When Should You Write A Business Plan

When Should You Write A Business Plan-17
The key to business success is having a clear vision of what you want to accomplish as a company, experts say.

Government agencies in the position to approve or deny important permits or zoning might require a business plan for their review.

But as long as the business doesn't involve anyone else's money or approval, you can avoid a formal plan.

According to a November 2010 article in Business Insider magazine, "business plans are the leading cause of startup death." Conventional small business startups' business models are very much academic until they first get put to the test with customers or clients.

Most entrepreneurs have to experiment with different products and services before nailing down a model that works.

However, if you are able to self-fund your business and you want to keep things flexible and fluid, you have no obligation to create a business plan.

As your business succeeds and grows, however, you eventually might need a business plan.

Banks, investors and financiers like business plans.

Before they put their money on the line, they want to know as much as possible about what you'll do with it and the likelihood of success.

Businesses experiment through trial and error, so a business plan might just be an impediment to success. Industries and companies which need particularly long setup times -- particularly those needing significant technology or capital to really launch -- might face changing market conditions in the meantime.

Good organization and a detailed business plan might be the enemy to a business which requires significant development time. 1, 2010 article in "Business Insider" magazine provides an example of how satellite technology pioneer Iridium filed for bankruptcy only nine months after it launched a state-of-the-art satellite technology it spent years developing.


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