There’s a growing sentiment in small businesses that business plans are unnecessary and may actually be a distraction.

I happen to agree.

Well, not totally – it’s when we’re talking about the 30 page business plan that you put together to justify to a bank why you’ve solved every possible problem and they’re taking no risk by loaning you money.

What I find is that these kinds of plans are created once, for that specific purpose, but then never used again.  I’m not even a fan of using other people’s money, but if you have to, go ahead.

But don’t think you’re going to be able to use a 30 page business plan to effectively run your business day to day.

You don’t want to start a new business totally blind, though – you need to be delivering something of value to someone who’s willing to pay you money, right?  So here’s the top things that you want to define ahead of time, even if it’s on the back of an envelope:

  1. Why am I doing this business?  What personal goals is it helping me to achieve?
  2. How will we know if the business is successful in OUR eyes?
  3. Who are our customers?  (I won’t let you get away with “anybody who wants to buy”!)
  4. What is the compelling reason why customers will spend money with us?
  5. What are all the pieces that have to work together to deliver this value?
  6. How much resources (money and otherwise) do we need to get to the point where we’re self-sufficient?

Whenever I talk with someone who claims to have never had a business plan, they at least were able to answer these questions before they ran out of money.  Admittedly, it’s not uncommon for people to just fall in to the answer based on gut feel, expertise, and common sense.  But it’s critical to recognize that it is the answer and to start building on that.  Some people just like looking for answers and exploring, and are never able to stabilize an idea to the point where it starts building critical mass.

What else would you add to the list?  What are the critical questions you have to answer before you know you have a business?

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