When it comes to business, you need a plan. Whether you’re looking to grow an existing business, start a new business, or raise investment for an expansion, a business plan is key.

A business plan is the roadmap to your future success. It outlines the financial assumptions behind the project and the key performance metrics to match. It contains your projected profit and loss statements, balance sheet, and cash flow. And, it addresses all the potential operational challenges including labor planning.

Without a business plan, you’ll be unsure of what viability looks like for your enterprise and unsure of how to get there.

But, a business plan doesn’t just appear out of thin air. In order to get the most out of the business planning process, you should ask yourself these 5 questions before you start:

1. Why am I doing this?

Identify the basic reasons behind starting this business or doing this expansion. They could be money, vanity, a social mission, or something else entirely. Understanding your motivations will allow you to establish goals and the direction for the business.

2. Have I done market analysis? Is there any testing I can do?

Make sure there’s a place in the market for your business, an audience for your product, and a path to viability. If you’re unsure about any of those elements, you probably shouldn’t continue with business planning.

3. Who is my support team?

Find trusted advisors and partners with complementary skills and knowledge to help you get the business off the ground.

4. Who am I writing this business plan for?

Are you writing the plan for yourself? A grant? Funders? The audience of the plan will inform the shape and content.

5. How much money do I need to make from this enterprise to survive? And how much would I like to be making in year three and year five?

Don’t forget about your own financial security when creating the business plan. If you want to get paid from this enterprise, build that into the plan!

If you can confidently answer all these questions, you’ll have the foundation in place to create a business plan that works and allows you to make your vision a reality.

Resource

Our Co-CEO Noah Munro recommends reading The New Business Road Test: What Entrepreneurs and Executives Should Do Before Writing a Business Plan to learn more about creating business plans.