assets, how many, and whether to buy or lease them.
- Hire new people.
- Decide whether or not to rent new space.
- Deal with displacement.
- Share your strategy, priorities and specific action points with your spouse, partner or significant other.
- 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.