The answer to the question, “Do I really need to spend a lot of time creating a business plan?” is, “it depends”.
The purpose of a business plan is to guide you through each stage of starting and managing your business. A business plan can be a roadmap to help you stay on track while building the structure, running, and growing your new business. It is a way to think through key elements of your business.
A business plan can help you get funding or bring on new business partners. Investors want to feel confident they will see a return on their investment or working with you. In other words, is it a smart choice.
There’s no right or wrong way to write a business plan. What’s important is that your plan meets your needs.
Most business plans fall into one of two common categories: traditional or lean startup.
Traditional business plans are more common, use a standard structure, and encourage you to go into detail in each section. They tend to require more work upfront and can be dozens of pages long.
Lean startup business plans are less common but still use a standard structure. They focus on summarizing only the most important points of the key elements of your plan. They can take as little as one hour to make and are typically only one page.
If you are planning on getting a loan of some type, lenders and investors typically request a traditional or comprehensive business plan and needs to contain the following sections.
- Executive Summary
- Company Description
- Market Analysis Organization and Management
- Service or Product Line
- Marketing and Sales
- Funding Request
- Financial Projections
If you want to explain or start your business quickly, if your business is relatively simple, or you envision multiple changes, a lean startup format may work for you. Some components of the lean version follow:
- Key Partnerships
- Key Activities
- Key Resources
- Value Propositions
- Customer Relationships
- Customer Segments
- Cost Structure
- Revenue Streams