If you know me at all, you know I’m a huge proponent of business planning (well, life planning too). I believe that even if you don’t follow or completely implement your plan, that just the process of putting a plan together will teach you more about your business than you could learn from any business course or seminar.
Whenever you make the commitment to launch a new business and you set a date for opening your doors, that’s the time to write a business plan. The perfect time. The only time.
I’ve talked to many people who believe that a business plan is step 2 of starting a new company (step 1 is coming up with the idea). But it’s simply not the case.
There are lots of reasons not to write a business plan.
When You Shouldn’t Write a Business Plan for Your Small Company
Putting a business plan together is more about timing than anything. Now might not be a good time. Don’t work on your business plan now if you:
- Only have a vague idea what business you want to start
- Have absolutely no idea how you’re going to pay for it
- Know you need a lot of money (more than $100k) to launch, but have none of your own capital to invest
- Don’t have an idea of when you want to launch
So, What Should You Do Before Writing a Business Plan?
- Get clear about your idea. “I want to create a new app for tourists” isn’t an idea. What problem did you see that inspired this idea? How does your product uniquely solve it? Write that down.
- Consider your funding options. Yes, you can bootstrap and spend as little as possible. Don’t expect exponential growth if you choose that route. Do you have access to financing? If not, where will you look?
- Save some money. Yes, I started my business with $200. That’s still more than zero. The more of your own money you have saved to fund your new venture, the better off you are, even if you have no idea what you’ll spend that money on right now.
- Consider a launch date. Think about it in the context of the rest of your life. Is now the best time, or is 6 months, or 2 years from now a better time? Set a deadline, even if it’s vague, but whatever timeline you choose, stick to it so you don’t become a victim of endless tire-kicking.
That first one is the most important. You’re not starting a business because you’re sick of your job. That’s the worst possible reason. You’re starting a small business because you see a problem for a select group of people, and your passion for the solution to that problem keeps you up at night.
When you’re there? It’s time to write a business plan. And only then.