SCORE: How important is a written business plan?

Q: A recent article published in Entrepreneur Magazine characterizes the necessity of a written business plan as a myth. How would you respond to this statement?

A: While it is true that many business plan outlines go over the top with detail that is both unnecessary and redundant, it does not diminish the value of the thought process required to develop and make right decisions for the success of your business venture.

The business plan is of particular value to the start up business or the "wannabe" entrepreneur who is in the initial thinking stage. Some of the key components include:

Executive Summary & Company Overview: The major points of your business plan and your mission, vision, values, products, and unique characteristics.

Market Analysis: Of your industry, your marketplace, your customers, your competition, and how you intend to compete.

Company strategy: Your step by step strategy for growth in the formative years, including how you will market and differentiate yourself from your competition. your growth and marketing plans for years three and beyond.

Financial review: The current state of your finances, including your income statement, balance sheet, start up expenses, cash flow statement and profit projections. If more capital is needed, make a clear case why and how the money will be spent.

Action plan: Steps you'll take to implement your business plan to meet your goals and objectives.

In addition to providing a road map for you to follow, the business plan is a critical element in obtaining a loan from a commercial bank and a requirement for a SBA backed loan guarantee. The plan does not need to be more than ten (10) pages, including the various financial statements and projections outlined above.

While it is advisable to consult with an attorney, accountant and SCORE business consultant, the business plan must, ultimately, reflect YOUR vision for YOUR business. The hours devoted to developing a workable business plan will be time well spent.

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