YW Blogcast 27 - Why a business plan?

There’s more than one way to reach the land of financial independence. Investing is a popular method and can work well, especially if you focus on buying rental properties. But others exit school with an entrepreneurial bent, ready to start their own business.

At Young Wealth, we say “Go get ‘em!” Entrepreneurs are the lifeblood of capitalism. But starting a business isn’t something you should do off-the-cuff or on whim. The most creative, high-flying imagineers will do better with a of basic grounding in reality and elbow grease applied to creating a solid business plan.

Why do you need a business plan and what is it for anyway?

In our point of view, a business plan accomplishes three critical tasks.

1.Communication – a well-developed business plan must communicate the potential for success of the idea to people with investment capital, bank loan officers, possible business partners, and prospective employees.

2.Management – consider your business plan to be a roadmap, with every possible contingency planned for. This living document will allow you to track, monitor, and evaluate your progress along the route. Include milestones, even if they have to be adapted along the way.

3.Planning – one of the business plan’s most valuable attributes is in planning. Map out in advance roadblocks and obstacles you foresee arising. Maybe they will come to pass, maybe they won’t. Certainly you can’t predict the future but beginning with a blueprint will put you that much farther along the path to profitable success.

Does a small business need a business plan too? Absolutely! Plan it out. Write it down. Make a million dollars or two.