A Business Plan: Who Needs It?

Let me ask you a question, would you ever consider the construction of a home or any building for that matter, without a detail set of plans to guide you to a successful completion of given project?

The answer of course is absolutely not. Yet many embark upon complicated endeavors in the area of real estate and business ventures without giving a thought to sound planning. The type of planning that requires a well thought out business plan. A plan that asks the pertinent questions that not only acts as a guide for the individual or company launching the endeavor, but also for those who might be called upon to make an investment.

When a reporter for a newspaper begins to write a news story he follows a pattern of “who, what, why, where, how and when.” Applying this same line of questioning to projects in real estate or business can be of great help in evaluating an endeavor. It is a simple formula, but you would be surprised at what can come out of a thoughtful approach of this nature.

The process of asking yourself questions and writing the answers down can bring clarity to any given idea. You can create a simple business plan or you can obtain a computer program that is tutorial in that the program asks the questions and you write the answers. When completed the programs prints out a comprehensive finished product, which can become a working document as time makes its revisions.

A business plan is the only defense against “assumption-it is.” This can be a very costly disease. It usually happens like this. You approach potential investors and make certain assumptions of how a particular venture is going to perform, it is a tedious job to make a comprehensive business plan and do the kind of research required, so you simple make assumptions. Inevitably, you find out, much too late, that one or more of these assumptions are wrong. The results are often devastating, and frequently fatal to the endeavor. What is more, your reputation suffers.

If a project is of a large and complex nature it is often wise to obtain an outside firm to perform the act of doing a comprehensive business plan. This will provide a detailed analysis, time line and financial projections that can make financing much easier and expeditious. A plan of this nature can also examine and discuss the feasibility of the endeavor. A professional business plan of this nature can also be a working document in that it can be in constant revision as you move ahead with your plan and reality begins to manifest.

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