Do You Really Need a Business Plan?

Many individuals start out in business purely out of passion for their product or service. Dealing with many small business owners, it is very clear that many start out in business with a really strong "why", however no clear goal on how they’re going to get there.

Most that fall into this category have done a reasonable enough job of getting their business to a good, but not amazing position without a business plan. So, then the question begs, do you really need a business plan? Is it really worth the investment, the time, and the resources? Is it possible to continue on and skip the whole “planning” process?

From an objective stand point, it seems much easier to wing it… However, the old saying “sticking your head in the sand” rings quite loudly when skipping the planning process occurs. Studies have shown that planning improves business performance (1).

However, here is everything you need to know to make up your own mind:

1. GROW 30 PERCENT FASTER

Keep in mind that creating a business plan isn’t about producing a long-winded document that predicts the future of your business. The process of actually writing the plan is what is truly important. Writing your plan, and reviewing it regularly gives you a much better window into what you need to do to achieve your specific goals and be successful.

In the spirit of simplicity, having a plan allows you to work towards specific goals that you set in your business plan. As the old saying goes, “If you fail to plan, you’re planning to fail”. Having a plan also allows you to make changes to your business as you learn more about your customers.

By all means, don’t take my word for it. Studies show that companies that plan (2) and review their performance and adherence to their plan really DO grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to join the horrendous statistics of businesses that fail.

2. HAVE CONFIDENCE AROUND “BIG SPENDING”