Updated: Mar 13, 2019
A business plan is an essential part of starting a business. According to Tim Berry's guest post on Entrepreneur, the most obvious reason for a business plan is to "establish strategy and allocate resources according to strategic priority." But, there are plenty of other reasons to create a business plan including using it to seek investors and/or back up a loan application.
The Small Business Administration advises new businesses to use a business plan as a "roadmap for how to structure, run, and grow your new business." It should cover the estimated first years of your business and it can be used to think objectively about your business which is helpful to business owners that may have a lot of time, money and emotions invested in their business. In the early years of your business it's very easy to get overwhelmed by the number of directions your business could take and a business plan will help you stay focused and keep your eye on the original goals you set in the beginning.
So, if you've decided that a business plan would be helpful for you to start, fund and grow your business there are lots of resources out there to help you get started.
The Small Business Association offers tips to create both a traditional and a lean startup business plan and walks you through each. They also offer a tool to help build your business plan.
Harvard Business Review (HBR) has some key tips on the right timing to write a business plan but they stress that being flexible is an important component to a business plan. New businesses may have to pivot but it's important to make an objective decision when changing aspects that are core to your business or business plan. Having a business plan will help you evaluate those pivots consciously and objectively.
HBR used a statistical analysis to determine that "the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business."
Often, getting started on a business plan (especially if this is your first) is the hardest part and the trick is to start small. It could be a list of bullet points or a brief outline. You can always go back and fill it in later. Breaking your business plan down into small, manageable steps is key to getting started on a plan to drive your business forward.