As markets and customer behaviors are changing all the time, some business owners argue that creating a five-year plan is old fashioned and unnecessary. However, others say that the experience of writing a plan and attempting to make future projections is educational and helpful. A recent study published in the International Small Business Journal found that business owners who spend time planning are more likely to succeed.
Some new business owners view planning as a tedious activity that is required by investors and lending institutions. Rather than looking at a plan as a method for getting funding, a business owner should see the activity of planning as a way to learn and develop their business skills. During the planning process, a business owner may gain valuable insights on business strategy by going over business information and projections.
Creating a business plan should not be a one-time event in which a static document is written. Instead, planning activities can be ongoing, and a business plan can be updated frequently. Researchers have found that business plans that are created by teams of people who pool their knowledge and ideas tend to be more successful than plans that are written by one or two business founders.
A business plan is crucial for an entrepreneur who is establishing a business because the plan will be needed to attract startup funding from potential investors. An entrepreneur who is unfamiliar with the components that make up a good business plan might want to work with an attorney to draft the initial document. An attorney may also be able to advise an entrepreneur about how to comply with business regulations that affect their products and services.