So many small businesses go wrong at the initial stages of planning. The idea that just because your family is providing the money for your start-up enterprise you won’t need to do a plan more than a few notes on the back of an envelope is the basis for much later heartache and failure. The thought and analysis that you have to put into to do even a simple business plan can help you (or your backers) spot the likely problems before you start.
For a start it makes you think about how to explain your business idea to someone who has not lived with it for months and has no clue about how wonderful it might be. Then it makes you break away from this vague feeling that once you have made your product or decided on your service and how you will do it the money will just take care of itself. It doesn’t, believe me. You will have to consider your financial forecast carefully including cash flow- and you are likely to need business advice at this stage. Have you considered all your costs ? What about employment issues and payroll services when you expand.? What about office costs when you outgrow your front room and shipping services when you can’t deliver everything yourself ?
When you are writing your plan it is best to envisage that it is going to be read by critical folks like the banks or funding providers such as investors and people who may want to buy into your business. If the plan is not good enough to convince them, it’s probably not a good enough framework for your start-up business.