Throughout entrepreneurship programs all over the country, would-be entrepreneurs are bombarded with the axiom that for a business to work you need to write a business plan first.  There is very good reason for this but consideration of why this advice is recommended can help an entrepreneur in making a better decision in whether or not the investment of time makes sense.

A business plan is essentially a formal cost-benefit analysis.  The process of writing a business plan forces an entrepreneur to try to look at his or her idea from another person’s point of view. When writing a business plan, an entrepreneur should be thinking about what do investors/stakeholders want to know about my business. This train of thought and process leads to what basically amounts to a value proposition and the how much time, effort, or money is necessary to deliver that value proposition.

A thorough and well put together business plan requires a significant time investment. In the days of brick and mortar businesses, a business plan was a necessity for most entrepreneurs to secure the funding necessary to begin operations. But in today’s web-enabled world, some business ideas take less effort to implement and get to market than the process of writing a business plan. I propose a rule of thumb that if you estimate that a business idea will take less time to get to market than it takes to gather all of the necessary details of your idea and synthesize it into a coherent plan, then do it. Moreover, the process of trying to bring an idea to market and adopting the viewpoint of the customer can prove very beneficial in crafting a more accurate business plan.

Brick and mortar business · Business plan · Entrepreneur · Rule of thumb

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