So, you’ve got a great idea for a business, and you’re ready to go. But wait, do you need a business plan? The short answer is: not always. Let’s dive into the nitty-gritty and see when you might need one and when you can keep it simple.
Two Kinds of Business Plans
First things first, there are two types of business plans. The first one is your internal roadmap or your strategic plan, outlining where you’re going and what you’re doing. This plan is all about guiding you and keeping you on course.
The second kind is the external document. This is the one you present to potential investors or banks when you’re looking for funds. This is your pitch, explaining why someone should bet their money on your business.
If you’re starting a business as a side hustle or just testing the waters, don’t worry about creating a formal business plan right away. In the early stages, it’s more important to have a clear set of goals and a game plan to reach them. Your goals and tasks will evolve rapidly as you learn more about your business, your clients, and your audience.
Business Goals vs. Business Plans
One common misconception is that a business plan and business goals are the same. Nope, they’re not. Business goals are what you want to achieve – your destination. Your business plan is the route you’ll take to get there. You definitely need goals, but a full-blown business plan may not be necessary.
Loan Applications and Business Plans
Now, let’s talk about loans. If you’re applying for a loan to boost your business (shoutout to Energize Colorado for supporting small businesses), it’s important to understand what the folks with the money want to see. Different lenders may have different requirements, so do your homework and provide the exact info they need.
Get the Basics Right
If you’re still in the early stages and not sure where to start, here are some actionable tips:
- Define Your Goals: What do you want to achieve with your business? Set clear, measurable goals that guide your efforts.
- Know Your Audience: Understanding your target audience is crucial. Tailor your products or services to meet their needs and preferences.
- Market Research: Keep an eye on your competition and industry trends. This will help you adapt and stay relevant.
- Financial Management: Even without a formal plan, manage your finances diligently. Keep track of income, expenses, and profits.
If you’re still feeling a bit lost, consider attending a workshop or seeking guidance from resources like the Small Business Development Center (SBDC). They can offer valuable insights, connect you with mentors, and help you understand what to think about before diving into your entrepreneurial journey.