Business Plan FAQ

Do I need to create a business plan even if I'm not going to borrow money?

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Questions:

Answer:

Do I need to create a business plan even if I'm not going to borrow money?

Absolutely. A business plan isn't just window dressing to attract potential investors or market your business to potential lenders. A solid business plan should sell you, the potential owner, on the financial viability and soundness of your business idea.

Creating a business plan will force you to think about key issues before you start your business -- such as how you'll raise money and what your projected start-up costs and marketing strategies are -- and will help you figure out if your idea is a winner.

If you write a business plan, complete with a break-even analysis, profit-and-loss forecast, and cash flow projection, you can tinker with your idea and improve it before you start. On the other hand, you may take an honest look at the numbers and find that hoped-for profits are unlikely to materialize. In this case, one of the most important purposes of writing a good business plan is to talk yourself out of starting a bad business.

To learn more about the importance of a business plan, see Why You Need to Write a Business Plan.

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