| Some professionals will suggest that you must write a | | | | additional income, but as your business grows you |
| business plan before you ever consider launching a | | | | may start to get the itch to leave your job and work |
| business. Take a few minutes to think about what that | | | | for yourself. This is a scary and important time for a |
| means. Should you construct a 3 to 5 year projected | | | | new small business. Before you leave the security of |
| profit and loss statement before you made your first | | | | your job it would probably be a good idea to have a |
| sale. You may spend a couple days creating your | | | | solid business plan in place. Cash flow projections are |
| pro-forma financials just to find out that you can't even | | | | vital in this situation. You need to know if you have |
| sell a single product, or you may find out that | | | | saved enough money to reach a positive cash flow |
| customers are only willing to purchase your product | | | | situation. The worst thing you could do is quit your job |
| for 30% less than what you first thought. Your profit | | | | too soon, launch your business with 9 months worth of |
| and loss statement was a big waste of time. There | | | | operating funds from your savings, grow for 9 months |
| are similar situations with your marketing plan, your | | | | but still not reach positive cash flow, and then have to |
| operational structure, and even your business model. | | | | close the doors of a successful business potentially |
| So don't waste your time writing a business plan that is | | | | just a couple months before you would reach a |
| obsolete the day after the launch of your business. | | | | sustainable and positive cash flow. |
| Here are the 3 situations when it makes sense to | | | | Hiring Your First Employee - This is another major |
| finally write a business plan. | | | | cash flow related event, but it is more than just an |
| Capital Raising - If you are in the process of raising | | | | extra expense. You should have a business plan |
| capital for your business from angel investors, bankers | | | | well-developed when you hire your first employee so |
| or venture capitalists and you have not written a | | | | that you know where to focus the new employee's |
| business plan yet, now is the time. Even though your | | | | time and so that the employee understands the goals |
| banker may not read your entire business plan, or any | | | | and vision of the business. The type of employee that |
| of it at all for that matter, the business plan is | | | | you want to hire will want to know where the business |
| essentially a tradition of the capital raising process. It | | | | is going, and what he or she can do to help take you |
| shows the bankers or the potential investors that you | | | | there. |
| have considered many of the important pieces of a | | | | There are probably dozens of other situations in which |
| business, and didn't just have another "great idea." | | | | writing a business plan will be valuable to your small |
| Quitting a Full-time Job - Many entrepreneurs will start | | | | business, but these 3 specific situations a sure signs |
| their new business on the side while they still have a | | | | that it is time for you to buckle down and write a |
| full-time job. It may start out as a way to earn | | | | business plan. |