Starting an Online Business All-in-One For Dummies®, 3rd Edition

Understanding the Value of a Plan

Starting and managing a business without a business plan is, like it or not, the same as searching for a buried treasure without a map: Although you know that the gold is in the ground somewhere, you're wasting an awful lot of time by randomly digging holes in the hope of eventually hitting the jackpot. Without a plan, the odds of success aren't in your favor.

Why, then, do people resist using this tool? They resist it for two reasons:

• Having a plan involves a great deal of work. Don't despair: You can minimize the amount of work involved, which we get to momentarily.
• They don't understand the importance of having a plan.

To help you overcome your business plan angst, we provide these reasons for having a plan — you can decide whether to take another step without one:

• You can more easily secure money. This goal is probably the most common reason for the creation of a business plan. If you decide to ask strangers to lend you money, whether those strangers are bankers or private investors, they want to see a plan. Lenders have a better chance of protecting (and recouping) their investments when a formal strategy documents your projected income and profits. Even if you're counting on family members for a loan or are using your own funds, having a business plan confirms that you have thought about how to use the money wisely.
• A plan creates a vision that gives you a well-defined goal. Coming up with a great idea and transitioning it into a viable ...