2019 may be your year to take your business to the next level. Swinging big might involve a formal business plan.
The short answer to the headline question is yes. The longer answer is more complex, because there are all sorts of “business plans,” depending upon the goals of the entrepreneur.
In the Beginning…
You had an idea. And you decided to turn that idea into a business. To do that, you obviously had to develop some kind of a plan to move forward. It may have been very informal.
- You thought about how you would produce the product or service you wanted to sell.
- You thought about how you would get that product/service to market – maybe develop an MVP, a website, a social media presence, paid advertising etc.
- You determined pricing that would result in a profit
- You may have developed a preliminary budget plan too – how much you were going to have to sink into this endeavor and where you might find the cash to do it, if you did not have the resources all on your own.
The point was this: develop your idea into a product for sale, design a plan to let the public know you had this product, throw in the money you needed to get going, and then get to marketing it.
This is a plan, but it is not a formal business plan. But take heart. If this is all that you have done in terms of business planning, you are not alone. Many highly successful entrepreneurs began this way (e.g. Nathan Chan of Foundr magazine) and grew a huge business in a short period of time.
When the Formal Plan Becomes Necessary
So, your business is off the ground. You are ready to scale. But to accomplish this, you are going to need funding from some outside sources. Here are your options:
- Family and friends. In this case, you will not need to develop a formal business plan. You can simply show them what you have done so far, how you have at least broken even, and explain what you want to do now to scale.
- Angel investors, traditional loans (e.g., banks), or perhaps crowdfunding. In this case, a more formal plan would probably be a good idea. Most of these sources don’t want to hear an informal summary of your ideas for growth. After all, it’s not like the TV show “Shark Tank.” They want to see some hard figures, how you intend to “beat” the competition, and how much of a market there really is for the product or service you are offering. And they want to see it in writing. These things will mean the development of a formal plan.
Developing that Formal Business Plan
Yes, it’s a pain in the rear to do this. Fortunately, if you have never written a formal business plan, there is lots of help out there.
- There are a number of templates you can use to design and develop your formal business plan. These are built on what traditional lenders will want to see, so you really can’t go wrong if you write well and have the details they will want.
- There is any number of online writing services, like Wow Grade, that has business writing departments, including pros who have wide experience writing business plans. You can submit all of the detailed information and get a finished product pretty quickly.
- You can look to a freelance consultant to write up your plan. They can be found on any number of freelancer sites, such as Upwork or Freelancer.com.
The Bottom Line
You had that idea. You turned it into a business. And you developed a plan for that business from the beginning – a plan that has pretty much worked for you up to this point, albeit an informal one.
But it may now be time to develop that more formal plan, if you intend to seek outside funding that will allow your business to scale and take its place in a competitive market place. It may be time to “bite the bullet,” craft that more formal plan (or get someone who can), and get the resources you need to move forward.
Lori Jones holds an MBA in business and has served as a business consultant to many startups. When not consulting, she is a frequent contributor to blogs on the subject of entrepreneurship or found in his amazing kitchen, cooking up gourmet dishes for friends and family.