Should I write a business plan if revenues will no be in the thousands?
I am a start-up business baking pastries and cakes in my home. I have seen sample business plans and my business does not have a projected revenue yet. I am told by others write a business plan. All of the plans I have seen have large financial projections.
User Comments
- You will need a business plan if you will use it to:
- Support a loan application
- Raise equity funding
- Define objectives and describe programs to achieve those objectives
- Create a regular business review and course correction process
- Define a new business
- Define agreements between partners
- Set a value on a business for sale or legal purposes
- Evaluate a new product line, promotion, or expansion
You will get a lot of advice that a business plan is needed.
However, what you need is the process that a business plan entails -- that is, the process of thinking through the business.
It will help if you follow the outline of a business plan -- e.g. defining your business, determining your unique selling proposition, identifying your target market, determining how you will market the business, knowing how much you need to launch the business successfully.
If you will not use it to apply for a loan or find an investor, you need not write your business plan.
There was an article from the Wall Street Journal that questioned whether a startup really needs to write a business plan and this is one of the studies they found http://startup.wsj.com/columnists/enterp...
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A study recently released by Babson College analyzed 116 businesses started by alumni who graduated between 1985 and 2003. Comparing success measures such as annual revenue, employee numbers and net income, the study found no statistical difference in success between those businesses started with formal written plans and those without them. The study concludes that "unless you need to raise external start-up capital from institutional sources or business angels, you do not need to write a formal business plan."
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You don't need a written formal business plan to succeed. However, you need to understand your business and know how to navigate the market in order to succeed
- if your looking to get a loan from the bank then you definately need to forecast realistic revenues based on what you have been selling so far(if you already have started selling), if not do some reasearch into similar businesses in similar areas to get a forecast
one of the main purposes of writing a business plan is to get a loan, and a bank would get u out of their door as soon as they didnt see any forecasts for sales, profits etc
if your not looking for any sort of loan, you should still write one as it would help with setting yourself short, medium and longt-term goals which is beneficial for yourself to see whether or not your suceeding and going to make any money in the long term and to see if running your business is worthwile