13. do you need a business plan?

A business plan outlines a company’s operational and financial objectives for the near future (usually one to three years) and shows how they will be achieved. Preparing a business plan will help you clarify your business idea, identify potential problems, set out your goals and measure your progress, and it will need to be updated on a regular basis as conditions change.

If you need to attract investors or acquire a bank loan then your business plan will also need to provide plausible financial forecasts including a balance sheet, profit and loss statement and cashflow forecast to demonstrate how the financing being sought will affect your financial position.

One page business plan

There are many web pages devoted to business planning and some are more detailed than others. Small business start-ups may just need a concise plan along with financial forecasts, as described in BPlan’s ‘How to Write a One-Page Business Plan’, ‘How to Write a Business Plan in Under an Hour’ and ‘The Key Elements of a Financial Plan’. Concerning the financial plan, even if you decide to use an accounting firm for your bookkeeping and financial reports, you need to be able to read and understand them so that you can make decisions based on what you learn from them.

More detailed business plan

For more complex businesses and those requiring start-up funding, a more detailed plan will be needed.Startup Donut offers some excellent guidance and also signposts how to find advice and help with writing business plans and financial forecasting. BPlans offers a more detailed description of business planning, along with a free business plan template.