You need a business plan if you're running a business. A business plan is like a map and a compass for your success. Without it you will be travelling blind. With a plan you can set objectives, establish priority, and provide basis to measure your success.

The most common time when you will need a business plan will be when you are applying for abusiness loan. Most banks require a business plan and those that don't require it will expect that you have one on hand. There are several critical elements that all banks and investors expect to see.

You need a business plan if you are looking for business investors. The plan won't get you the investment, but not having a plan will mean that you won't get the investment. Investors require a business plan. They invest in the people, the idea, the track records, the market, the technology, and many other factors; but they will look to the business plan to define and explain the business.

You need a business plan to communicate with a management team. The day-to-day business routine is distracting, problems arise, opportunities appear, and commitments should be followed and tracked. How do you know where you are in business without establishing where you started and where you intend to go? How can people commit to a plan they can't see?

Ironically, many of the people who need a business plan don't know they need it. They get trapped by the myths of business planning. They get scared of the overwhelming idea of creating a plan. They don't realize that plans are not just for start-ups, loans, or investment. They don't realize that business plans are easier to develop than most people think. To succeed in business you simply must plan the steps, set the priorities, allocate resources, and manage the cash. Sure, some people say they don't plan, but if they are successful then they are actually always planning in their heads. You can keep that plan in your head if your business is very simple, cash flow is always adequate, and you don't work with other people. If you don't meet that criteria, you simply need to write down your plan.

The number one step to failure or under-performance is to try to run a business without a clear plan to success. Don't try to run without a plan, you are only setting yourself up for failure. Creating a plan is probably much easier than you think and much more valuable than you'll ever realize.

Article written by Terri Sullivan owner of TLS Business Consulting.
http://www.tlsbusinessconsulting.com
Article not to be used without the authors permission